Palace Capital said the 139 apartments will be at Hudson House in Toft Green, York, after authorities said the company did not need to apply for permission to convert the space which was previously used for offices into residential properties.
However, the City of York has also informed Palace Capital that the space must be being used for residential purposes by no later than May 30, 2016 - but Palace Capital said it believes this could be extended until February 2019 based on conversations it has had with authorities.
Hudson House is a 103,000 square foot office building built in the 1960s that was originally occupied by Network Rail. It is located very close to York Railway Station and the recently acquired offices of the City of York Council.
Separately, Palace Capital is awaiting a response to a planning application to convert further space at the same property into another 82 apartments and 37,000 square feet of office space, and said Monday that discussions were ongoing.
"When we acquired the property in 2013, we identified Hudson House as a key asset from which we were confident that we could create significant value for our shareholders. I am delighted with the progress that we are making. There remain a number of other exciting opportunities within our property portfolio, where we are adding value through our active approach to asset management," said Chief Executive Neil Sinclair.
Palace Capital shares were untraded morning. They last closed at 332.95 pence.