Town Centre Securities PLC Securities Centre Town | Annual Report & Accounts 2020 Accounts & Report Annual |

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Town Centre Securities PLC Securities Centre Town | Annual Report & Accounts 2020 Accounts & Report Annual | Town Centre Securities PLC Securities Centre Town | Annual Report & Accounts 2020 Accounts & Report Annual | Resetting the business for the future Annual Report and Accounts 2020 Town Centre Securities PLC Annual Report & Accounts 2020 Highlights 01. Strategic Report Who we are At a glance 2 Market overview 4 Business model 6 EPRA net assets per share Adjusted EPRA earnings before tax Chairman and Chief Executive’s statement 8 Strategy and KPIs 12 Town Centre Strategy in action 14 Portfolio review 18 Divisional review 22 292p £2.6m Section 172 statement 32 Securities (TCS) is a Corporate responsibility 34 2020 292p 2020 £2.6m Financial review 44 Risk Report 50 property investment 2019 354p 2019 £6.4m 02. Corporate Governance 2018 384p 2018 £6.9m Introduction from Chairman 56 Board of Directors 58 and development Nomination Committee Report 66 Audit Committee Report 68 Total dividends per share Statutory profit before tax Directors' Remuneration Report 72 Directors' Report 80 company with Statement of Directors’ responsibilities 82 03. Financial Statements 5.0p (£24.2m) Independent Auditor’s Report 84 assets of over Consolidated income statement 90 2020 5.0p (£24.2m) 2020 Consolidated statement 90 of comprehensive income 2019 11.75p (£12.5m) 2019 Consolidated balance sheet 91 £380 million. Consolidated statement 92 2018 11.75p 2018 £18.4m of changes in equity Consolidated cash flow statement 93 Notes to the consolidated 94 financial statements Company balance sheet 122 Our purpose Total property return Adjusted EPRA earnings per share Leeds Statement of changes in equity 123 Notes to the Company 124 Through the acquisition and active financial statements management of property in sustainable (2.1%) 4.9p 04. Shareholder Information Notice of Annual General Meeting 134 (2.1%) 2020 2020 4.9p Investor information 143 locations, we create quality spaces for our tenants, help communities to thrive 2019 1.3% 2019 12.0p and generate value for shareholders 2018 9.4% 2018 13.0p over the long term. Total shareholder return Statutory earnings per share Retail & Leisure 34% Hotels 10% (50.4%) (45.5p) O ff i c e s 30% Development 6% Car Parks 16% Other 4% (50.4%) 2020 (45.5p) 2020 Manchester (25.0%) 2019 (23.4p) 2019 2018 3.2% 2018 34.6p Retail & Leisure 22% Residential 16% Carvers Warehouse O ff i c e s 20% Development 42% & Car Parks 1 Town Centre Securities PLC Annual Report & Accounts 2020 01. Strategic Report 1. Carvers Warehouse At a glance 2. We Are Cow, Vicar Lane TCS is a UK real estate investment trust 3 ibis Styles Hotel, Leeds that has built a diversified, mixed use 4. Burlington House portfolio with a high-quality tenant base 5. CitiPark Manchester Arena focused on regional centres, primarily 6. 123 Albion Street Leeds and Manchester. Our portfolio covers a wide range of sectors: 1 1 2 3 Office Space Retail & Leisure Hotels Over 360,000 sq ft of prime office Focused on the more stable Own two hotels in Leeds at the year space, let to long-standing tenants supermarket, discount, and end, one let to and operated by including Leeds City Council. convenience retailing sector. Premier Inn, and one managed by Leisure portfolio includes TCS under the ibis brand. restaurants, coffee shops, gyms and a tenpin bowling facility. Portfolio value Portfolio value Portfolio value 42 5 22% 47% 6% 6 4 5 6 Residential Car Parking Developments Completed our first purpose-built Pioneering technology focused Development portfolio of over 2 private rental sector building car parking operator managing £600m GDV principally comprises in 2019 and have plans to develop car parks in key locations in Leeds, large city centre sites at Piccadilly more residential properties. London, Manchester and Watford. Basin in Manchester and Whitehall Road in Leeds, centred on office and residential opportunities. Portfolio value Portfolio value Portfolio value 6% 7% 10% Read more on page 30 Read more on page 29 3 2 3 Town Centre Securities PLC Annual Report & Accounts 2020 01. Strategic Report Market overview With its 60 year heritage, Long-term relationships with our UK economic growth Flexible working Environmentally friendly TCS has a long history of tenants and active asset management Over the past few years, political and off ice space and sustainable solutions delivering returns over the are key parts of our business model attention has focused on rebalancing Companies have successfully Consumers are increasingly focused longer term. We achieve this and we are working together to the UK economy. While there is transitioned to remote working as on the environmental impact of negotiate solutions to help our tenants by responding to market trends great uncertainty around the short- a result of COVID-19, and many will their activities and are looking manage their cash flow, including term outlook, in the longer term we to build opportunities for the adopt a more balanced approach for environmentally friendly and off ering rent-free periods or deferred expect government initiatives and going forward, nevertheless we expect sustainable options. In the property future, while at the same time payments. Our long-term and flexible investment in long-term infrastructure to see continued demand for high- sector, this includes minimising the managing challenges to the approach will enable us to navigate the projects to lead to greater economic quality off ice space which can also environmental impact of buildings business eff ectively and in current challenging environment and growth outside the South East and provide flexibility of use. We also and developing sustainable and the interests of our broader we are confident in our ability to help the strengthening of major cities in believe that businesses will be seeking energy eff icient solutions, as well as stakeholders. generate future economic growth in the North West and North East, in more of a blend of fixed and flexible considering the health and wellbeing the regions in which we operate. particular Leeds and Manchester. and short-term off ice space, to enable of tenants. From outside space to the Here we identify the key developments them to work in a more eff icient and increased provision of cycle racks and Changing consumer How we are responding which we expect to impact our agile way. Now, more than ever, the introduction of shower facilities, shopping habits 79% of our assets are located in Leeds business now and in the future and business agility is crucial to companies’ changing rooms and lockers as part of and Manchester, including most of set out how we are responding. Changes in consumer spending habits chances of survival and a return to our off ice developments to providing due to the rise in online shopping our landbank and we also have a sustained growth. EV charging points across our car COVID-19 are challenging the retail sector’s long-standing presence in Scotland, parks and in new developments as The COVID-19 pandemic has had a traditional business model of operating where we see continue to see How we are responding the number of electric vehicles in use significant impact on our business, large stores on the high street and opportunities, particularly in Glasgow. Off ice space currently accounts by commuters grows rapidly, we are our tenants and the UK economy with in shopping centres. While town and Leeds is already attracting significant for 20% of our portfolio and our flexing our products to best meet the shops, restaurants, off ices and car city centres began to address falling investment with economic growth of development pipeline comprises demands of consumers and make our parks closed for several months in the footfall by evolving their off ering to 8.3% forecast over the next five years. predominantly off ice and residential buildings a great place to work, spend first half of 2020. Social distancing provide more food and beverage Manchester is the leading professional assets. Our portfolio consists of leisure time and shop. measures and other restrictions are outlets, other experiences and boost and business service centre outside high-quality off ice spaces in city expected to remain in place for some their night time economy, physical of London and Greater Manchester’s centres. The majority of these, How we are responding time to come, changing the way retail sales have continued to fall economy is forecast to grow at a rate including 123 Albion Street and Ducie Across our buildings we integrate that retail and leisure space is both steadily, leading to shop closures and of 14% over the next five years. Local House, are multi-tenanted and we high standards of environmental accessed and used by customers. job losses. The COVID-19 pandemic market knowledge of the regions in redevelop and upgrade these off ices design and target the latest standards has only served to accelerate this trend. which we operate combined with our to provide flexible and functional including BREEAM Excellent and the How we are responding flexible business model and long-term space. At Ducie House tenants can WELL Building Standard in our new COVID-19 has had a material impact How we are responding development portfolio of over £600m take advantage of a variety of lease developments. We have also built on our car parking division in the short In line with our strategy, we are mean we are well-positioned to take structures and our active asset three of our own solar photovoltaic term as people have stayed at home continuing to diversify our portfolio advantage of investment in these management means that occupancy farms in Leeds and Manchester, which and not used their cars. We have to reduce our retail exposure; retail areas by developing high-quality can be flexed to meet the requirements generated over 200,000 kwh of minimised our expenditure during and leisure now accounts for less than assets on a case-by-case basis when of companies as they grow.
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