RNS announcement

24 December 2018

Palace Capital PLC

("Palace Capital" or the "Company")

Palace Capital acquires One Derby Square, Liverpool for £13.975m

Palace Capital (LSE: PCA), the Main Market listed property investment company that has a diversified portfolio of UK regional commercial real estate in carefully selected locations outside of London, has acquired the freehold interest of One Derby Square in Liverpool for £13.975 million, reflecting a 6.75% net initial yield.

This imposing property is situated in the heart of Liverpool and has extensive frontages onto Lord Street and Castle Street, as well as Derby Square. It has a total net floor area of 70,000 sq ft comprising six retail and one leisure unit on the ground floor and 47,500 sq ft of offices across four further floors. It currently produces a net income of circa £1.0 million per annum and is 96% occupied by tenants with excellent covenants, including: Pret a Manger, Tesco, Medicash, Reed Specialist Recruitment and Brook Street (UK).

While most of the property has been recently refurbished, significant opportunities remain for active asset management and the Company will be working to a tailored plan to increase the property's income and capital value in the years ahead.

Neil Sinclair, Chief Executive of Palace Capital, commented: "Having been working hard assessing opportunities over the past year or so and having rejected a number of investment opportunities, which we felt would not deliver value to our shareholders, we believe that this earnings-enhancing acquisition validates our decision to remain patient. 

"Our strategy focuses on city centre locations in thriving university towns and regional cities, particularly where permitted development and a lack of speculative development has reduced the office stock; in Liverpool 1.15 million sq ft of office space has been taken out of the market since 2014.

"One Derby Square is centrally located, close to the Liverpool One development on Paradise Street, in a city which forms part of the Northern Powerhouse and which is going through a very considerable renaissance. We are pleased to make this investment following the recent announcement of the sale of most of the Warren residential portfolio for £18.2 million."

Mason Owen and Hamlins acted for Palace Capital whilst CBRE and Bury & Walkers acted for the vendor.

For further information, contact:

Palace Capital plc

Neil Sinclair, Chief Executive

Stephen Silvester, Finance Director

Tel. 44 (0)20 3301 8331

Arden Partners plc (Lead Broker)

Paul Shackleton / Ciaran Walsh / Alex Penney

Tel. 44 (0)207 614 5900

Allenby Capital Limited (Joint Broker)

Nick Naylor / James Reeve / Asha Chotai

Tel. 44 (0)20 3328 5656

FTI Consulting (Financial PR)

Claire Turvey / Methuselah Tanyanyiwa

palacecapital@fticonsulting.com

Tel. 44 (0)20 7271000

This announcement contains information which, prior to its disclosure, was inside information for the purpose of the Market Abuse Regulation ("MAR").

About Palace Capital plc (www.palacecapitalplc.com):

Palace Capital plc (LSE: PCA) is a Main Market listed property investment company that has a £283.3 million diversified portfolio of UK regional commercial property. The Company maintains a disciplined investment strategy focused on towns and cities outside of London that are characterised by thriving local economies and strengthening fundamentals. Within those locations, the highly experienced management team selects assets that provide opportunity to drive both capital value and long-term rental income through tailored active asset management programmes, ultimately delivering attractive shareholder returns.