Palace sells Leeds office block for £2m

Property investment company Palace Capital has sold a Leeds office building for £2.15m.

Warwick House on Wade Lane has been sold to a private investment group for £750,000 above book value.

The 14,800 sq ft site is held on a 125-year lease from Leeds City Council, which started in 1980.

It agreed to pay a minimum ground rent of £8,000 per annum or 12.12% of rents received, whichever is the greater.

Warwick was part of a portfolio acquired from Quintain in October 2013.

The building is currently let to Interserve Working Futures Limited for a term expiring on 30 August 2019 at a current rental income of £196,250 per annum with tenant’s options to break on 31 August 2017 and 31 August 2018.

The current ground rent payable to Leeds City Council is £23,786 per annum so the net income received is £172,464 per annum.

Neil Sinclair, the chief executive of Palace Capital commented: “This continues our policy of recycling our capital from properties where we believe there is little or no opportunity for growth.

“Warwick House is not only in a secondary office location but the tenant has a break option in August 2017 which, if exercised, would leave us with an empty property within 7 months. Effecting a sale of our long leasehold interest at 54% above book value is a great result as we continue to generate value for shareholders.”