TCS close to letting entire Urban Exchange

Town Centre Securities has announced its final results for the year to 30 June 2010, saying the outlook for rental income and capital growth is relatively flat.

TCS, the Leeds-based developer which owns the £250m Piccadilly Basin development in Manchester, reported underlying profit before tax of £7.6m, compared to £7.8m in 2009.

Statutory profit after tax for the year was £39.6m, compared to a loss of £111.6m in 2009.

The investment property portfolio had valuation of £272.5m, which reflected an 11.2% increase on a like for like basis and net asset value per share had increased to 269p from 202p in 2009.

Edward Ziff, chairman and chief executive of TCS, said: "In Manchester we have made some progress letting Urban Exchange at Piccadilly Basin which currently represents 4.4% of our total voids."

The 120,000 sq ft property was previously let entirely to the Danish furniture retailer Ilva before it went into administration two years ago. Food retailer Aldi currently leases part of Urban Exchange.

Ziff added: "We are hopeful of shortly entering into an agreement to lease the entire first floor and we expect to let the remaining space by the end of 2011."

TCS reduced borrowings to £141.3m from £166.3m and said there is significant headroom for asset purchases and development within its existing portfolio.

The company proposes a final dividend of 7.34p, up from 5.4p in 2009, and total dividend per share of 10.36p, compared to 8.15p in 2009.

Ziff said: "This year, in contrast to the previous year, has been much more stable for the property sector and for Town Centre Securities. I am encouraged by the way in which we successfully negotiated the severe downturn and demonstrated the strength and resilience of our business.

"I believe there will be income and investment management opportunities for us to build on our solid foundations in the new financial year although the outlook for rental income and capital growth is relatively flat. I am also hopeful that at the Merrion Centre we can add long term value and growth to what has already proven to be an extremely resilient asset that underpins the quality of our income.

"Most importantly, we manage our portfolio to generate a sustainable and progressive dividend for the benefit of our shareholders and will continue to deliver attractive returns."

TCS said its car park business had performed well and now has an operating portfolio with over 4,000 spaces.

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