Green’s Dictionary of Slang

1. (N.Z. prison) a cell.

2001

D. Looser Boobslang [U. Canterbury D.Phil. thesis] 133/2: palace n. a cell.

2. (UK gay) a public lavatory.

1909		Ware Passing Eng. 94/2: cottages (Fast youths’). Vespasians; retiring points for half a minute [...] Passing away in favour of underground palaces dedicated to Cloacina—palaces generally termed ‘Fountains Temples’ or ‘Palaces’.
1972		B. Rodgers Queens’ Vernacular.