Town Centre Securities hails the resilience of shopping complex

Town Centre's chairman and chief executive Edward Ziff said the shopping centre had shown great resilience during 2009 despite recent store group administrations.

"Merrion has been the star performer," he said. "It is performing well against this time last year. When we've had voids we've relet to stronger tenants."

He added that he doesn't believe the centre will fall in value in 2010.

The centre has performed well during the recession thanks to its focus on budget stores.

Mr Ziff said that far from worrying about competition from the proposed Trinity Quarter and Eastgate schemes, the group is looking forward to their arrival.

"We're not worried about them," said Mr Ziff. "We think they would both be great for Leeds.

"At the moment Trinity Quarter is a blot on the landscape. We have these great big hoardings and huge holes in the ground. The sooner they are developed the better. Leeds needs new development."

Leeds-based Town Centre said pre-tax profits for the six months to December 31 rose to 31.5m, compared with a loss of 72.9m the previous year.

Mr Ziff said the group is in a "robust position" thanks to tight control of its finances.

Net asset value per share increased to 257p from 202p, while the group made a 9m profit on the repurchase of debenture stock.

The company is proposing an interim dividend of 3.02p per share, up 10 per cent on last year.

The group's shares closed up 7.2 per cent last night, a rise of 11p to 164p.

Analysts at KBC Peel Hunt repeated their "buy" rating on the stock and said the firm's adjusted net asset value per share of 257p was up a better than expected 27 per cent.

As a result, the broker raised its full-year adjusted net asset value per share estimates for the group to 275p, up from 250p previously, which assumes portfolio growth in the second half of 3.5 per cent.

"This reflects Town Centre's non-London exposure though this assumption may prove conservative," said KBC Peel Hunt in a note.

The group's occupancy levels rose to 93 per cent over the period, up from 92 per cent, while the company achieved 17m from property sales.

The company made 2.5m after selling eight new apartments and four town houses in Harrogate, which the group described as "particularly pleasing".

The group's car parking business has continued to perform well and there are plans to expand the business.

"The real star performer in car parking was Clarence Dock in Leeds," said Mr Ziff.

"Income wasn't increased by raising charges, although there was a small increase. It was driven largely by improved occupancy."

Gross borrowings at December 31 were 146.7m compared to 185.3m on June 30, following the repurchase of debenture stock and property sales.

Mr Ziff said that activity is coming back into the investment market and there is "evidence of a slight improvement in the property sector", but he added that he continues to regard 2010 with caution.

The group is looking to expand through the purchase of affordable high street shops where rents are at sensible levels.

Mr Ziff said Town Centre has the facilities to spend up to 50m on expansion.

Gross revenue eased to 11.28m from 14.25m the year before, while like-for-like underlying property rents increased by around two per cent on an annualised basis.

Mr Ziff said he was in no doubt that the worst is over although he expects there will be some outperformance and some underperformance across the property and retail sector.

"Town Centre Securities is in as strong a position as we could hope for," he added.

"The market in 2010 will gradually improve, we are managing our cost base."

Strong links with charity

Town Centre Securities was founded by Arnold Ziff in 1959 and floated on the London Stock Exchange in 1960.

With firm foundations in the north of England and Scotland, the group has pioneered the mixed-use scheme. It is involved in a number of large-scale regeneration and new build developments. It has a property portfolio exceeding 295m and an annual income of 22m.

The group has a commitment to sustainable development and specialises in mixed use developments close to transport hubs in major cities across the UK.

The group has long-standing links with numerous local and national charities including LionHeart, the charity for RICS members and their families, Leeds Jewish Welfare Board, the NSPCC, West Yorkshire Police (Community Trust), Breast Cancer Haven, Leeds Crypt and the Variety Club of Great Britain.