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the same shareholding in all of them and so there’s no financial complex of how we are involved with one in comparison with another”.
Of course, if you’re in the business of backing propcos and delivering investment management performance, the underlying state of the market is of central importance. Palmer is positive about certain sectors but concerned about the macro-economic outlook.
“There is no real oversupply of offices or industrial throughout the regions which is good because I think in the next few years we are in for a very rocky ride in both the economy and the property marketplace. The political and the economic threats are greater at this moment than I can previously recall in my career.”
He voted ‘remain’ in the EU Referendum but does not believe that the country should backtrack on that decision: “I respect democracy and I think we have to stick with the vote result. The UK is actually really quite good at making the best of its situation”.
The companies that Palmer has backed have always represented a blend of commercial and residential development and it is an approach which has gained increasing acceptance as the traditional lines between sectors have become more blurred.
“Our particular focus is twofold. One is residential land for house builders. We buy a lot of land without planning consent, spend money to obtain the necessary consent and then sell it onto the house building community.
“The second focus is on retail and the need for last mile logistics for the likes of Amazon – we are particularly keen on that sector.”
Although Palmer says that retail is the least favoured of the business’s target sectors, it still has pretty substantial involvement: “We’re building space for Lidl, Aldi, Sainsbury’s and B&M with all of the assets to be sold on completion. We’re also involved in some very large shopping centres via our property companies, and these include The Grafton Centre in Cambridge which is presently the subject of a major refurbishment and extension”.
The retail logistics sector is an area of particular focus, and this summer Palmer Capital recorded its largest single acquisition with the £86.4m purchase of a 750,000 sq ft distribution warehouse in Peterborough let to Debenhams.
Palmer observes: “In terms of logistics, warehouse properties for the likes of Amazon around major conurbations have shown exceptionally good rental growth over recent years and that is likely to continue because housing pressure has taken up so much old industrial land and continues to do so. Suburban logistics properties are becoming a rarer animal and consequentially the rental growth on them is forecast to be good”.
Most recently, Palmer Capital has given its backing to a new Manchester-based company called Harlex Property founded by former Kier Property development director James Nicholson. The North West was the only major UK region where there was previously not an active Palmer Capital-backed company.
“This type of situation is incredibly satisfying because you’re adding finance and knowledge to someone’s skill set and hoping that two and two make a lot more than four. It was satisfying 25 years ago with Wrenbridge and it’s still incredibly satisfying today.”
“ WE’RE BUILDING SPACE FOR LIDL, ALDI, SAINSBURY’S AND B&M WITH ALL OF THE ASSETS TO BE SOLD ON COMPLETION.”
Browse | Q3 2017
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