Re-set TCS keen to advance pipeline

Declaring “historically low levels of variable rate borrowing” Leeds-based Town Centre Securities is looking ahead with confidence, chairman Edward Ziff said in the company’s year-end results.

Delivering its audited year-end results for the year to 30 June 2024, the investor, developer, hotel and car parking group narrowed its loss before tax to £8m, from £29.5m in 2023.

There was an improvement in underlying earnings before tax, from £3.1m to £3.8m. A £1.7m tax credit was also received.

TCS’s like-for-like portfolio valuation fell by 4.7% from June 2023, with offices in particular affected. Statutory net assets stand at £119.6m.

The group said there is a focus on bringing forward developments and acquiring assets in Leeds, Manchester and even London – there is “significant headroom” of £20.4m on existing credit facilities.

TCS said that its resilient trading performance has carried on into the first half of FY2025. Rental income remains robust with more than 99% of rents invoiced in the last quarter now collected.

Chairman and chief executive Edward Ziff said: “Our property rental business, car park and hotel operations continue to deliver resilient underlying revenues and earnings against challenging macro-economic conditions.

“These conditions have led to movements in the underlying yields and a further valuation reduction of our property portfolio, in particular with our office investments. In the last four months we have seen inflation falling closer to the Government’s target of 2%, and the Bank of England have reduced interest rates by 25bps, which may lead to an improvement in liquidity in the property investment markets and result in valuations stabilising. However, with continued low levels of variable interest rate bank debt, I am confident that we are in a strong position in these uncertain times.

TCS’s portfolio now comprises 30% invested in retail and leisure; 29% offices; 16% car parks; 13% residential; 8% developments; and 4% hotels. Leeds and Manchester assets account for 88% of the portfolio.

One of the key projects for the group is a 1,100-bed student accommodation project that will form the next phase of the Merrion Centre’s evolution, with plans filed in December 2023.

The next phases of Whitehall Riverside are also advancing, with offices, parking and a hotel mixed-use proposal greenlit in May last year. Work is progressing on assembling delivery teams.

Three further CitiParks were opened in the year, and a car park leased to NCP acquired in Sheffield for £1.5m.

Ziff concluded: “Our attention is now focusing on investing in our development programme over the coming years. However we remain ever mindful that taking advantage of potentially accretive opportunities needs to be balanced against retaining robust finances.

“Overall, the business has now been reset, with a more diverse portfolio of assets, lower levels of gearing and more importantly historically low levels of variable rate borrowings – and is now looking predominantly at bringing forward our development pipeline. We look ahead with confidence.”