Lakestreet Capital Partners Demands Change to Benefit All Shareholders of Palace Capital Plc, the FTSE REIT

LONDON–(BUSINESS WIRE)–Lakestreet Capital Partners AG (“Lakestreet”), the largest shareholder in Palace Capital Plc (“Palace Capital”) with a 22.53% total shareholding* has this weekend requisitioned a general meeting of Palace Capital to remove its Chairman, Steven Owen and to appoint its founders as directors.

Lakestreet is deeply troubled by the excessive amount of remuneration that Steven Owen continues to extract for himself and the value destruction that shareholders suffer as a result.

Lakestreet takes particular concern with the following:

• The current cost of the two-person Board of Directors is equivalent to ca. 22.75% of the net property income of the remaining two properties in Newcastle and Northampton¹. This ratio is wholly unacceptable and demonstrates the urgency of our intervention.
• For the past four years, Steven Owen as Chairman of Palace Capital has received ca. £220,000 per annum, an amount Lakestreet deems excessive, especially when compared to Palace Capital’s previous five-person board of directors having received £195,000 in total.
• Steven Owen’s remuneration is 4x the amount received by the previous Chairman of Palace Capital.
• Steven Owen’s personal remuneration of approximately £220,000 per annum appears even more egregious considering he enjoyed the support of six executives up until 1 July 2025 and still enjoys the support of three executives as of today.
• Steven Owen is on track to receive up to £720,000 this financial year after having generously reallocated further units of the Short Term Incentive Plan (STIP) from “good leavers” to himself.
• Steven Owen’s remuneration this year will be 3x the previous year’s amount.
• Steven Owen has extracted a notice period of 12 months for his service contract, setting him up for another guaranteed £220,000 after the strategy of realising assets and returning cash to shareholders has been completed. A notice period of 12 months in the context of a strategy that is finite, is an outrageous benefit in our view.
• Steven Owen does not own a single share in Palace Capital.

Lakestreet further believes that Steven Owen decided to extend the financial year of Palace Capital from 31 March 2026 to 30 September 2026 to deliberately delay disclosure of his remuneration, obscure its extent by creating a higher comparable within the administrative cost line of the income statement and delay the timing for the next AGM to lengthen his tenure, robbing shareholders of a timely vote and entrenching himself on the Board of Directors.

Lakestreet notes that Steven Owen received significant NO and ABSTAIN votes with regards to his re-election at the Annual General Meeting in 2025, 2024 and 2023.

As a result of the above, Lakestreet has lost faith in the Chairman of Palace Capital. His actions have compelled Lakestreet to remove him from the Board of Directors and seek the appointment of Lakestreet’s founders in his place.

• Lakestreet is confident it can accelerate the sale of the remaining assets while removing all unnecessary costs from the business to deliver greater returns for shareholders.
• Lakestreet will not take a fee for the work, and neither will its proposed Directors.
• For the avoidance of doubt, Lakestreet is not expecting to be appointed as a manager of Palace Capital.
• Lakestreet is fully aligned with shareholders expecting further capital returns.
• Lakestreet is committed to complement tender offers with share buybacks on the market (as these can be executed at a substantial discount to NAV per share) to protect Palace Capital’s NAV per share.
• Lakestreet believes that shareholders will be able to achieve additional returns following the sale of Palace Capital’s assets and the return of proceeds to shareholders by realising the value of Palace Capital itself as a shell company.

With a total investment exceeding £9 million*, Lakestreet and its founders are fully aligned with shareholders in Palace Capital to deliver those incremental returns.

Lastly, Lakestreet would consider rescinding the requisition if the following conditions are met:

1. Steven Owen completes the strategy to realise asset sales and return capital to shareholders for a reasonable fee of £40,000 in total (Lakestreet’s proposed directors are prepared to do it for free).
2. Steven Owen waives his 12 month notice period.
3. Steven Owen irrevocably undertakes to use the £720,000 he will receive this financial year to purchase shares of Palace Capital in a personal capacity, creating alignment between himself and shareholders.
4. Palace Capital’s financial year ends on 31 March as has been the case for over a decade.
5. Palace Capital holds an annual general meeting no later than June 2026.
6. Palace Capital immediately begins complementing its tender offer strategy with on market purchases of shares.

Lakestreet welcomes dialogue with other concerned shareholders of Palace Capital and may be contacted at [email protected]

Christian Kappelhoff-Wulff, CEO, Lakestreet, said:

“There is a striking disconnect between the interests of Steven Owen versus the interests of shareholders in Palace Capital. Steven Owen receives excessive remuneration while not owning a single share in Palace Capital. In other words, Steven Owen benefits handsomely, irrespective of the outcome he delivers to shareholders.

On the other hand, Lakestreet has a substantial investment in Palace Capital. We will not be able to benefit financially unless the share price of Palace Capital appreciates and / or Palace Capital delivers returns on its shares. In other words, the only way for Lakestreet to benefit, is if all shareholders benefit.”

*About Lakestreet Capital Partners AG:

Lakestreet Capital Partners AG (“Lakestreet”) is an investment firm based in Switzerland co-founded by Christian Kappelhoff-Wulff and Valentin Pierburg with a successful record of investing its own capital in public equities, public debt and real estate since 2014.

Lakestreet has been a shareholder in Palace Capital since early 2024 and recently increased its stake to become Palace Capital’s largest shareholder.

Lakestreet directly owns 14.78% of the issued share capital of Palace Capital. Direct family members of its founders own a further 7.75% of the issued share capital, resulting in a 22.53% total shareholding.

The Lakestreet founders’ personal look-through investment in Palace Capital exceeds £9 million.

Contacts

Camarco

[email protected]