Palace Capital Share Discussion Threads

[nickrl] 04/7/2022 12:55

Specto agree RGL properties predominantly business pk style located although they have some big city centre offices as well. There buildings are reasonably modern and appealing but still needs tenants of course.

We seem to be in a paradox here with office occupancy still significantly depressed (i know it depends on day of week) vs what had been a relatively healthy market for properties by investors which has pushed yields down. I'm not sure anyone really knows what the outcome is going to be over offices but its pretty evident that hybrid working is here to stay so along with a looming recession compounding by costs to run lower EPC buildings its not surprising negativity is infecting investor mindset.

Maybe PCA will get out of industrials at the top of that mkt but to then plough it all back into upgrading their office portfolio is a bit risky imv especially as costs in construction are increasing rapidly. I suspect an increased share buyback with Sinclair at the front of the queue.

[penelopeabbot] 04/7/2022 11:08

Am so pleased to see result with Vertex Global Trades (VGT) in comparison to the experiences one read or hear about in the media.

[spectoacc] 04/7/2022 11:01

@riverman77 - my fear with RGL is that it's a bit "secondary", but an ability to drive to work is a plus. City centres getting steadily worse for parking, access (road closures, emissions schemes) and.. shops.

Ultimately, like Retail (eg Oxford St), only the best offices will do well in a declining market.

[riverman77] 04/7/2022 10:49

RGL and PCA seem to have different strategies - PCA very much focused on city centre offices, while RGL is out of town business parks. I'm with PCA on this one - who on earth would want to work in a business park? In the post Covid world, companies really need to entice workers to come in - a nice centrally located office is a must.

[spectoacc] 04/7/2022 10:25

Lol @nickrl - 2010..

Re merger - which of RGL & PCA's Board & managers would give up their jobs. My guess is - neither.

[nickrl] 04/7/2022 10:05

Well at least the title of this thread finally came to fruition!!

Anyhow pure regional office play maybe ripe for a merger with RGL?

[spectoacc] 04/7/2022 08:29

Yes notable that costs are the last thing they're going to address.

I also wonder what they'll get for the Industrial - it's still a strong market, but what are the assets like?

There's a buyback in there too, to placate shareholders a little, but I certainly wouldn't be upping gearing at this point in the cycle, when about to embark on an uncertain new strategy. ESG offices will fare much better than offices in general, but buying tired ones to bring them up to spec - not sure. If the market gets really hammered (WFH & recession), newbuild will always trump putting cladding on a 60's block.

[baner] 04/7/2022 08:26

This will certainly not bridge the gap between the NAV and the market price of the shares. This BOD is hopeless and could not care less re shareholders - their main focus seems to be to feed the incompetent management with excessive remuneration packages.

[jbarcroftr] 04/7/2022 07:53

One way or another I think this will work out alright.

[hybrasil] 04/7/2022 07:35

Trying to answer nearly everything that has been said on this thread!

[spectoacc] 04/7/2022 07:26

An acknowledgement of excessive costs, a theoretical reduction in gearing (actually going up), a maintained divi (unless income doesn't cover it, in which case reset to the PID level), and selling off their industrial to become a co that buys/refurbishes offices.

Not saying it won't work, and a lot more focussed than what they've previously done, but is a big bet on the offices sector.

[pdosullivan] 26/6/2022 11:29

Interesting piece in FT Money this weekend. According to data compiled by Mazars, 81 property companies fell into insolvency in the first quarter of the year. This is the highest quarterly figure in more than a decade. Perhaps PCA might be able to pick up a couple of bargains.

[solarno lopez] 15/6/2022 09:17

Nice start to the day

[hugepants] 14/6/2022 22:33

A high-yielding regional commercial property Reit with a bias towards regional offices, industrial and retail warehouses has delivered bumper valuation uplifts and hiked the dividend, too
June 14, 2022
By Simon Thompson

"I expect the relative and absolute outperformance to continue and reiterate my 350p fair value target price. Buy."

[hugepants] 14/6/2022 22:30

Positive results and an unexpectedly high increase in NAV. The NAV of 390p is 20p higher than the Edison estimate announced on 8th April this. In fact 390p was Edison's NAV estimate for y/e 2023.

[konradpuss] 14/6/2022 22:03

Well a very sad day.

I have put on a black arm band.

I will be in mourning for the next month.

What a disaster for the shareholders of Palace Capital for their 'leading light' to be departing.

I wonder if he is taking up a role as a Government advisor or perhaps taking up charity work?

[solarno lopez] 14/6/2022 10:41

IS a more experienced analyst would suggested that Sinclair will not be selling stock firstly because he is an insider and secondly being on the inside he knows the potential for a substantial uplift to the value of his holding

If he does sell then we are all doomed !!

[igbertsponk] 14/6/2022 10:18

Would be daft to buy now as I suspect Sinclair will be offloading shares as soon as the ink is dry on his leaving settlement.

[nickrl] 14/6/2022 10:05

Nice to see the NEDs heeding the advice of ADVFN posters!

Still 47 apts to go at Hudson Qtr perhaps Sinclair might buy one with his payoff! Anyhow its largely free cash from now as development loan is paid off. This come through as an additional 3.8m nett income but will be used to offset the RCF. (another 1.7m from post year end sales so only 43 left to go which should realise 10-15m but don't have the detail of whats left so just an assumption of avg seling price)

NRI is down slightly over FY21 due to disposals and voids but going forward they say its up by nett 1.9m. With most of Hudson Qtr offices now let the void costs on this property will drop off and they will have a lower interest bill.

Got to applaud them for getting one of the big loans due up this year refinanced for 5 years and with IR down from 2.5 to 2.2% (actually if its on same arrangement as previous Santander loan looks like its 2.2% plus SONIA unless they've entered into a swap but didn't say as it was post year end).

All in all the divi is well covered at the cash level and ought to have scope for a bit more at the NAV update. Will have the cash from Hudson Qtr which maybe a share buyback? Or with Sinclair out the way is this now ripe for a merger or a buyout from peter gyllenhammar. Mr Market seems uninterested only a handful of trades.

[solarno lopez] 14/6/2022 09:57

of interest

[cwa1] 14/6/2022 07:29

Results out:-



Steven Owen, Interim Executive Chairman, commented:

"The Group has delivered a robust set of results driven by a combination of active operational and financial activity, property revaluation gains and profits arising from the disposal strategy resulting in a total accounting return of 14.8%.

"The Board announced in the Trading Update on 6 April 2022 that, in consultation with shareholders, it was considering a range of strategic options, including a return of capital, to unlock further value in the business. We expect to update the market on the strategic options that we will pursue before the Annual General Meeting in July 2022. The Board remains committed to maximising value for shareholders and closing the current share price discount to NAV."

[cwa1] 14/6/2022 07:27

Ding dong, the wicked witch(for some) has gone:-

Board change

Palace Capital (LSE: PCA), the Main Market property investment company that has a diversified portfolio of UK commercial real estate in carefully selected locations outside of London with a focus on the office and industrial sectors, announces that after 12 years of service, Neil Sinclair, CEO and co-founder, will be stepping down from the Board with immediate effect. He considers this the right time, following the strong Trading Update announced on 6 April 2022 and the material increase in NAV and dividend announced today.

[baner] 07/6/2022 15:12

redwing

the only thing you need to look at is the development of the NAV............and it is terrible. PC claim they have an opportunistic investment strategy - i.e they should go for cheap properties that have growth potential - so why are there hardly any industrial/warehouse properties in the PC portfolio - but "leisure temples" in Northampton and some other place?.........Sinclair is commercially and financially incompetent and the company is carrying enormous central costs to "look after" what he has picked up in the market.......the only clever thing you can say about him is that he has avoided putting his own money into the company when they have raised substantial funds at prices way, way above the current market price. smart move, Neil!