Palace Capital has said it expects its annual profits to be ahead of market expectations.
The investor, which focuses mainly on commercial property outside London, said in a trading update it now has a contracted rental income of £18.1m pa and an effective net rental income of £16.9m pa after deduction of £1.2m pa from empty rates, service charge shortfalls and head rents.
The announcement comes after the company moved up to the main market of the London Stock Exchange, from AIM, on 28 March.
Palace Capital acquired RT Warren in October 2017, with its portfolio of 21 commercial buildings and 65 residential units. Palace said it was in discussions to sell 60 of the residential units, with three already sold at 14% above book value.
Demolition has started at its two-acre site at Hudson House near York railway station, where Palace has planning consent for 127 flats, 35,000 sq ft of offices, 5,000 sq ft of commercial and car parking. The company had previously indicated that it was in discussions with a joint venture partner to deliver the scheme, but has since decided to complete the development alone.
The company has sold three properties in Exeter, Coventry and West Molesey for a total of £4.7m which it said was above book value and continues the company’s policy of actively recycling its capital. Acquisitions have included Solaris House, Milton Keynes, let to Monier Redland for 10 years at a headline rent of £240,000 pa exclusive (£16.55 per sq ft), indicating potential for a rental increase at the forthcoming reviews, due in December, on the company’s adjoining office buildings which currently achieves £10.55 per sq ft.
Palace Capital chief executive Neil Sinclair said: “I am delighted with our progress since December of last year. I continue to be positive not only about securing the right opportunities outside London but also our prospects for the existing portfolio.”
• To send feedback, e-mail Louisa.Clarence-Smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette
