Proactive Investors - Palace Capital PLC (LON:PCA), the real estate investment trust (REIT), jumped 5% in trading after it announced a series of disposals, which have been used to reduce its debt pile.
Three properties were sold for £15.2 million, which after accounting for rent incentives, represented a 2.3% discount to March 2023 valuations.
Further sales processes are underway and management indicated that if they’re completed in the coming months it could result in shareholder returns including a tender offer.
Proceeds have been used to pay off its £5.6 million loan with Barclays (LON:BARC), which had a floating interest rate of 7.1% attached to it.
It leaves Palace Capital with only its Scottish Widows debt facility of £8.3 million, which has a fixed interest rate of 2.9% attached until July 2026.
The group’s disposals included the sale of its retail warehouse site Bridge Park in East Grinstead for £7.2 million, Sutton’s High Street for £3.6 million and Lendal & Museum Street in York for £4.4 million.
Following the sales, the group’s gross debt sits at £8.3 million, while cash reserves are around £5.6 million.
Steven Owen, executive chairman said: "Against the backdrop of challenging property and financial markets, we have continued to progress our disposal and debt reduction strategy with the result that the Company is in a strong financial position with the entire portfolio virtually unencumbered.”