Palace Capital has sold six industrial properties in the UK to Clearbell Property Partners IV, a fund managed by Clearbell Capital, for £34 mln (€39 mln).
The selling price reflects a net initial yield of 6.2% and is 3% above the 31 March 2023 book value of £33 mln (€38 mln) but 1.7% less than the 30 September 2022 book value of £34.6 mln (€40 mln).
Five of the properties will be completed later this month, while the sixth should be finished in early July.
The six properties, which generate annual rental income of £2.2 mln (€2.5 mln), are Bone Lane, Newbury; Courtauld House, Coventry; Saxon House, Kettering; Point Four Industrial Estate, Avonmouth; Black Moor Road, Verwood; and Clayton Industrial Estate, Burgess Hill.
Steven Owen, interim executive chairman of Palace Capital, said: ‘The disposal of the majority of the Company’s industrial portfolio is a significant step forward in reducing its debt and LTV and means we can remain focused on maximising cash returns to shareholders. The company is in a strong financial position and its low leverage provides it with the flexibility and optionality regarding the timing of further disposals and other strategic initiatives. The company has capitalised on the recent stabilisation and, in some cases, the recovery of pricing in the investment property market to sell and market for sale selected properties. At an operational level the company has continued to make steady progress with its asset management activities and looks forward to reporting in detail on these in its preliminary results in June.’
Palace Capital plans to use the proceeds from the sale to reduce debt, which will amount to £25 mln (€29 mln) on completion of the disposal.
As part of its strategy of maximizing cash returns to shareholders, Place Capital is marketing or preparing certain properties for sale, while others are undergoing asset management to prepare a future sale.
During Q1 2023, the company disposed of eight properties for £15.6 mln (€17.9 mln) 8% above the 31 March 2022 book value, while the total portfolio was worth £192.4 mln (€220.3 mln) on 31 March 2023.
