Town's value for money policy pays off

The Leeds-based company said it is now in a position to take advantage of any sustained improvement in the economic environment.

The group said that its strong investment portfolio, and in particular its commitment to value for money retailing, is giving it a distinct advantage.

Merrion Centre in Leeds has been the star performer for the group

thanks to its focus on budget stores.

Town Centre's chairman and chief executive Edward Ziff said the shopping centre has shown great resilience despite recent retail administrations.

The company continues to look for opportunities to expand the property portfolio and car parking business and said its criteria is to identify "well priced opportunities with value today, not the promise of value tomorrow".

Whilst the tenant environment continues to be challenging, it has re-let over 90 per cent of the premises hit by tenant failures.

"Our positive, long-term approach has been a major driver in maintaining our overall rental income although rental negotiations inevitably continue to be impacted by current economic circumstances," said Mr Ziff.

He added that the rental collection performance has been strong.

The group reported a year on year increase in the rent roll on a like-for-like basis of 5.3 per cent. The overall rent roll has reduced as a result of disposals over the last couple of years.

The next portfolio valuation will be conducted following the year end on June 30 and will be reported at the annual results in September.

Mr Ziff said this valuation is expected to reflect the improved market conditions.

The company has net debts of 141.0m, down from 146.7m at the end of last year.

It has two term loan facilities worth 85m, with maturity dates from 2012 to 2014, and 15m of overdraft and money market facility.

"There is significant headroom in our facilities and we con- tinue to operate comfortably within our loan to value and interest cover covenants," said Mr Ziff.

Occupancy levels have improved during 2010 from 93 per cent at December 31 to 93.9 per cent at May 13.

"The broad spread of our tenants and our focus on the value for money retail sector, has continued to insulate us from the worst of the operational problems that have faced the retail property sector," said Mr Ziff.

He added that year on year car parking revenues have been stable. "We continue to seek new car parks, both to own and manage, with a view to building up another meaningful car park business within the company," he said.

Far from worrying about competition from the proposed Trinity Quarter and Eastgate schemes, Mr Ziff said Town Centre 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 its last results 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.

"We are pursuing retail and car park investment opportunities to grow our business and take advantage of our sound financial position," he added.

Pioneers of mixed-use scheme

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 and 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.

Town Centre 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.