Share Name Share Symbol Market Type Share ISIN Share Description
Empiric Student Property LSE:ESP London Ordinary Share GB00BLWDVR75 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 108.75p 108.75p 109.00p 109.00p 108.50p 109.00p 641,729 16:29:17
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 21.6 28.1 7.3 14.9 654.89

Empiric Student Property Share Discussion Threads

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The management now has a big enough equity base compared to others in the sector. They now need to deliver as they have been lagging far behind others like wjg, digs, unite group etc.
Also less shares to receive the dividend !
Maybe that will curb their expansion plans. Pay a covered dividend and reduced debt then it might be worth investing in again. (Below 107.75p, though!)
Fund raising fell short of its objectives - £110mill v £150mill target.
"UK university applications fall by 4%, Ucas figures show" Http://
Finding it hard to build up any enthusiasm for the open offer.
Also in The Times today, Tempus column rating it a Buy, reason given "expansion will support that attractive dividend yield".
IMO the FT article is a fair assessment of the student accommodation market. I think student accommodation is a safe investment with a reasonable return if you think interest rates will remain low. However, if interest rates rise more than currently expected, or student growth stalls, then there will be significant risks. And the sector is getting crowded, the best profit has already been made. I significantly reduced my holding of ESP earlier this year because I was concerned the company was prioritizing expansion, rather than maximizing dividend cover and NAV growth.
To see the FT article if you are not a subscriber just do a Google search for "Student property fund enrols new investors" "An investment trust that buys student accommodation has announced a new share issuance as yield-hungry investors continue to pile into the asset class. Empiric Student Property, which is the larger of two UK-listed student property funds with total assets of £635m, is aiming to raise £150m. The company plans to invest the cash into providing about 3,500 new beds, including 1,000 in London, following the purchase of a portfolio of sites and properties for about £112m. Investment in purpose-built student accommodation — which Empiric specialises in developing and leasing — hit its second-highest year on record in 2016, according to consultancy EY. Investors have been attracted by the promise of income and capital growth fuelled by a historic undersupply of student accommodation, but critics of the sector fear it could be hit by a harsher post-Brexit immigration policy. According to figures from Unite, the listed student property developer, there are 3.5 students for every purpose-built student bed, with a 60,000 increase in first year students predicted for the academic year beginning in 2017. Shares in Empiric are currently trading on a 5 per cent premium to net asset value, meaning investors are willing to pay more for shares than the value of the underlying assets. The company plans to issue its new shares at a discount of 2.6 per cent to the closing price on June 26. Other companies with exposure to student accommodation have also been sought-after investments in recent years. Shares in GCP Student Living, another investment trust, are trading at a 4.8 per cent premium, while shares in Unite Group, the largest listed developer of student accommodation, have almost trebled over the past five years. Launched in 2014, the Empiric’s current portfolio includes student accommodation in UK university towns ranging from Aberdeen to Southampton, with several new acquisitions in York and Portsmouth. Related article Buy-to-let investors target university cities Rise in student housing owned by private landlords, says report Despite its elevated price tag, Empiric has delivered a share price total return of 9.3 per cent over one year, and 26.2 per cent over three years, according to data from the Association of Investment Companies. Not everyone strikes an upbeat note about the investment prospects for student accommodation, however. Consultancy EY predicted last December that investors are likely to be hit by falling student numbers over the coming decade, while several university cities — including Coventry, Liverpool, Leicester and Durham — were already approaching “saturation point” for purpose-built student blocks. EY said government projections of growth in student numbers after 2013 have been too high, while concerns about the government’s proposed restrictions on student visa numbers remain. It also suggested the growth of apprenticeships would be an attractive alternative for teenagers uncomfortable with the idea of taking on large student debts. The Office for National Statistics also forecasts a decline in the total numbers of 18 and 19-year-olds in the UK, from 1.6m in 2016 to 1.4m in 2021. This article has been amended to clarify that the Empiric share issue will be at a 2.6 per cent discount to the closing price on June 26, not to net asset value.."
FT article on Empiric & student accom prospects.
Jom - OK. I presume the directors are also shareholders so on the one hand they are getting higher dividends, but on the other hand the dividend policy depletes NAV and hence their pay. The former is more lightly taxed though. I'm sure they've done the math.
The Value Delivery Plan is explained in the 5 Dec 16 document (it is in the company docs archive on the web page. It has a date of 9 January 2017 against the downloadable copy). I'm not inferring that they would directly take a slice of the £150m but part of the remuneration package is based on 'Shareholder Value' creation and NAV growth. NAV growth is adjusted for fundraising but ultimately the larger the assets become, the more 'Shareholder Value' can be created. I was a shareholder but was discouraged by the focus on expansion ahead of paying a sustainable dividend. Whether or not this is driven by potential remuneration is a subjective view. I still look at ESP from time to time and I am interested to see how the unadjusted EPRA NAV and earnings evolve.
Jomb - why would it affect directors' remuneration? Best practice is that any benefits are adjusted for new issues. I'm not a shareholder, but would check the terms before asserting anything. You are right about dividends. Their policy isn't consistent with health in a downturn for their assets.
Another fundraising - should help the directors renumeration! A 6.1p uncovered dividend is targeted. Did I say uncovered? Sorry, I meant 'substantially covered by Adjusted EPRA Earnings per Share for 2017 and going forward'
I have sold, may buy back once the cladding issue is resolved / clarified. Agree that the company should be pro-active and confirm the situation as Unite have done.
The Company should issue a circular stating that cladding on its student properties does not support combustion and that other safety issues have been dealt with. The share price will come under pressure if cash has to be found to cover safety issues and how much?
Does anyone know if sprinkler systems are installed in ESP's student accommodation. I have tried to access the company website, but it isn't responding?
Trading Statement Highlights · Unaudited basic eNAV per ordinary share as at 30 April 2017 is 107.75 pence compared to basic NAV per ordinary share of 105.9 pence as at 31 December 2016 (prior to adjusting for the dividends of 1.525 pence and 1.55 pence per share, respectively) · The Board is targeting a dividend of 6.1 pence per ordinary share for the year to 31 December 2017. It is anticipated the dividend will be substantially covered by adjusted EPRA earnings per share for 2017 and going forward1 · The Company's property portfolio has been independently valued by CBRE Ltd as at 30 April 2017 at £786.7 million (including forward funded commitments) (31 December 2016: £721.3 million), as confirmed in their valuation report dated 5 June 2017 for the purposes of this announcement · 81 assets (7,579 beds) expected to be operational for the 2017/18 academic year · The Group is targeting an annual rental uplift for the 2017/18 academic year of approximately 2.8%, with a gross annualised rent roll (including commercial) of approximately £63.6 million (31 December 2016: £52.1 million) · Excluding the benefit of developer rental guarantees, letting for the operating property portfolio is progressing ahead of this time last year · Significant progress with the transfer of assets onto the Hello Student® operating platform · Net operating margin has returned to historical levels of c. 70% · The Company is in advanced discussions in respect of a substantial new revolving credit facility · Strong near-term pipeline of attractive investment assets comprising a mix of operating and development properties representing, in aggregate, over 2,900 beds, including a significant London based portfolio of operating assets. more.....
Interims 10 April 2017: ''Dividends paid in respect of the six months to 31 December 2016 of 3.05p per share, targeting 6.1p per share for the 12 months to 30 June 2017'' But, as far as I know, no div dates given. pete
The dividend has not actually been declared yet...
Does anyone know when this goes xdiv? I cannot find any date in the april interims. pete
On 29.11.15 IC Bearbull compared ESP, PHP and PCTN SP 110 111 70 Yield 5.5 4.6 4.6 NAV 103 85 73 Unexpired Terms Avge na 15.1 6.2 SP today 110 114 85 BB went for the yield, but the clear winner has been PCTN. I hold all three, but think that with director gred I will switch ESP to more PCTN, which has been a solid performer over many years.
Similiarly underwhelmed by share price progress, and by concerns aired on here. Recently sold all my placing/open offer shares but kept the rest within the confines of the ISA. Only the yield and sector diversification are the draws.
It's a job to know, isn't it ? That's where bulletin boards come in handy : as forums for discussing the why's & wherefore's. Nice post Jombaston. Thanks. I'm a holder here, but I don't honestly know why.
You are quite right, risk. Lets face it this company IPO'd in June 2014 and had only managed to grow the NAV to 105.9 per share some 2 1/2 years later by Dec 2016. How would they have managed if the student market hadn't been booming over this period? I have been seriously underwhelmed. I'm not sure the share price really deserves a premium to NAV. I know they have been using capital to pay uncovered dividends but I suspect advisors, developers, agents, directors and others have been the real beneficiaries of their expansion over this period. Maybe shareholders will benefit in the future if they temper their ambitions but maybe they won't.
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