TCS is bullish about prospects for the proposed development in Whitehall Riverside, which is undergoing a renaissance as a place to work.
In the year ended June 30 2015, the property investment and car parking company recorded an underlying profit before tax of £6.5m, compared with £7.6m the year before, while net assets per share rose by 11.7 per cent to 344p.
TCS said it had made good progress with its enhancements to the Merrion Centre in Leeds. Earlier this year, it was revealed that Marco Pierre White was set to make a return to his home city with the launch of a new restaurant bearing his name.
The celebrity chef’s New York Italian restaurant is due to open in the Merrion Centre in December next year. In a statement to accompany the results, TCS said: “The Merrion Centre Hotel is currently vacant and we have now signed management contracts and franchise agreements with Ibis Styles and Marco Pierre White restaurants to create a 134 bed hotel and 4,000 sq ft restaurant. The estimated build cost is £7.5m and is expected to generate an initial profit of £600,000 rising to £1m over five years. The start on site will be Autumn 2015, subject to finalising the detailed planning permission.”
TCS said that this provided an excellent return on the investment for space that has been vacant for over two years. TCS also said that the Merrion House redevelopment had entered the contractual stage - the property was transferred into a 50/50 joint venture with Leeds City Council in May 2015. With regards to Whitehall Riverside, TCS said the area was rapidly becoming the prime office location in Leeds, with three substantial speculative office buildings being built on the sites near Whitehall Riverside.
The statement added: “There is an established demand for grade A space at £28 psf, and we are currently marketing for pre-let on our site a 170,000 sq ft office building..we are also in detailed negotiations regarding a 128 bedroom hotel. The master plan also includes a 500 space multi-storey car park along with a further 150,000 sq ft of offices.”
Edward Ziff, the chairman and chief executive, said: “Retail valuations have continued to rise in the regions and we expect this to continue as the economic backdrop continues to improve.
“The letting market remains competitive but we continue to find opportunities to increase income in all areas of our portfolio and over the next couple of years our income will benefit from the transactions we have already concluded. This is particularly so in the Merrion Centre where the Merrion House deal is now underway. We intend to increase portfolio sales and purchase activity this year.”
Mr Ziff said it was crucial that Leeds fought its corner in the debate over the proposed HS2 high speed rail line between Yorkshire and London. He said that Roger Marsh, the chairman of the Leeds City Region Enterprise Partnership, and his team were doing a good job in promoting the region.
TCS plans to continue with its car park acquisitions programme “as we have already seen this contributing positively to our profits”, according to Edward Ziff, the company’s chairman and chief executive.
The company added five new branches to its Citipark car parking portfolio, increasing total spaces by 81 per cent to 5,200. Over the period, the company completed the redevelopment of Albion Place, in Leeds, replacing Austin Reed with a Sainsbury’s store.
TCS said its property on Vicar Lane, Leeds, has received a boost from its proximity to the new Victoria Gate development, which includes a John Lewis.