York City Council has approved Palace Capital’s (LON:PCA) planning application to demolish Hudson House and replace the existing office building with a mixed-use development comprising residential, office and commercial areas. While we have not changed our estimates, pending further information on the costs and timings of the project, the approval removes one risk associated with the asset and may have a positive effect on its next valuation.
Hudson House is a 1960s office block built on former Network Rail land inside and adjacent to York’s Roman city walls, and accessible through an arch from the railway station. Palace acquired the asset as part of the Signal Portfolio from Quintain in 2013 for £3.8m and had previously secured permission for change of use. At 31 March 2017 it was valued at £14.9m. Today’s approval will allow Palace to replace the current 103,000 sq ft office building with a modern property with a similar footprint comprising 127 flats, 34,000 sq ft of offices, 5,000 sq ft of commercial space and parking.
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