Palace Capital surpasses targets on strategic disposal

Palace Capital were able to exceed the goals set on strategic disposal with the sale of Pelhan House in Brighton.

Palace Capital is property investment firm. The group’s portfolio is filled with handpicked commercial real estate in the UK. The location of the real estate units are mainly outside of London, with a concentration in the office and industrial sector.

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On Thursday, Palace Capital declared the completion of the disposal of their asset, Pelham House. Pelham House is in Pelham Square located within Brighton. The sale generated £1.6m.

A strategic disposal plan was established by the property investment firm in April of 2021. Fifteen non-essential properties were established for disposal, which would yield an income of £30m minimum. With the sale of Pelham House, which is the 14th of the 15 properties to be sold off, the group has enjoyed £31.5m in total consideration from the sales programme.

The current income collected from the sale of the 14 assets is exceeding the aggregate book value by 20% and the previous procurement rate inclusive of capital expenditure by 12%.

From the proceeds, £15.7m have been utilised in paying off debt. The remainder of £15.8m will be used in reinvestments of assets which are in line with the firms needs.

“These sales at 20% above book value have generated an ungeared 11% aggregated IRR for shareholders which with our continuing Hudson Quarter apartment sales, have further strengthened our balance sheet,” said Neil Sinclair, Chief Executive, Palace Capital.

“Following the recent acquisition and letting activity, new income exceeds the rent lost through disposals, resulting in fewer but better quality properties. With a pipeline of potential opportunities, we look forward to updating the market on further acquisitions in due course as we continue to recycle capital.”

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