TCS counts cost of Piccadilly voids

Town Centre Securities issued mixed results for the second half of 2009 and said it was confident of further deals at Piccadilly Basin in Manchester.

The large former Ilva store vacated when the furniture retailer collapsed is now partly occupied by Aldi. A further prospective tenant has retail space under offer, TCS said.

Group occupancy levels "remain satisfactory" at 93% (30 June 2009: 92%), although the statistics have been hit by the sale of fully occupied investments.

Edward Ziff, chairman and chief executive of the Yorkshire-based developer, said: "Aldi are now occupying and trading from our Piccadilly Basin retail store and a further retail unit is under offer. The remaining space at Piccadilly Basin represents 50% of total voids."

Ziff added: "Fluctuations in occupancy levels due to tenant Administrations and Company Voluntary Arrangements have continued to be well managed. Those which have occurred in the period have resulted in lettings at higher than the passing rental levels."

The car park at Piccadilly Basin performed in line with expectations and TCS is now looking to build this more stable side of the business.

The results showed a rise in net asset value from 202p a share in June 2009 to 257p at the end of December. Profit before tax was £31.5m (2008: loss of £72.9). Much of this came from a surplus on revaluation of investment property of £19.7m (2008: deficit of £76.6m). Gross borrowings at 31 December 2009 were £146.7m (30 June 2009: £185.3m) following the repurchase of debenture stock and property sales.

Investment sales included the disposal of BDP's studio in Piccadilly Basin to a private trust for £7m in July.

Ziff said: "Our close attention to balance sheet management has left us in a robust position and we look, selectively, for opportunities to acquire stock that fits into our longer term strategy. Nevertheless, we continue to regard 2010 with caution and are ready for any change in market conditions that may occur."

An interim dividend of 3.02p per share (2008: 2.75p) is proposed.

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