Overview
The Board is pleased to report that TCS has continued to make good progress in the on-going strengthening and improvement of its portfolio, and in the CitiPark car parking operation.
Since the year end results reported on 13 September 2017, we have undertaken further asset disposals, been appointed Development and Joint Venture Partner with Leeds City Council in a key new scheme, and are due to complete the Merrion House development in the next few weeks on time and budget. Furthermore, our residential scheme in Manchester is progressing well.
Trading
· Like-for-like passing rent up by 2.2% (30 June 2017: 2.3%)
· Overall occupancy level 99% (30 June 2017: 99%)
· Rent receipts for the current quarter 99% collected within 4 days of the quarter start
· Merrion Centre trading remains strong and we continue to grow its rental income
· CitiPark grows its revenues and profits
Development outlook
Following the successful opening of two hotels in Leeds, we are further improving our portfolio and enhancing future returns with the following developments:
· Merrion House development on track to complete on time and budget in January 2018.
· At our residential programme at Piccadilly Basin, Manchester, Burlington House is under construction due for completion in May 2019, and Eider House has full planning approval.
· TCS has been selected by Leeds City Council to develop a major new scheme in George Street, Leeds that will deliver a c. 117-unit aparthotel with a further 9 commercial units.
· The development in partnership with Urban Splash of Brownsfield Mill, Manchester, into loft style city apartments is ready to commence.
Intensive asset management
TCS continues to seek to maximise revenue delivery from its existing estate, with intensive asset management being a critical part of our on-going strategy. In the last six months a number of significant improvements have been delivered with new leases and rent reviews at The Merrion Centre, our Vicar Lane site opposite the Leeds Victoria Gate centre, in Manchester, and in Glasgow all driving improvements in income.
Furthermore, our ibis Styles hotel in Leeds, which opened in April 2017 and is operated under a management agreement, has performed strongly in its first nine months of trading.
In December Homebase vacated part of our property adjoining Waitrose in Milngavie. Whilst the property will remain empty for a period we see this as an opportunity to increase the income potential and strengthen the offer of this site by splitting the unit.
Disposals
Since the June 2017 year-end we have disposed of another property in Edinburgh in September for £6.3m, in line with its valuation.
· Disposals made over the last 12 months comprise 4 properties sold for over £25m in total, all at, or above, valuation.
· The disposals have provided capital to invest in our development programme. On an annualised basis the combination of the two new hotels and the increase in Merrion House rents will more than offset the £1.5m income lost due to these disposals.
CitiPark performs strongly
· The CitiPark business continues to deliver Income and profit growth year on year, with promising improvements being seen in our more recently acquired operations.
· We have recently taken a further 5% stake in YourParkingSpace.co.uk, taking our share to 15%. TCS is very excited about the prospects of this business, a website and mobile application that matches customers to available car parking spaces across the UK.
Strengthening the Board
· TCS recently announced the appointment of Jeremy Collins, former John Lewis Property Director, to the Board as an independent Non-Executive Director. Jeremy's appointment will be effective form the 1stFebruary 2018. Jeremy brings 35 years of commercial property experience and a unique perspective on retail development.
· Jeremy's appointment continues our board succession planning with three new Non-Executive Directors, a new Executive Director and a new Finance Director appointed over the last three years.
Notice of results
The Company expects to issue its final results for the half-year ended 31 December 2017 on 26 February 2018.
Edward Ziff, Chairman and Chief Executive, commented:
“We continue to successfully deliver considerable change within our portfolio. The combination of asset recycling, intensive asset management, and a strong development pipeline ensure that our future potential is being enhanced, whilst providing new opportunities for growth in income and valuations.
“The strength of our unique portfolio, and the success of the most recent development phase have allowed us to be bold in the sale of more mature assets. Furthermore, the strength of our CitiPark business continues to support financial delivery, whilst also bringing new opportunities such as YourParkingSpace.co.uk. We look forward to the future with confidence.“