GCP Student Living Acquisition of asset and borrowing arrangements
05 April 2017 - 10:14PM
UK Regulatory
TIDMDIGS
GCP STUDENT LIVING PLC
(the "Company" or "GCP Student Living", together with its subsidiaries, the "
Group")
Acquisition of asset and borrowing arrangements
Acquisition of Woburn Place, London WC1
The Directors of GCP Student Living, the UK's first REIT focused on student
residential assets, are pleased to announce that, further to the announcement
on 8 March 2017, the Company has now completed the acquisition of Woburn Place,
London WC1.
The acquisition has been funded through a mixture of available cash resources
and the new borrowing arrangements.
Borrowing arrangements
The Company has entered into an agreement with PGIM Real Estate Finance which
is part of the US based financial services group Prudential Financial (NYSE:
PRU). PGIM and the Company have agreed to increase the Company's existing GBP130
million secured debt facility entered into on 25 September 2015 by a further GBP
40 million. The increased GBP170 million facility is repayable on 30 September
2024 and the cost of debt on this loan has been reduced from 3.07% to 3.01%.
The security package remains unchanged.
The Company has further entered into a new GBP65 million facility with PGIM, of
which GBP50 million has been drawn at a fixed cost of debt of 2.82%. The Company
will draw the remaining GBP15 million in September 2017 at the same fixed cost of
debt. The facility is repayable in 2029 and is secured against certain of the
Company's assets.
Accordingly, the Company's banking facilities total GBP235 million, of which GBP220
million is drawn, at a blended cost of borrowing of 2.96% and with an average
weighted maturity of 8.75 years. The loan-to-value of the Group is
approximately 32%.
The new borrowings will primarily be used to fund further investments,
including the acquisition and refurbishment of Woburn Place and, if acquired,
the purchase of Podium, Royal Holloway London, which the Company has
conditionally agreed to acquire and is currently expected to be completed for
the 2017/18 academic year.
Commenting on the acquisition and new borrowings, Robert Peto, Chairman, said:
"We are delighted the Company has been able to secure the acquisition of Woburn
Place which, following refurbishment, will offer c.420 modern beds to students
in the heart of London close to several globally recognised universities
including UCL, Kings College London, the LSE and SOAS.
The Company continues to see new and exciting opportunities in the student
residential accommodation market, with the Investment Manager currently
conducting due diligence on a high quality asset which may meet the Company's
highly selective investment criteria and which is located in a city centre
location in close proximity to a top 20 UK university.
In addition, the Board are pleased to further the Company's relationship with
PGIM. PGIM is a key partner of the Company as its provider of long-term
financing at attractive rates of borrowing."
Commenting on the loans, Bryan McDonnell, a Principal with PGIM's London
office, said:
"We are excited to expand our relationship with one of the leading providers of
student accommodation in the UK. This transaction was a good partnership of
PGIM Real Estate Finance and GCP Student Living, who both see an opportunity to
enhance value in the short term and share a common vision for the long-term
success of the sector in London and beyond."
For further information, please contact:
Gravis Capital Partners LLP +44 20 7518 1490
Tom Ward tom.ward@gcpuk.com
Nick Barker nick.barker@gcpuk.com
Dion Di Miceli dion.dimiceli@gcpuk.com
Stifel Nicolaus Europe Limited +44 20 7710 7600
Neil Winward neil.winward@stifel.com
Mark Young mark.young@stifel.com
Tom Yeadon tom.yeadon@stifel.com
Buchanan +44 20 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 has an estimated total asset value of c.GBP690 million including six
standing assets, providing c.2,000 modern studios and beds, and one
forward-funded development asset which will provide a further c.580 beds on
completion. A further asset, Woburn Place, will provide c.420 beds following
refurbishment.
The Company's standing assets are primarily 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.
END
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