Town Centre Regulatory News (TOWN)

TOWN CENTRE SECURITIES PLC("TCS" or "the Company")Interim Management Statement

Town Centre Securities PLC, the Leeds based property investment and development company, presents its Interim Management Statement covering the period from 1 January 2011 to 16 May 2011 ("the period").

Overview

During the period the Company has continued to focus on the management of its existing portfolio of investment properties and car parks. Our performance overall remains consistent with that reported at the time of our half year results and is in line with our expectations for the year as a whole.

Our principal success during the period has been the lettings at Urban Exchange in Manchester. Marks & Spencer have entered into an agreement to lease 19,000 sq ft for an Outlet store and Pure Gym (a 24 hour gym operator) have entered into an agreement to lease 19,000 sq ft on the lower ground floor. We anticipate that both tenants will be trading by September. Following the opening of Go Outdoors in April, we now have only one unit, (7,000 sq ft) unoccupied and we hope it will be let before the end of the calendar year.

Our void level now stands at 2.97% which is the lowest level in TCS's recent history and has reduced from 4.6% at 31 December 2010. Inevitably the future void level will be dependent upon lease renewals being successfully completed during 2011/12 and unforeseen voids due to tenant failures and administrations.

Asset Management

We actively manage our assets and consistent with the half year results there has been a year on year increase in the rent roll on a like-for-like basis of 1.8%.

Rent collection was again very strong with 99% of our March quarter day rents collected within five days of the due date. The broad spread of our tenants (TCS has only six tenants with two leases, two tenants with three leases and one with four), and our focus on the value for money retail sector, has continued to stand us in good stead.

Our performance remains consistent with the first half of the financial year and we are encouraged by the strong performance of the business when set against a backdrop of relatively poor retail performance figures nationally. The tenant market remains challenging and we closely monitor tenant performance.

We continue to progress our plans for the ongoing refurbishment of the Merrion Centre. We have recently entered into a number of agreements which will enable us to refurbish the remainder of the Merrion Street elevation of the Centre and add KFC and Coral to our tenant line up. Responding to the commencement in February 2011 of the construction of the Leeds Arena, a 13,500 capacity concert and events venue located immediately adjacent to the Merrion Centre, we are advancing our plans for the refurbishment of the multi-storey car park and the creation of additional retail/leisure units at ground floor level.

Financial performance

As at 16 May 2011, the Company had net debt of £138.9m, (31 December 2010 £144.6m) comprising £106.0m of 5.375% debenture stock repayable in 2031, and £32.9m of bank loans.

TCS has two term loan facilities, together £85m, with maturity dates from 2012 to 2014, and £15m of overdraft and money market facility. There is significant headroom in our facilities and we continue to operate comfortably within our loan to value and interest cover covenants. We are in discussions to seek to extend the term of our bank debt and expect these discussions to conclude in advance of the publication of our results in September. We have also hedged an element of our floating rate debt to protect our exposure to future rate increases.

Acquisitions and Disposals

During the period we disposed of a single property in Derby let to Currys. The disposal proceeds amounted to £5.0m (6.4% net initial yield) and this resulted in a profit on disposal of £200,000. The proceeds of the disposal have been used to reduce borrowings.

We have continued to look for opportunities to grow our property portfolio and car parking business. So far, available opportunities have not met our criteria for property acquisitions where we can create value. This relies on identifying properly priced opportunities with value now rather than the promise of value in the future.

Car Parking

Year on year, car parking revenues are stable despite increased competition, particularly from former development sites. The Merrion Centre car park operation now under our management is performing in line with expectations.

Edward Ziff, Chairman, commenting, said:

"I am delighted to report the excellent letting progress at Urban Exchange in Manchester. We are incredibly pleased to have been able to let a building of this magnitude thereby creating a successful scheme in the midst of a challenging economic climate.

"Town Centre Securities has continued to perform strongly since the half year end. This performance demonstrates further our strong asset management capabilities and the importance of retaining our focus on the value for money retail sector."

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