Town Centre Securities, the Leeds based property and development company, has been hit by a 7% fall in net asset value after writing down its property portfolio by 15.7% to £450m.

It today revealed a fall in its net asset value from 451p to 420p.

Its property portfolio was written down by £75.3m. It said the deficit is an ‘unrealised accounting item’ and that its overall impact has been offset by an exceptional deferred tax credit from its conversion to a REIT of £56.2m.

In a statement it said: ‘In spite of the challenging times, we remain focused on investing in property with secure and growing income in good and improving locations. Two years ago, we took a decision not to buy into new property investment situations and to focus resources on our existing portfolio and adjoining properties.’

It said it will continue to focus on development with its major projects including The Merrion Centre in Leeds; Deansgate in Manchester and West Park, Harrogate as well as its long term project in joint venture with Hammerson at Eastgate Quarters in Leeds.

Chairman and chief executive Edward Ziff, said: ‘Whilst I remain optimistic for the continued long-term success of our business, we are facing very challenging times. Property values continue to fall and I believe it will be later in 2009, at the earliest, before prices stabilise. We are also wary of the potential impact of tenancy failures.

'In recent years we have resisted acquiring assets in a market where pricing had been too aggressive to generate adequate returns. As a result TCS is in a strong position. We continue to look selectively at opportunities to sell assets that do not fit our long term strategy.’

It said its funding is well secured with bank financing secured with renewal of 5 year term loan facilities.

It said: 'We have mitigated exposure to current market conditions through the early renewal of five-year term loan facilities with our banking partners Lloyds TSB and Royal Bank of Scotland until 2012 and 2013 respectively.

'These amount to £102m, of which we were utilising £58m at the year end. Our £150m mortgage debenture is fixed until 2031 at 5.375% and we have fixed £40m of our debt at 6.44% until October 2009.'