Palace Capital Regulatory News (PCA)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

Palace Capital PLC

("Palace Capital" or the "Company")

PALACE CAPITAL SIGNS £40M FACILITY WITH BARCLAYS

Palace Capital, the property investment company that focuses on commercial property outside London, is pleased to announce that it has entered into a new 5-year £40 million bank facility with Barclays Bank.

At the time of the acquisition of RT Warren (Investments) Limited ("RT Warren"), the Company stated that it had assumed an existing loan from Barclays Bank of £14.5 million. This bank facility was due to expire on 31 January 2018.

In discussions with Barclays Bank, the Company has taken the opportunity of not only agreeing a new, increased 5-year facility secured on the RT Warren commercial properties, but also to repay the Company's £12.7 million facility with Nationwide, which was due to expire in November 2020.

The new facility with Barclays Bank carries a margin of 1.95% over LIBOR, which further reduces the Company's average cost of debt to below 3% and extends the average debt maturity to 4.7 years.

As at 24 January 2018, the company has net debt of £84.2 million, representing a loan to value (LTV) net of cash of 31%. The Company now has combined facilities of £115.4 million, providing greater firepower for further acquisitions.

Neil Sinclair, Chief Executive of Palace Capital, commented: "We are delighted to have entered into this new facility on very competitive terms as we continue to demonstrate one of the lowest overall costs of debt in our sector. We are strong advocates of relationship banking and have been well supported by our key lenders through this latest growth phase. The new facility will enable us to pursue more opportunities to grow both income and capital value, underpinning our commitment to enhance cash returns to our shareholders."

Date: 26 January 2018

For further information, contact:

Palace Capital plc

Neil Sinclair, Chief Executive

Stephen Silvester, Finance Director

Tel. +44 (0)20 3301 8331

Allenby Capital Limited (Nominated Adviser and Joint Broker)

Nick Naylor / James Reeve / Asha Chotai

Tel. +44 (0)20 3328 5656

Arden Partners plc (Joint Broker)

Chris Hardie / Ciaran Walsh

Tel. +44 (0)207 614 5917

Capital Access Group (Financial PR)

Scott Fulton

Tel. +44 (0)20 3763 3400

About Palace Capital plc (www.palacecapitalplc.com):

Palace Capital is a UK property investment company admitted to trading on the AIM Market of the London Stock Exchange (LSE: PCA). The Company has a diversified portfolio and looks for opportunities where it can enhance the long-term income and capital value through asset management and strategic capital development in locations outside London. In its last reported financial year, Palace Capital produced a 20.0% increase in adjusted profit before tax, a 7.0% uplift in EPRA NAV per share and a 16.0% increase in dividends.