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Questor share tip: Town Centre Securities a long term buy

The commercial property fund based in the north of England is enjoying a recovery in prices, says Questor.

Coins
Savers putting £10,000 into the account will earn £387.69 over the two years, after tax Credit: Photo: ALAMY

Town Centre Securities
306.4p
Questor says BUY

LEEDS based property investment fund Town Centre Securities [LON:TCSC] has expanded its portfolio and secured key tenants making its shares a good long term investment.

The company said last week that it spent £4.48m on new warehouses with secured tenants that provide a net initial yield of 7.25pc. In a low interest environment that kind of return is attractive.

The company has also recently renewed a contract until 2040 with its anchor tenant Morrisons’ at its biggest property holding the Merrion Centre in Leeds city centre. Morrisons’ will be investing to refurbish and expand the existing store on the the site.

The early refurbishment works have also started on Merrion House after Leeds City Council signed a 25 year lease for office space.

Pre-tax profits increased to £13.3m for the six months ended December 31, from £12.3m in the comparable period.

The net assets per share increased to 326p at the end of last year, leaving the shares trading at a 6pc discount.

Town Centre Securities property portfolio is split, with 58pc in Leeds, 24pc in Glasgow and Edinburgh, and 16pc in Manchester. The company also has a small presence in London.

The company offers a prospective dividend yield of 3.4pc. Questor recommended buying the shares (232.5p, February 13, 2013) and they have risen 32pc since then, the advice remains. Buy.