New investment – Town Centre Securities

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New investment – Town Centre Securities

This is a stock I have followed for some time. Majority owned by the Ziff family, who have stewarded the business through thick and thin, Town Centre Securities (LON:TOWN) is a real estate investment trust (REIT) with a long pedigree. The trust operates primarily in Leeds and Manchester, both of which are undergoing robust levels of growth currently, and where the management has significant local nous. 

As well as owning some iconic properties in Leeds and Manchester, the company also has a car park operation (CitiPark), which offers some diversification and an attractive and growing income stream to boot. The property portfolio has a tilt towards the retail sector (which is probably why the shares are trading on such a large discount), but management are taking steps to reposition the portfolio towards non-retail where it has a pipeline of significant development opportunities. 

Source: Town Centre Securities, Results Presentation 2019

Town centre retail is far from the flavour of the month right now, which means the shares are unloved. I picked the shares up on a c.40% discount to NAV (see chart above) and a 5.9% dividend yield, which consider to be great value for a company that has grown or maintained its dividend for 59 years in a row! Given that the management knows its main areas of operation intimately, I am not concerned by the retail exposure and there is talk of management exploring ways to narrow the discount, which could include buybacks. 

A good quality asset at an enticing, with a generous income.

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