Palace Capital secures £4.5m loan on Bank House
A £4.5m loan facility has been secured against Leeds’ Bank House by Palace Capital, which bought the property for £10m last month.
The four-year agreement with Lloyds Bank will generate interest at a rate of 2.1% over Libor per annum., which will be used to fund working capital as well as support further acquisition opportunities.
Palace Capital, which specialises in property investments outside London, bought Bank House, on King Street, from a major pension fund for £10m cash.
The 90,000 sq ft property, built in 1968 for the Bank of England, still houses its original occupiers on the bottom two floors, with law firm Walker Morris and Axa Insurance also current tenants. There is currently 8,800 sq ft of vacant space, which represents about 10% of the total space available.
Bank House produces a net income of £864,000 a year, representing a net yield of 8.1% after transaction costs which Palace Capital believes can increase to “around 10%” through active management.
Last August Palace Capital raised £20m with investors which enabled it to acquire Property Investment Holdings (PIH) and be ready to make acquisitions of suitable properties as the opportunites arose.
