TCS enjoys strong pipeline of work
Owner of Merrion Centre optimistic
PROPERTY: Profit dipped at property firm Town Centre Securities but the group said low interest rates, low inflation and a strong pipeline of work would drive up the figure in the future. The group said it has a strong pipeline of developments and refurbishments, with over £ 30m of development spend underway.
PROPERTY INVESTOR and car park operator Town Centre Securities reported a 12 per cent dip in profits in the first half of the year but said low interest rates, low inflation and a strong pipeline of work would drive up the figure.
The Leeds- based firm said pretax profit fell to £ 11.7m for the six months to December 31, down from £ 13.3m in 2014, due to a lower valuation movement on investment properties, which went down to £ 7.6m from £ 10.1m.
Net revenue rose to £ 9.3m from £ 8.8m, whilst net asset value per share rose to 359p at the end of December from 326p at the same point a year earlier.
Chairman and chief executive Edward Ziff said: “We believe that the current low interest and low inflation environment is here to stay for the foreseeable future and will continue to give us opportunities to grow our income and profits and thereby enable us to further enhance the net asset value of the group.”
The group, which owns the Merrion Centre in Leeds, said it has a strong pipeline of developments and refurbishments, with over £ 30m of development spend underway.
Work continues on the £ 34m refurbishment of Merrion House, which consists of 120,000 sq ft of offices and creation of 50,000 sq ft of new office space. The project, which is expected to complete in 2018, is expected to add £ 5m to net assets and £ 0.9m to annual income.
Meanwhile, work is also underway on turning Merrion Hotel into a 134- room Ibis Styles hotel and Marco Pierre White restaurant, which is scheduled for completion in the first half of 2017.
It is expected to add £ 0.6m to annual income, growing to £ 1m.
The company has also agreed a deal with Premier Inn for its £ 10m, 136- bedroom hotel on Whitehall Road where preparatory works are underway.
The value of the site upon completion is estimated to be in excess of £ 12.5m.
Defending the decision to bring another Premier Inn to Leeds, which already has six in and around the city, Mr Ziff said: “What Leeds is short of is hotel operators at the correct place in their market. Five star is not what the market needs.”
He added: “If we opened a new brand of hotel it would take a long time to establish itself. People know what they are getting with Premier Inn and it’s a great offer.”
TCS said discussions are continuing in respect of the next phase of the office development at Whitehall Riverside and a 500- space multi- storey car park on the above site.
Mr Ziff described the last six months of 2015 as “busy, exciting and interesting”. He said the upturn of the Yorkshire property market presented lots of opportunities for the company and said his focus was on working hard at enhancing value across its portfolio in the region.
He said the First Direct Arena had boosted late- night footfall at the Merrion Centre, but added that the challenge now was to get retailers to stay open for longer. “On arena nights, the bars and restaurants are buzzing until 11pm,” he said.
The centre’s overall occupancy rate is 96 per cent and Mr Ziff said TCS was in talks with some national names to take over the remaining leisure space.
Its newly- refurbished anchor store, Morrisons, which was the first store in the chain using a new brand shopfront design, is trading ahead of expectations, Mr Ziff said.
Meanwhile, the group has disposed of the Sainsbury’s Local building, formerly Austin Reed, on Albion Street, Leeds for £ 6.5m. The group has a further £ 20m of assets earmarked for disposal over the next 12 months.
Mr Ziff said: “Whilst we are busy, we are cautiously busy with acquisitions and disposals, trying to marry them.”
In the group’s half year statement, Mr Ziff said: “Our total shareholder return over the last six and twelve months of 13.3 per cent and 26.7 per cent respectively places the group in the top quartile of the sector.
“We continue to achieve this by the intensive asset management of our properties, concentrating particularly on income.”
On arena nights the bars and restaurants are buzzing until 11pm. Edward Ziff, chairman and chief executive of Town Centre Securities.
EDWARD ZIFF: The chief executive of Town Centre Securities believes low interest rates, low inflation and a strong pipeline of work will boost future results.