Town Centre Securities Share Discussion Threads

[speedsgh] 23/4/2020 20:06

TCS unveil First Look a Leeds' Largest Available Floorplate -

Town Centre Securities PLC (TCS), has released exclusive images of its newly rebranded 123 Albion Street office development which has the largest available floorplate in Leeds City Centre...

123 Albion Street Offices Preparing For Launch Following Refurb

Formerly The Cube, the newly named 123 Albion Street is in the final stages of a comprehensive £5m refurbishment programme to deliver circa 60,000 sq. ft of Grade A offices into the City’s pipeline, in suites from 8,000 sq. ft upwards, including 19,000 sq. ft floorplate which will be the largest one available to occupiers in the city centre.

123 Albion Street is located on the edge of the newly defined ‘Innovation District’ of Leeds City Centre and is equidistant between the retail and office core. In addition to the 60,000 sq. ft of prime office accommodation over 3 floors and an atrium reception currently being refurbished, the building includes 22,000 sq. ft of ground floor retail space and ample parking. The refurbishment will see the comprehensive refurbishment of the offices, floorplates and common parts as well as improved shower and parking facilities plus cycling and EV CitiCharge.

Situated adjacent to TCS’s largest single asset, the Merrion Centre, 123 Albion Street is also on the main arterial route of Woodhouse Lane, Great George Street and Merrion Street and fronts several main bus routes while also being a short walk from Leeds Train Station.

The location benefits from numerous leisure and recreational facilities nearby with the immediate retail and leisure occupiers being Turtle Bay, Vue Cinema, Prezzo and The Picture House. More notably, the area has benefited from significant investment in recent years with the £60 million development of Leeds First Direct Arena. This has acted as the catalyst for a plethora of subsequent new student development projects for both residential and education facilities.

TCS has appointed the office agency teams at CBRE and Knight Frank as marketing agents for the new offices. Graham Interior Fit-Out are the main contractor responsible for delivering the scheme, which is set to be completed in July 2020.

Edward Ziff, Chairman & Chief Executive, TCS commented:

“Since we acquired 123 Albion Street as The Cube at the end of 2018, we have been formulating a masterplan to maximise the potential of this strategically located asset and are confident that our investment into creating almost 60,000 sq. ft of Grade A offices will be a welcome addition to the Leeds City Centre office pipeline.

This location has so much to offer occupiers and we are delighted that despite the challenging backdrop across the globe the team are still on track to deliver the extensive refurbishment programme. It is a real opportunity to be able to bring the largest available floorplate in the city centre to market and we are excited to share these first images of how the building will look upon completion of the works.”

[spectoacc] 15/4/2020 20:45

Seen a mixture of pay cuts but yes - definitely all required. If taxpayer is paying staff 80% of wages, no way shareholders should be paying directors more than 80%.

Not in TOWN, and not been to the Merrion in some time, but surely Morrisons there is doing v well. Can't imagine many other shops open, tho have been surprised how "busy" it still is out there.

As you say - debt is going to be an issue if all this continues (which it will). We'll only get halfway through an easing of lock-down before we're locked down again IMO.

[nickrl] 09/4/2020 09:58

TOWN's C19 update out and they report 71% of rent (& service charge) collected for qtr with 15% deferred and the remainder still under review (we aint paying i guess). Reasonable collection rate given its 50% retail and mixed bag of other assets with no logistics to help either.

Too high an LTV at 48% and with 33m RCF due in April 21 and 35m in June 21 (has option to extend) the clock is ticking on this one

For now the dividend isn't canned as not payable til June so they can sit on the fence but with Ziff family being owner and manager will they want to lose the income?

Also board taken a 20% pay cut which is 20% more than ive seen from any other propco release so far.

[plunger2] 04/4/2020 16:06

Not that it matters a damn but it was a sell I think.

This whole COVID problem is the very definition of an hiatus.
Making any prediction is impossible without some medical knowledge of what's happening behind the scenes. Once there is more clarity on mortality rates, immunity rates, likely vaccine timeframe we'll have an idea.
Till then stay tuned!

[spectoacc] 03/4/2020 10:02

Director buy from one of the Ziffs. And like all the director buys I've seen in this collapse - and there's been a huge number - it's pocket change, 15,000 shares.

Does at least rule out any highly unlikely MBO!

[inki] 02/4/2020 17:54

It is impossible to value property assets at the moment. However the discount to net assets prior to Covid was already high, so that obtaining non-concert party agreement to a full buyout is unlikely. It is unlikely there is liquidity to achieve a full buyout, when flexibility would be needed for future development expenditure.
Historically this company has also been strong at recovering rent.

[nickrl] 01/4/2020 23:38

TOWN have c£19m annual rent which i estimate 50-60% is assured unless non retail tenants are going to use the three month protection but so far this qtr that doesnt appear to be happening outside of retail. However, with heavy outgoing outgoings of £8m pa on interest and £7m on admin costs albeit they can hack some admin costs means they will be hurting. Already declared dividend will probably survive given Ziff family ownership but price doesn't reflect the risks going forward but will the family consider full buyout?

[spectoacc] 28/2/2020 13:18

Well I'll admit I only go there for Morrisons :)

They seem always well-let but can't imagine the rents have been going anywhere but down.

Not a holder of TOWN (or most of the others) either.

[speedsgh] 28/2/2020 13:12

Nor will it start me! Not least because of the geography but I'm afraid I'm allergic to high streets/shopping centres/retail parks full stop. A retailer's nightmare. If I need something & I can buy it online and get it delivered to my door, then I will just hit the buy button to avoid the whole shopping experience. About the only shopping I actually enjoy is for food as I like to cook. Have yet to be persuaded to move over to the other side (online) for that.

[spectoacc] 28/2/2020 12:33

Coronavirus won't stop us shopping at the Merrion.

[speedsgh] 28/2/2020 12:30

Admirable share price resilience here so far in a challenging market.

[speedsgh] 26/2/2020 13:08

Half year results for the six months ended 31 December 2019 -

Financial Performance

· Interim dividend unchanged at 3.25p (2018: 3.25p)
· The Company has applied IFRS 16 lease accounting standard for the first time which has reduced earnings by £0.3m. Going forward, the Company will also report Adjusted EPRA Earnings which removes the effect of IFRS 16
· Adjusted EPRA Earnings before tax increased to £4.4m (2018: £3.7m), mainly driven by one off dilapidations income in the current year. EPRA Earnings were £4.1m (2018: £3.7m)
· Adjusted EPRA earnings per share at 8.2p (2018: 6.9p). EPRA EPS at 7.7p (2018: 6.9p)
· Statutory loss before tax of £0.2m with EPRA Earnings offset by unrealised valuation movements (2018: £8.7m loss)
· Net assets per share down 3.2% since 30 June 2019 at 343p (2018: 361p; 30 June 2019: 354p)
· Like for like portfolio value decreased by 1.2%
· Merrion Estate increased in value by 0.3% including capex, driven by asset management initiatives
· Net borrowings have continued to decrease to £174.0m excluding finance leases / IFRS 16 (30 June 2019: £177.5m)
· Loan to value ratio of 48.5% (30 June 2019: 48.8%) (excluding finance leases / IFRS 16)

Operational Performance

· Robust underlying operational performance
· Like-for-like (LFL) passing rent up by 0.4% (FY19: 2.6%) versus a year ago, excluding the effect of Milngavie and The Cube redevelopment projects
· Overall occupancy level increased to 96.7% (June 2019: 95.8%)
· Retail & leisure exposure reduced to 49%, from 70% in 2016. Pure retail now only accounts for 35% of the portfolio by value
· CitiPark continued to grow its revenues and operating profits

Commenting on the results, Edward Ziff, Chairman and Chief Executive said;

"In our sixtieth year I am pleased to report a resilient set of results and the continuation of our strong dividend track record. We continue to invest in our assets, with significant redevelopment schemes underway in both Leeds and Manchester. Progress with our development pipeline continues, and following the successful completion of our first dedicated PRS building, Burlington House, in Manchester, it's pleasing to have been awarded Insider's North West Apartment Developer of the Year. Plans for our next development, a joint venture with Leeds City Council to build a 136-room aparthotel, are progressing well.

"The active management of our portfolio has ensured delivery of resilient earnings and a stable valuation. Of particular note, is the increase in value of the Merrion Estate. The ongoing diversification of our portfolio, with our retail assets representing only 35% of the portfolio, will continue as we actively look to further sell retail assets."

Dividends

The interim dividend of 3.25p per share (2018: 3.25p) will be paid as a property income distribution and will amount to £1.7m. It will be paid on 26 June 2020 to shareholders registered on 29 May 2020. The final dividend for 2019 of 8.50p per share was paid on 7 January 2020.

[inki] 22/1/2020 16:40

T/U - Steady as she goes - gently edging away from retail property exposure. Meanwhile retaining a decent level of occupancy.

[mortimer7] 22/1/2020 09:21

Decent T/U today.

[speedsgh] 14/10/2019 12:33

New Edison research note released today...

[castleford tiger] 07/10/2019 09:53

Hopefully we have turned the corner.
Retail still in decline however.
Tiger

[speedsgh] 07/10/2019 09:33

Interesting to note in his recent FT column that Lord John Lee has reintroduced TOWN into his ISA portfolio...



"In addition, two old friends have returned to my Isa portfolio — the carefully stewarded Ziff family’s Town Centre Securities with a very substantial discount to assets and on a 6.4 per cent yield..."

[jonwig] 04/10/2019 08:58

One or two UK property cos are beginning to throw up possible bargain price signals. Another is MCKS, which I held in 2013.

Why do you find cheap stuff when the market is telling you to keep clear??

[castleford tiger] 03/10/2019 17:25

You get reward v risk.
Little risk here TBH

Tiger

[spectoacc] 01/10/2019 08:51

That Leeds council deal was a good one - the offices above The Merrion were pretty bad and pretty under-occupied, had the pleasure of going in them once :)

And as you say - Morrisons not going anywhere surely.

I like the divi being covered but if this was half the other prop co's I follow, the divi would be 10% & uncovered! :)

[jonwig] 01/10/2019 08:34

@ Spec - Merrion has an anchor tenant (Leeds CC) which shared in the redevelopment, and the Morrisons is the nearest supermarket to the Uni, so I guess neither of those will be leaving!

I'm in a similar mood to you: not a compelling buy as yet. A pause on development could enable the most recent properties to generate cash and make for a higher dividend, and still covered.

[spectoacc] 01/10/2019 08:22

I'm still on TOWN.

49.3% LTV, ticked up due to NAV fall - can expect more of that.

6.7% is hardly a sector-leading divi - tho is at least covered.

Occupancy at 96% is good, despite 8 CVAs/admins during the period. All but one re-let.

Retail/leisure fallen below 50% from 70% a few years ago - great, but that's still a lot of retail, and unless they sell the Merrion (they won't) there's a limit to how low that can go. ie they're always going to be retail-y. They acknowledge as much.

NAV fell from 384p to 354p - I'm struggling to see that getting reversed any time soon.

L4L rent +2.6%, a positive, but half recent rises.

Considering buy-backs - a little tricky when LTV approaching 50% surely!

Running to stand still - running to go backwards in fact - but at what price is it a buy...

[spectoacc] 30/9/2019 16:55

@Jonwig - indeed. Is the High St dead? Possibly. Seems to be the usual case of things taking much longer to happen than you'd think (internet shopping) but when they do happen - pow, over in an instant. Newspapers another example.

Saying that - and trying to ignore the debt, particularly the 2031 debenture - TOWN is in some reasonably solid assets.

I feel it's a buy - just not yet!

[jonwig] 30/9/2019 16:41

"57-year record". Sometimes, looking at markets you have to wonder if "This Time it's Different."