AIM-listed regional property investor Palace Capital has revealed plans to target further growth across Yorkshire by acquiring buildings near city centre train stations.
Chief executive Neil Sinclair told The Yorkshire Post he believed that was where the opportunities lay as commuters ditch their cars for public transport.
The firm owns over £50m worth of property in Yorkshire, more than 30 per cent of its total portfolio, including Broad Street Plaza in Halifax, Hudson House in York and Bank House and Warwick House, both in Leeds.
Mr Sinclair said Yorkshire was an important region for the company, which has made a conscious decision to invest away from the capital.
Sheffield, York and Leeds are a particular focus with their easy access to London and good growth opportunities, he said.
“Three years ago we made our first significant transactions in Yorkshire with two buildings in Leeds – Warwick House and Gelderd Point in Morley, the latter of which we subsequently sold,” he said.
Palace Capital bought Bank House 18 months ago for £10m and has just finished refurbishing the first floor ready to let in the New Year. “It’s two minutes from the station,” said Mr Sinclair. “We think the future is going to be owning properties near railway stations as fewer people use their cars and more people travel by train.”
December is one of the busiest months for Palace Capital as it looks to push through last-minute deals before Christmas.
Palace Capital focuses on regional properties, mainly offices over £10m, that have either never been marketed or for some reason haven’t sold. “Deals fall through for all sorts of reasons and we look for opportunities to buy those properties,” said Mr Sinclair.
He added: “We never worry about the size of a property, it depends on where it is and we look at the potential. Bank House is two minutes from Leeds station so there is always going to be demand. We also look at opportunities where we can improve the building by creating more space and upgrading it.”
The company is submitting plans to knock down and redevelop Hudson House, the office building it bought near York railway station for £3.8m in 2013. It currently has a planning application in place to develop the building, which has already increased in value to £14.9m, into apartments and offices. “But we think we can put a much more efficient building there and we are having positive conversations with the council,” said Mr Sinclair.
He added: “If you want 30,000 sq ft offices in York at the moment you can’t have it. Our approach is, build it and they will come.”
Meanwhile, the firm is also keen to increase footfall at Broad Street Plaza in Halifax, which is home to Vue Cinema. It is almost fully-let apart from one small unit. “It was built in 2012 but we think we can make people more aware of it,” said Mr Sinclair. “The previous owner didn’t do as much marketing as they could have done.”
Mr Sinclair said he is “reasonably optimistic” about the commercial property market. “I’m not concerned about Brexit because we have found that since the vote, we have had more interest in vacant space than before. People are shrugging it off.”
Palace Capital is facing increasing competition from Middle Eastern buyers but Mr Sinclair is confident in his approach. “I have been in this business for a long time. If you keep throwing mud, sometimes things stick,” he said.