16 June 2014
PALACE CAPITAL PLC
("Palace Capital" or the "Company")
PALACE CAPITAL SIGNS SIGNIFICANT LEASE RENEWALS WITH ROCKWELL AUTOMATION LTD
Palace Capital plc ("Palace Capital" or the "Company"), the AIM quoted property investment company focussed on investing in the UK secondary commercial property market outside London, today announces a significant renewal of two office leases with Rockwell Automation Ltd ("Rockwell").
The two office buildings (which total 38,335 sq ft.) are known as Buildings 3 & 4, Kiln Farm, Pitfield in Milton Keynes and were let to Rockwell until December 2014 at a combined rental of £398,916 per annum. These leases have now been surrendered.
Palace Capital has undertaken to refurbish both office buildings to a specification agreed with Rockwell. This will require an investment of circa £2.5m by the Company. Terms have been agreed with a contractor and works are expected to start imminently and due to be completed by the end of the year. Palace Capital will fund this investment through its own resources.
Whilst the refurbishment is being undertaken Rockwell will continue to use part of the offices under "agreements to lease" and when the refurbishment is completed they will take new full repairing and insuring leases on both office buildings. These leases will be for a term of 12 years without a break with provision for upward only rent reviews at the end of the 4th and 8th years. The rent will be £248,283 per annum and £150,633 per annum respectively, making an aggregate rental of £398,916 per annum (which equates to the combined rental previously paid by Rockwell). Following this investment the Company will have two refurbished office buildings which will be let for 12 years with frequent upward rent reviews and a first-rate covenant and the longer term value of these office buildings will have been enhanced.
Palace continues to own Building 2 comprising 14,500 sq ft of offices which is let to Northgate Information Solutions UK until March 2021 with a rent review and a tenant's option to break in March 2016 at a current rent payable of £167,500 per annum exclusive.
Rockwell is a global provider of industrial automation, power control, and information solutions. They are headquartered in Milwaukee, Wisconsin employing about 21,000 people in more than 80 countries. Rockwell is currently capitalised at over $17bn.
Neil Sinclair, Managing Director of Palace Capital said:
"We are delighted to have to have concluded this transaction with a major international company. This transaction which is the second to be announced within a week demonstrates the continuing active management of the Company's portfolio which we are undertaking."
-ends-
For further information contact:
Palace Capital Plc |
Tel. +44 (0)20 7722 7603 |
Stanley Davis, Non-executive Chairman |
|
Neil Sinclair, Managing Director |
|
|
|
Allenby Capital Limited |
Tel. +44 (0) 20 3328 5656 |
Nick Naylor, Corporate Finance |
|
James Reeve, Corporate Finance |
|
Arden Partners plc |
Tel: +44 (0) 20 7614 5917 |
Christopher Hardie, Corporate Finance |
|
|
|
Broker Profile (Financial PR) |
Tel. +44(0) 20 7448 3244 |
Simon Courtenay Tamsin Shephard |
|
