Equity Analysis /
United Kingdom

GB : Town Centre Securities - Diversified regional specialist

    Chris Spearing
    Chris Spearing

    Analyst - Real Estate

    Hugh Carrow
    Tom Musson
    28 March 2022
    Published byCGS-CIMB

    Town Centre Securities’ interim results were ahead of our expectations, showing us its ‘bounce-back’ year is well underway. We now expect growth again: +7.5% average total accounting returns over FY22-24E. LTV is reducing, (<50% pro forma), and substituting assets for cash in the debenture should unlock restricted cash to reduce LTV further near-term. Management is actively looking for ways to bring the pipeline forward, a key driver of future value. Risks lie in an economic slowdown if inflation persists, but TCS’ diversified portfolio has shown to be resilient. At 160p the shares price in a 24% decline in property values from here, which looks too steep. TP 210p based on EVA.