Town Centre quickly filling empty spaces

The Leeds-based firm saw eight CVAs or insolvencies in the last year representing 2.5 per cent of the total rent roll. They included Poundworld, Mothercare, Crawshaws and Berketex as retailers struggle for survival amid the economic downturn and the rise in online shopping.The firm said these retail collapses hit net income in the first half by £250,000 and will continue to have a further impact in the second half.In better news for the group, six of the eight have now been re-let with rents ahead, on average, of previous levels. New tenants include Iceland and The Works. Two remaining units account for just 0.5 per cent of total rent roll.TCS chairman and chief executive Edward Ziff said: "We are making sure our portfolio is as fully rented out as can be."We are finding replacement tenants at the same, or better, rents."We took a decision three years ago that retail was going to get harder. Three years ago retail was over 70 per cent (of the group's portfolio). Now it's 52 per cent."The majority of TCS' retail portfolio is based on every day shopping rather than prime high street shops."We're finding tenants who are keen to expand," said Mr Ziff."There's a good number of retailers still expanding. It's so far so good."TCS has switched to office and residential space as it believes the retail ratio will decline further.In the half year to December 31, the group made a statutory pre-tax loss of £8.7m as a result of unrealised valuation movements and a loss on sale of an investment property."The statutory figures are always distorted. It's a valuation change," said Mr Ziff.“Whilst it is disappointing to report half year valuation reductions and profits slightly down due to short term market fluctuations and some one-off costs, I remain confident in the quality and potential of our portfolio and the changes we are making to it.”The overall occupancy level increased to 96 per cent from 95 per cent.Analyst David Brockton at Liberum said: "Town Centre Securities first half results confirm retail pressure offsetting the benefits of the group’s ongoing efforts to evolve its portfolio mix towards mixed uses."