Business
Agreement reached to re-finance Merrion House
Agreement reached to re-finance Merrion House.
About this update from Town Centre Securities Plc
[{"type":"text","content":"\n \nRNS Number : 4255V Town Centre Securities PLC 23 July 2018 \n\n23 July 2018\n \nThe following amendment has been made to the 'Agreement reached to re-finance Merrion House, Leeds' announcement released on 23 July at 7am under RNS No 3600V.\nThe following sentence has been amended: \"As a result, TCS will receive £26.4 million in cash on 2nd July 2018.\" \nThe sentence now reads: \"As a result, TCS will receive £26.4 million in cash on the 24th July 2018.\"\nAll other details remain unchanged.\nThe full amended text is shown below.\n \n \nTown Centre Securities PLC\n(The 'Group' or the 'Company')\n \nAgreement reached to re-finance Merrion House, Leeds\n \nFurther to the earlier announcement on 6 July 2018, Town Centre Securities (TCS), the Leeds based property investor and car park operator, is pleased to announce that it has finalised discussions with Leeds City Council (LCC) in relation to a re-financing of Merrion House in Leeds.\n \nOn 6th February 2018, the Company announced practical completion of its Merrion House redevelopment. The 170,000 sq ft, ten-storey building is jointly owned by TCS and LCC, with LCC occupying the building on a new 25-year lease.\n \nMerrion House is jointly and equally owned by TCS and LCC in Merrion House Limited Liability Partnership (MH LLP). MH LLP has reached agreement for LCC to advance all base rent due from 1st October 2018 until the lease end on 11th February 2043, discounted at an annual equivalent rate of 3.5% plus costs.\nAs a result, TCS will receive £26.4 million in cash on the 24th July 2018. This is net of estimated costs. From an accounting perspective this transaction will be treated as a financing arrangement within MH LLP. On that basis MH LLP will continue to recognise quarterly rent (£0.8 million per quarter) offset by an interest charge calculated on an effective interest rate basis. TCS 50% share of the accounting net income will continue to be recognised in its income statement.\nThe balance sheet of the LLP will reflect the full market value of the building, less the deferred income balance, which will reduce quarterly to zero at the lease end. Half of the net asset value of the entity is then consolidated into TCS.\nThe lease allows for capped RPI increases every five years. These will continue to apply and will fl...