Strong demand for homes and office space at mixed use development

Property investment business Palace Capital has published a new update on Hudson Quarter, its mixed use development in York which is due to be completed in March next year.

The listed company says that while lockdown and materials supply problems did affect construction, activity did not cease and the project remains on budget.

Hudson Quarter features four apartment properties set around a landscaped courtyard – three residential buildings and a 35,000 sq ft office building.

Palace Capital’s update adds: “Momentum on apartment marketing and sales has gathered pace in recent weeks and contracts have now been exchanged on 36 units at an aggregate value of £9.6m.

“The next phase of apartments at the Victoria block has been launched and there is continuing strong interest in the high quality development, which is one minute’s walk from York railway station.

Having pre-let 4,500 sq ft of offices to Knights, the listed legal and professional services business, at a record rent for York of £25 per sq ft, we have continuing interest in HQ, our 35,000 sq ft office building, for both the entire space and individual floors, notwithstanding the current restrictions.”

Commenting on some of its recent disposals outside York, Palace Capital notes that Meadowcourt, Sheffield, sold in July for £1.25m, 30% above book value.

The business says 94% and 90% of its rents were collected for the March and June quarters, respectively.

Its cash reserves as at 30 September 2020 were £14.3m, with a further £5m available from its revolving credit facility.

Neil Sinclair, chief executive of Palace Capital, said: “Our financial year commenced only one week after the UK went into a national lockdown.

“From that point we have been actively engaging in meaningful dialogues with all of our tenants and the success of this strategy, together with the quality of our occupier base, is reflected in our rental collection levels.

“Our team is composed of experts in active asset management and they have excelled over the last few months in very difficult circumstances.”