Palace Capital Regulatory News (PCA)

19 July 2022

Palace Capital plc

("Palace Capital" or the "Company")

Further Update on Strategy and Changes to the Board

Palace Capital (LSE:PCA), the Main Market property investment company that owns a diversified portfolio of UK commercial real estate in carefully selected locations outside of London, today provides an update on the Company's strategy following the announcement on 4 July 2022.

In its strategy update of 4 July 2022, the Board undertook to reposition the Company as an ESG driven regional office market specialist, reinvesting proceeds from the sale of the industrial portfolio into improving the existing regional office portfolio and also into new opportunities in the regional office market. In light of shareholder feedback following that update, it has been decided by the Board that such a strategy needs amending. The Board will therefore now focus on maximising cash returns to shareholders, whilst continuing to remain mindful of consolidation in the Real Estate sector as part of its considerations.

The Board will continue to pursue a sale of the Company's industrial portfolio of eight assets, which were independently valued as at 31 March 2022 at £46.5 million. Should a sale of the industrial portfolio be successful it is intended that the net proceeds of the sale, after repayment of debt relating to the industrial portfolio, will be distributed to shareholders by either a special dividend or buyback via a tender offer.

The Board will also continue its strategy of disposing of other non-core investments and seek to complete the remaining sales of the residential apartments at York. Funds from these disposals will be aggregated with those from the sale of the industrial portfolio and distributed to shareholders.

The share buyback programme to repurchase up to 2.3m ordinary shares, representing approximately 5% of the Company's ordinary shares, announced on 4 July 2022 was completed on 11 July 2022 at an average price of 260 pence which represents a 33% discount to the last reported EPRA NTA per share.

In light of the amended strategy, Mickola Wilson (Senior Independent Director), Kim Taylor-Smith (Non-Executive Director), and Paula Dillon (Non-Executive Director) consider that now is the right time to step down from the Board with immediate effect, and therefore will not be offering themselves for re-election at the Annual General Meeting on 29 July 2022. The Company will look to appoint a new Non-Executive Director in due course.

Commenting on today's announcement, Steven Owen, Interim Executive Chairman said: "I would like to thank Mickola, Kim and Paula for their dedication and commitment to Palace Capital, and we wish them all the best for the future."

Palace Capital plc Steven Owen, Interim Executive Chairman / Matthew Simpson, Chief Financial OfficerTel. +44 (0)20 3301 8330

Broker NumisHeraclis Economides / Oliver HardyTel: +44 (0)20 7260 1000

Broker Arden Partners plcCorporate Finance: John Llewellyn-Lloyd / Elliot MustoeCorporate Broking: James Reed-DaunterTel: +44 (0)207 614 5900

Financial PR FTI ConsultingDido Laurimore / Giles BarrieTel: +44 (0)20 3727 1000palacecapital@fticonsulting.com