(Alliance News) - Palace Capital PLC on Monday said it has surrendered its short leasehold interest at Priory House in Birmingham for a nominal sum of GBP25,000, saving GBP170,000 per annum.
In October 2019, the real estate investment company had acquired the leasehold interest of this 63,000 square feet office building as part of the Sequel portfolio. Priory House was let to Forensic Archive Ltd at a rental price of GBP260,000 per annum, which rose to GBP322,000 per annum in December 2016.
In May, Palace Capital had accepted the surrender of the lease held by Forensic for a payment of GBP2.9 million. After deducting seven months of holding costs, Palace Capital said it has effectively disposed of its entire interest for GBP2.8 million, 25% above its GBP2.1 million book value as at May.
"On May 7 a significant sum was received from the tenant but the crucial element was then to dispose of the leasehold interest in this vacant building which was costing the company, on an annualised basis, GBP170,000 largely in empty rates, insurance and security," explained Chief Executive Neil Sinclair.
"Moreover, by removing 63,000 square feet of non-core, vacant office space, our portfolio occupancy has increased from 84% to 86%, with the remainder mostly comprising tactical vacancies as we progress our value enhancing Capex strategy," added Sinclair.
Palace Capital shares were trading 2.8% higher in London on Monday at 298.20 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Palace Capital (PCA)