Palace Capital has exchanged contracts on the sale of six industrial properties to Clearbell Property Partners IV LLP – a fund managed by Clearbell Capital LLP – for a cash consideration of £34m.
The REIT said the price reflects a NIY of 6.2% and the disposal is 3% ahead of the 31 March 2023 book value of £33m and a discount of 1.7% to the 30 September 2022 book value of £34.6m.
The properties are located at Bone Lane, Newbury; Courtauld House, Coventry; Saxon House, Kettering; Point Four Industrial Estate, Avonmouth; Black Moor Road, Verwood; and Clayton Industrial Estate, Burgess Hill.
The REIT said that when the sale completes it will have disposed of all but one of its industrial assets. It added it intended to use the proceeds from the sale to reduce its debt.
Steven Owen, interim executive chairman of Palace Capital, said: “The disposal of the majority of the company’s industrial portfolio is a significant step forward in reducing its debt and LTV and means we can remain focussed on maximising cash returns to shareholders.
“The company is in a strong financial position and its low leverage provides it with the flexibility and optionality regarding the timing of further disposals and other strategic initiatives. The company has capitalised on the recent stabilisation and, in some cases, the recovery of pricing in the investment property market to sell and market for sale selected properties.
“At an operational level the company has continued to make steady progress with its asset management activities and looks forward to reporting in detail on these in its preliminary results in June.”
