Palace Capital will focus on refurbishing regional brown offices as it unveils its new strategy to investors.
The main-market listed REIT plans to sell off its industrial and retail warehouse properties, valued at £46.5m, as a single portfolio, “in order to execute and finance this strategy”.
Steven Owen, interim executive chair, said: “This is a transformational strategy that builds on the strong platform we already have in place but will provide us with a clear focus and distinct differentiation. The board believes this change in our strategy considerably enhances the investment case for the group and is a key step in the board’s commitment to maximising value for shareholders and closing the current share price discount to NAV.”
In a market update this morning, Palace said it “intends to have a pure focus as an ESG-driven, regional office market specialist where our expertise can be used to create value from offices with relatively low EPC ratings, such as D (brown offices) through refurbishment and other asset management initiatives, to deliver high EPC ratings such as B (green offices) while improving the carbon footprint of such buildings”.
Palace has recently been the subject of action by activist investors, despite fairly strong performance. Founder Neil Sinclair stepped down as chief executive last month shortly after pushing back against shareholder criticism.
Sinclair had been fighting off criticism from investors, who said “something needs to change” at Palace to avoid “a very average performance”.
Sinclair told EG last month: “It’s a bit rich to come on now and moan about margins… Either they have a short memory or conveniently lost it.”
Palace has also started to buy back 2.3m shares at 10p each.
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