Competition for regional commercial assets with local authorities and private equity investors meant Palace Capital (PCA) made just one acquisition during FY2019, purchasing a retail and office property in Liverpool for £14m. That was funded with the cash proceeds from the sale of most of its remaining residential assets for £18.2m.
However, 37 new leases were agreed at an average 14 per cent premium over estimated rental values at March 2018, which pushed net rental income up 10 per cent. That is despite the portfolio retaining a 10 per cent exposure to the troubled retail sector, where the commercial landlord completed six new lettings.
Occupancy rates declined to 87 per cent, from 90 per cent, although chief executive Neil Sinclair said vacancies were intended to allow refurbishment work in the hope of future rental uplifts. Management continued to work towards gaining planning consent for its Hudson Quarter in York, which will comprise 35,000 square feet (sq ft) in office space, 127 apartments and 5,000 of extra commercial space and car parking. However, consent was granted for the development of 4,000 sq ft and 28 apartments in Weybridge.
| PALACE CAPITAL (PCA) | ||||
| ORD PRICE: | 270p | MARKET VALUE: | £124m | |
| TOUCH: | 269-279p | 12-MONTH HIGH: | 366p | LOW: 270p |
| DIVIDEND YIELD: | 7.0% | TRADING PROPERTIES: | £26m | |
| DISCOUNT TO NAV: | 31% | NET DEBT: | 54% | |
| INVESTMENT PROPERTIES: | £258m | |||
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 396 | 13.9 | 82.4 | 13 |
| 2016 | 414 | 11.8 | 43.9 | 16 |
| 2017 | 436 | 12.6 | 36.6 | 18.5 |
| 2018 | 400 | 13.3 | 35.9 | 19 |
| 2019 | 393 | 6.4 | 11.3 | 19 |
| % change | -2 | -52 | -69 | |
| Ex-div: | 13 Jun | |||
| Payment: | 13 Jul | |||
| *Dividends paid quarterly. XD and Payment dates refer to fourth-quarter dividend of 4.75p | ||||
