GCP Student Living New investment opportunity
June 04 2018 - 2:00AM
UK Regulatory
TIDMDIGS
GCP Student Living plc
(the "Company" and together with its subsidiaries, the "Group")
LEI: 2138004J4ID66FK38H25
New investment opportunity
GCP Student Living plc, the UK's first REIT focused on student residential
assets, today announces that it is in advanced negotiations, through its
Investment Manager, Gravis Capital Management Limited (the "Investment
Manager"), to acquire and fund the construction of Scape Brighton, which if
acquired, would be the Company's second asset in Brighton.
The Directors believe that Brighton demonstrates the strong supply-demand
imbalance for student residential accommodation in the UK which is typical of
the localities of the Group's investments, with a shortage of modern,
purpose-built accommodation driven by supply restrictions including high
barriers to entry and strong demand arising from both domestic and
international students. Brighton has a structural shortfall of private direct
let purpose-built student accommodation.
Scape Brighton is a large scale, purpose-built private student development
located on the primary campus of the University of Brighton. Scape Brighton
will provide c.550 beds and extensive communal areas with c.1,500 square feet
of retail space. Subject to the acquisition proceeding, the property will be
constructed and designed to the specifications set by the Company and Scape
Student Living, who will oversee the development and be appointed as the asset
and facilities manager upon completion of construction. The property will
primarily serve students from Brighton University and the University of Sussex,
which together have c.36,000 students including c.7,500 international students,
and is currently expected to be operational in September 2020.
It is intended that Scape Brighton will be acquired and its construction
financed through a forward-funding arrangement. The purchase of assets under
development enables the Company to secure properties located in areas which
benefit from favourable supply and demand characteristics, where appropriate
operational assets may not be available. Further, the acquisition of Scape
Brighton should enable the Company to secure a new asset at a yield which is
expected to be more attractive than yields on acquiring comparable operational
assets and should provide rental and earnings growth for the Company over the
long term, in addition to NAV growth prospects. In the event Scape Brighton is
acquired, the Company expects to benefit from licensing fees which will provide
a c.5.5% coupon through its construction phase.
Accordingly, the Board and Investment Manager are considering the optimum way
to finance this acquisition including consulting with shareholders in regards
to the potential of issuing new equity in June/early July 2018, as well as
exploring potential sources of debt finance.
The Directors (as advised by the Investment Manager) believe that the Company
is well placed to continue to provide rental, earnings and net asset growth
over the short to medium term. This is primarily driven by operational
efficiencies, the current positive outlook for rental growth for the portfolio
and the forecast contribution to returns of those properties which are under
construction (Circus Street and, if acquired, Scape Brighton) or refurbishment
(Scape Bloomsbury). The dividends paid by the Company are expected to be fully
covered by earnings when the Company's entire portfolio is fully operational.
For further information, please contact:
Gravis Capital Management Limited +44 020 3405 8500
Tom Ward
tom.ward@graviscapital.com
Nick Barker
nick.barker@graviscapital.com
Dion Di Miceli
dion.dimiceli@graviscapital.com
Stifel Nicolaus Europe Limited +44 020 7710 7600
Neil Winward neil.winward@stifel.com
Mark Young mark.young@stifel.com
Tom Yeadon tom.yeadon@stifel.com
Buchanan +44 020 7466 5000
Charles Ryland charlesr@buchanan.uk.com
Vicky Watkins victoriaw@buchanan.uk.com
About GCP Student Living plc
The Company was the first student accommodation REIT in the UK, investing in
modern, purpose-built, private student residential accommodation and teaching
facilities. Its investments are located primarily in and around London where
the Investment Manager believes the Company is likely to benefit from supply
and demand imbalances for student residential accommodation.
The Group's property portfolio comprises ten assets with c.3,600 beds which are
either currently fully operational or expected to complete construction/
refurbishment over the next two academic years. At 31 March 2018, its property
portfolio was valued at GBP759.1 million.
The Company's standing properties are mainly occupied by international students
and offer high specification facilities and hotel-level concierge type services
which the Investment Manager believes are attractive to overseas students.
Important Information
The content of this announcement has been prepared by, and is the sole
responsibility of, GCP Student Living plc.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014. Upon the publication of this announcement, this inside
information is now considered to be in the public domain. The information
contained in this announcement is given at the date of its publication (unless
otherwise marked) and is subject to updating, revision and amendment from time
to time. Neither the content of the Company's website nor any website
accessible by hyperlinks to the Company's website is incorporated in, or forms
part of, this announcement.
None of Gravis Capital Management Limited or Stifel Nicolaus Europe Limited, or
any of their respective affiliates, accepts any responsibility or liability
whatsoever for or makes any representation or warranty, express or implied, as
to this announcement, including the truth, accuracy or completeness of the
information in this announcement (or whether any information has been omitted
from the announcement) or for any loss howsoever arising from any use of the
announcement or its contents. Gravis Capital Management Limited and Stifel
Nicolaus Europe Limited, and their respective affiliates, accordingly disclaim
all and any liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of this announcement or its contents or
otherwise arising in connection therewith.
END
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