Town Centre sees assets and profits drop – Town Centre Securities reports that, for the year ended 30 June 2019, its EPRA NAV fell by 7.8% to 354p on the back of a 3.8% fall in the value of its portfolio.
Despite a 2.6% increase in like-for-like rents, EPRA profit before tax fell by 7.9% to GBP6.4m (2018: GBP6.9m), driven by various factors including investments, the short-term effect of retail CVAs, and a one-off dilapidation benefit in the prior year. EPRA earnings per share fell by 7.9% to 12.0p (2018: 13.0p). The dividend was maintained at 11.75p.
The valuation fall means that the company’s loan to value ratio has risen to 49.3% from 47.5% but it still has a £26m headroom in its borrowing facilities.
Notable events include:
- The conversion of the retail unit in Milngavie vacated by Homebase, creating two units let to Aldi and Home Bargains, driving an 8% increase in rent and a net 23% increase in value.
- Purchase of The Cube in Leeds and Ducie House in Manchester – redevelopment schemes underway in both buildings
- Eight tenants either went into administration or launched a CVA during the year
- Of those eight units, four have been re-let to new tenants and a further three have seen the incumbent retailer choose to remain at the same rent
- One unit is now void and in the process of being re-let. This unit represent just 0.4% of the total rent roll.
- Their CitiPark business continued to grow and contribute a diversified source of earnings with net revenues up 8.2% year on year, and operating profit up 9.7% year on year.
- Refinanced Merrion House with Leeds City Council resulting in a cash advance of GBP26.4m in July 2018
- Sold Rochdale Retail Park in January for GBP13.2m
From their development pipeline (estimated GDV – gross development value of over GBP600m):
- Completed construction of our 91-unit PRS scheme Burlington House in Manchester in joint venture with Highgrove Group. The scheme is already 99% let and is ahead of rental expectations.
- Achieved planning approval for a 17-storey office tower above the Merrion Centre, adding to immediate value.
They reduced exposure to retail – pure retail is 36% of the portfolio, leisure another 14%. Those two together accounted for 70% of the portfolio in 2016.
TOWN : Town Centre sees assets and profits drop
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