Portfolio progress highlighted in latest TCS results

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Leeds and London-based property investor Town Centre Securities (TCS) has continued to make “good progress” in the on-going repositioning of its portfolio as the firm unveils its half year results.

Since July, TCS has undertaken further asset recycling, made progress in the next phase of its development programme, and completed the refinancing of Merrion House.

Overall, continued asset recycling has reduced the proportion of retail and leisure assets to 52%, down from 70% in 2016.

The Company continues to produce consistent operational metrics, critical to delivering stable long-term underlying financial performance, despite the challenging market.

For the year ended 31 December 2018, overall occupancy level increased to 96% (June 2018: 95%).

Like-for-like passing rent up by 0.9% (FY18: 4.1%) versus a year ago, supported by the updated Merrion House lease to Leeds City Council.

On the refinancing of Merrion House, TCS said it “enhanced financial flexibility and provided an immediate benefit to our leverage ratios”.

Elsewhere, CitiPark continues to grow its revenues and profits.

As previous stated, TCS continues to reposition its portfolio. According to the firm’s results, the most recent asset sales and purchases activity further reduces the proportion of retail and leisure assets to 52%, down from 70% in 2016.

This strategic repositioning also saw the sale of Rochdale Central Retail Park for £13.2 million in December 2018, previously generating £1.15 million annual net rent.

It also includes the previously announced acquisitions of The Cube in Leeds for £12.8 million; a retail unit in Gordon Street, Glasgow for £2.6 million, and a retail and residential unit on Chiswick High Road, London for £1.7 million.

In total, TCS said these acquisitions will generate on-going annual income of over £1.4 million.

The firm said it continues to focus on “property acquisition and development opportunities in Leeds and Manchester”, which it believes have “excellent prospects”.

Chairman and Chief Executive Edward Ziff said: “We continue to improve our portfolio and maintain our track record of managing the business for long-term success, notwithstanding that the combination of Brexit uncertainty and continued seismic change in retailing makes it a tougher environment in which to operate.

“This means the importance of our development pipeline, that we have built up over time into a sizable opportunity, is clearer than ever.

“Our expertise in active asset and tenant management has resulted in TCS improving future income levels from properties vacated due to CVAs and insolvencies.

“Furthermore, while we reduce the overall proportion of retail in our portfolio, the resulting greater focus on supermarket and convenience retailing is helping de-risk the Company from the worst of the high street disruption.

“We remain optimistic about TCS’s prospects and the opportunities in our development pipeline.”