TIDMDIGS
RNS Number : 4433C
GCP Student Living PLC
21 June 2021
This announcement amends and replaces the "NAV, Portfolio Update
and Dividend" announcement made by the Company at 7.00am on 12 May
2021 under RNS Number: 2881Y.
The only information in this announcement which has changed is
the payment date for the third interim dividend which will now be 9
July 2021, rather than 25 June 2021 as previously announced.
All the other details remain unchanged.
GCP Student Living plc
("GCP Student" or the "Company", together with its subsidiaries
the "Group")
LEI: 2138004J4ID66FK38H25
NAV, portfolio update and dividend
GCP Student, the only UK REIT focused on modern, purpose-built
private student accommodation in and around London, today announces
its EPRA Net Tangible Assets (NTA) per ordinary share, portfolio
update and dividend in respect of the quarter ended 31 March
2021.
David Hunter, Chairman:
"The portfolio experienced a strong NAV performance this quarter
driven primarily by strengthening investment markets for student
accommodation with a high number of transactions, including in
London, being completed.
Additionally, the trend observed over the past few years of
increasing polarisation in the higher education market, with
students typically favouring higher quality universities, appears
to have accelerated through the pandemic creating a positive
backdrop for our portfolio focussed on London and the South East.
By way of example, over half of the Group's direct let bookings for
the current academic year were by students attending five
universities which experienced on average 13% growth in acceptances
in September 2020, compared to a national average of 5%.
There are encouraging signs for the next academic year with
total UCAS applications up 8% nationally and strong growth in
applications from domestic, mature and non-EU international
students alike. Whilst applications from EU students have declined
in the immediate aftermath of Brexit, it remains difficult to
assess whether this represents a longer term trend. Approximately
13% of the Group's direct let portfolio was occupied by EU students
pre-pandemic.
The Directors continue to believe in the relative attraction of
the UK to international students. This is supported by the latest
QS's annual UK International Student Survey results, published on
14 April, in which nearly half of students surveyed placed the UK
ahead of the US, Canada, Australia and Germany as a direct result
of the successful vaccination programme."
Net Asset Value
The Company's EPRA Net Tangible Assets (NTA) per ordinary share
at 31 March 2021 is set out below:
At 31 March At 31 December % quarterly
2021 2020 change
EPRA NTA (cum-income) 179.07 pence 171.38 pence 4.5%
-------------- ---------------- ------------
EPRA NTA (ex-income) 178.82 pence 171.13 pence 4.5%
-------------- ---------------- ------------
Portfolio and management update
Valuation
At 31 March 2021, the valuation of the Company's portfolio was
GBP1.06 billion.
At that date the portfolio comprised eleven operational assets
with c.4,100 beds. Approximately 80% by value of the Group's
portfolio is located in and around London. The valuation Net
Initial Yield on the operational portfolio was 4.44%.
The demonstrable attraction of London for investors in private
student residential accommodation is evidenced by increased
activity in investment markets during the period. Investment
volumes in UK PBSA exceeded GBP1.6 billion in Q1 2021, including
c.GBP300 million across five assets transacted in and around London
at yields estimated to be between 3.90% and 4.15%.
The sector has also benefited from increasingly positive news
flow regarding the Covid-19 vaccine rollout which has given cause
for optimism for a gradual easing of restrictions on mobility,
including for international travel. Further, there is clear
evidence of strong application trends for UK universities from both
domestic and international students alike. As the country navigates
out of lockdown the Company's portfolio of modern high quality
assets in prime locations which have historically benefited from
strong supply and demand imbalances looks to be well placed to
benefit from a return to more normal trading conditions.
The combination of strengthening investment markets and an
improving environment for students has led to a like for like
increase in the valuation of the Group's portfolio of 3.5% from the
previous quarter. The Group's property portfolio is externally
valued by Knight Frank LLP.
The valuation continues to include a temporary adjustment to the
assumed level of income generated by the portfolio as a result of
Covid-19. This adjustment has reduced the capital value of the
portfolio by GBP 25.4m (5.6 pence per share). As the Covid-19
vaccination roll-out progresses in the UK and abroad, market
expectations for occupancy rates in prime student accommodation
assets are increasing which in due course should result in the
potential lifting of Covid-19 related income deductions.
Bookings and market update
-- The Group's buildings remain operational with the Directors
and Investment Manager remaining focused on ensuring the wellbeing
of residents and staff by providing a safe and secure environment
in-line with government regulations.
-- B ookings across the portfolio for the 2020/21 academic year
have remained at 68%. Approximately 71% of booked rooms are
currently occupied and/or subject to nominations agreements,
showing a slight improvement in physical occupancy to the 64%
reported in March 2021.
-- The Company's academic year runs for a period of 51 weeks
from mid-September. It receives direct let income in three tranches
for each academic year; c.40% in each of September and January and
the remaining c.20% in April. Approximately 91% of the direct let
rents due on bookings and 86% of total rents due for the 2020/21
academic year have been collected.
-- Based on the current level of contracted occupancy, reduced
rental rates on direct lets and the Investment Manager's
assumptions in relation to nominations agreements and long term
leases across the Group's portfolio, the Company continues to
anticipate it will collect between 55% and 60% of budgeted total
income of GBP60.1 million for the 2020/21 academic year.
- Bookings for the 2021/22 academic year are currently at 26%.
The Company notes the relaxation of restrictions in the UK and the
clarification of travel rules, and anticipates the 2021/22 booking
season being condensed and back-ended. Prior to the pandemic the
Company's experience was that the majority of bookings were made
between June and October.
Cash and available debt facilities
-- At 31 March 2021 the Company had cash resources of c.GBP45.8
million and a redrawable credit facility of which c.GBP12 million
was available to be drawn at that date. The Company's current
capital commitments, including in respect of the construction costs
at Circus Street, are approximately GBP4m and will be funded
through the Company's available cash resources.
-- The Group's borrowings have an average weighted maturity on
its drawn debt of approximately four years from the date of this
announcement. The Group's Loan to Value ("LTV"), calculated as
borrowings net of cash as a proportion of the Group's total
portfolio value, was 23% at 31 March 2021.
During the pandemic, the Company's focus has been to preserve
liquidity whilst there has been an impact on income and uncertainty
in relation to the return of its residents. It has done so through
holding a significant level of cash and maintaining prudent
borrowing levels.
Dividend
Noting the impact on the Company's revenues and the ongoing
uncertainties relating to the Covid-19 pandemic, and a desire to
manage the business in a prudent and conservative manner, the
Directors have decided to announce a third interim dividend of 0.25
pence per ordinary share in respect of the quarter ended 31 March
2021.
The quantum of the dividend will be reviewed on a quarterly
basis with a view to increasing the quarterly payment when there is
greater visibility on the Company's revenue prospects. The
Directors expect the Company will increase dividend payments to its
shareholders as Group revenues improve through growing occupancy
levels.
The dividend will be paid on 9 July 2021 to ordinary
shareholders on the register at 21 May 2021. The dividend will be
paid as 0.25 pence per ordinary share as a REIT property income
distribution ("PID") in respect of the Group's tax-exempt property
rental business. No element of the dividend will be paid as an
ordinary UK dividend ("non-PID").
Additional information on the Company's portfolio can be found
in the factsheet for the period ended 31 March 2021, which will be
published shortly and will be available at:
www.gcpstudent.com/literature
For further information please contact:
Gravis Capital Management Limited +44 020 3405 8500
Nick Barker
Joe McDonagh
Jefferies International Limited +44 020 7029 8000
Neil Winward
Stuart Klein
Tom Yeadon
Buchanan / Quill +44 020 7466 5000
Helen Tarbet
Henry Wilson
About GCP Student
The Company is t he only UK REIT focused on modern,
purpose-built private student accommodation in and around London
.
Its investments are located where the Investment Manager
believes the Company is likely to benefit from supply and demand
imbalances for student residential accommodation. GCP Student's
property portfolio comprises eleven operational assets with c.4,100
beds. At 31 March 2021, its property portfolio was valued at
GBP1.06 billion.
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