Palace would not identify the location of the asset, but confirmed that it was in the final stages of negotiations to complete the deal.
Following its annual results this week, the group also said it was selling more than £4m of assets, including a warehouse and office development in Bristol and another office building in Coventry.
In its annual results published earlier this week, Palace stated that net asset value (NAV) per share had risen by 7% to 443p in the year ending 31 March, while pre-tax profit had risen 7% to £12.6m from £11.8m, thanks to a combination of trading profit, revaluation gains and profit on disposals. However, the rent roll fell to £12.7m from £13.5m last year as a result of asset disposals.
The company added that it would pay a dividend of 9.5p, increasing the total for the year by 16% to 18.5p.
“Our quality portfolio and strategy of active management have enabled Palace Capital to outperform the sector in terms of NAV growth,” said Palace Capital chief executive Neil Sinclair.
“We continue to source off-market opportunities to recycle capital from sales that I believe will boost income and allow us to maintain our progressive dividend policy for the benefit of our shareholders.”