Palace Capital, the regional UK commercial property investment firm, has completed five transactions worth a combined £36.3m over the last six months, funded by a £20m equity raise, increasing its net portfolio value by 36% to £140.4m.
The five transactions were dominated in value by three purchases: the £20.7m Sol Central purchase in Northampton, the £10m Bank House buy in Leeds; and 46-54 High Street in Sutton for £3.9m. The two sales were Unit 1, Clayton Manor in Burgess Hill for £1.25m and 54 Albert Road North in Reigate for £0.45m.
Palace Capital financed the purchase of Sol Central with a £20m equity raising in August. The equity raising diluted the firm’s EPRA NAV by 10p per share, still ending the six month period to 30 September at 404p, up 371p for the same period last year.
EPRA earnings almost trebled at £5.1m, compared to £1.8m over the same period last year. Palace has set an interim dividend of 7p which will be paid on 30 December 2015 to shareholders.
Earlier this month, Palace Capital refinanced a £20m Nationwide senior loan secured against the 24-strong Sequel portfolio acquired from Quintain Estates & Development for £39.25m.
The new five-year facility replaces an equal sized loan from the same lender, reducing the margin by 130 basis points to 245 bps.
Palace has five bilateral loans – also from RBS, Santander, Lloyds Bank and Close Brothers – together for a total of £51.1m, reflecting of group-wide LTV of just 24% net of £18.7m cash held.
Chairman Stanley Davis wrote in today’s half yearly results: “Palace has grown from £100,000 to c.£100m market value in the last five years, and we intend to continue our policy of looking for portfolios especially where these have not been exposed to public marketing.
“In due course it would be Palace’s intention to join the Official List of the London Stock Exchange at such time as would lead to our inclusion in the All Share Index. To this end we have strengthened our Board with the appointment of a Finance Director and selective further recruitment will be made to establish a platform to support future growth.
Stephen Silvester has been appointed to the Board as finance director.
Davis said of the appointment: “I am delighted that Stephen Silvester joined the board as Finance Director during the period. He has already made a significant contribution to the management of the Company. Part of his role is to assess the options available to the Company to create the right financing platform going forwards.”
Davis added that the firm’s ambition in the near term is to build critical mass and continue to grow its portfolio of commercial properties located outside London.