Palace Capital’s portfolio value has fallen 16% on a like-for-like basis in the six months to the end of March, driven by weaker office and leisure valuations.
The company, which is executing a wind-down strategy, said its portfolio of four investment properties in Newcastle, Exeter, Leamington Spa and Northampton, plus a York residential property with a ground rent freehold interest, had been independently valued at £31.3m by CBRE at the end of March.
The value of Palace Capital’s three offices fell 11%, with St James Gate in Newcastle accounting for the biggest office valuation deficit. The firm said its Forum office asset in Exeter is under offer.
Its leisure asset, Sol in Northampton, fell in value by 25%, from £12.8m at the end of September to £9.6m, while its eight apartments at Hudson Quarter in York, three of which are under offer, were valued at £2.95m.
In February, as part of its wind-down announced in July 2022, Palace Capital sold Broad Street Plaza in Halifax for £9.9m, reflecting a net initial yield of 14.9.%, and unit 3A St James’ Gate in Newcastle for £0.59m.
Since starting the wind-down, the company has sold more than £160m of assets, repaid all bank debt and returned more than £64m in cash to shareholders.
In January, its directors Steven Owen and Mark Davies resigned from the board following demands from activist investor Lakestreet Capital Partners. Lakestreet co-founders Christian Kappelhoff-Wulff and Valentin Pierburg took their place on the board.
The reshuffle came after Lakestreet requisitioned a general meeting to replace Palace Capital’s chairman Owen with its own founders.
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