Empiric Student Property Share Discussion Threads

[speedsgh] 14/3/2016 14:08

Agreed. Birkin of no interest to me. Purpose of my post 236 was to highlight how the sub-sector is getting crowded which is often not a positive development (pun not intended).

[jonwig] 14/3/2016 13:57

Yes, I don't see how Birkin can have a usp to make it a worthwhile alternative. And a buyer at IPO will be paying a premium to NAV by absorbing the costs. Market getting crowded?

[clausentum] 14/3/2016 13:44

I see nothing in the limited information on Birkin Student Homes that would attract me to invest there rather than buy more shares in Empiric, but W-J definitely looks interesting.

[speedsgh] 14/3/2016 13:07

Another one in the student accommodation sub-sector that is looking to list...

Birkin Student Homes. REIT investing in private student accommodation sector in the UK -

[ceaserxzy] 13/3/2016 08:03

Thanks Jonwig for the information. The numbers indeed look good.

[jonwig] 13/3/2016 07:48

Clausentum - will be interesting to read what W-J have to say about the construction side of student accommodation. Also, as a builder, are they essentially debt free and what's their record on cost overruns?

ceaserxyz - latest debt (Canada Life) was fixed at 3.52%. Other debt is floating (to LIBOR). Net yields are now around 6.1%. In thew 2015 results, financing costs were £1.2m and net profit was £14.2m. All healthy enough.

[ceaserxzy] 12/3/2016 21:47

in its recent interim results, it says" The strong backing of our lenders RBS, Canada Life and Santander, at competitive rates, confirms the strength of our offering."

Does anyone know what is the cost of debts from these banks? How does it compare to the net income? Does ROC cover or exceed the cost of debt?

[mysteronz] 12/3/2016 21:09

After they hit the 10k target - what do yiu think the end game is? Continue or takeout?

Going to take up my entitlement on Monday

[clausentum] 12/3/2016 11:58

Jonwig:
Thanks for interesting note about Watkin Jones. It's a more diversified approach to a student accommodation investment, could it be expanding too fast at the moment? IMO it will be more risky than ESP if the market hits troubled waters, but I will be looking out for further IPO details.

[jonwig] 12/3/2016 08:49

Watkin Jones, a Welsh construction group specialising in student accommodation, plans to raise at least £100m in a flotation this month on London’s junior market.

The planned initial public offering comes as investors are increasingly buying into student accommodation and deploying cash to build apartment blocks for private rental by individuals and families — an area into which Watkin Jones hopes to expand.


The Bangor-based company expects to have a market capitalisation of about £255m after it joins Aim on March 23.

Purpose-built student accommodation has attracted a number of big international investors aiming to capitalise on rising UK student numbers: an arm of Singapore’s Temasek became the latest to enter the market with the purchase of a £417m portfolio this week.



So there will be pressure on asset prices, which will strengthen ESP's NAV but also make new investments more expensive. The same is happening with PPI infrastructure projects, where the demand is very crowded.

Watkin Jones could be a useful investment if the price is right (of course!) - it's not a public offer.

[davr0s] 11/3/2016 19:59

Sure - I just ask myself the question on Monday morning do I gain that much by taking up the option. I hold a fair few of these already and so do want to go much higher. At the moment I am inclined take them up

[ashbox] 11/3/2016 12:07

re 221 - share price also dropped yesterday due to xd 1.5p

[speedsgh] 11/3/2016 11:57

By the way, the prospectus is well worth a read. Loads of v detailed info in there, including a breakdown of the portfolio property-by-property giving current valuations, rent ranges + a brief decription under each (starts pg57 of pdf). Interests of Directors + Major Shareholders (pg144 of pdf).

[davr0s] 11/3/2016 11:31

Mines Monday lunchtime (hl) -seemed little point until that morning making decision. Probably will but it's not a big deal

[ih_552354] 11/3/2016 11:11

Thanks speedsgh and jonwig. My broker cut off date was the 10th.

[jonwig] 11/3/2016 10:25

Individual brokers have their own deadline dates - mine was 8 March!

[speedsgh] 11/3/2016 10:09

nimbo - below is taken from the prospectus for the share issuance programme -

INITIAL OPEN OFFER
Latest time and date for receipt of completed Open Offer Application Forms and payment in full under the Initial Open Offer or settlement of relevant CREST instructions (as appropriate) - 11.00a.m. on 16 March 2016

INITIAL PLACING & INITIAL OFFER FOR SUBSCRIPTION
Latest time and date for receipt of completed Application Forms and payment in full under the Initial Offer of Subscription - 11.00 a.m. on 16 March 2016

[nimbo1] 11/3/2016 09:53

Hasn't the offer take up date passed? I thought it was yest

[davr0s] 11/3/2016 08:33

If it goes any lower there will be no benefit taking up the offer..

[jonwig] 10/3/2016 08:55

Every little helps:

David Cameron wants to break open the closed shop in higher education by making it easier for new providers to become universities, in an attempt to widen choice and improve social mobility.

[nimbo1] 05/3/2016 12:02

IC View

ESP) floated on the London Stock Exchange in June 2014, and its progress since then has been little short of meteoric. Gross annualised income rose threefold to £25.1m in the six months to December 2015, and with the announcement of the second quarterly dividend it's well on the way to paying out a targeted 6p a share for the full year.

Providing purpose-built accommodation for students, Empiric acquired a further 2,165 beds, bringing the total to 5,686 either operating or under development across 26 cities, with only a minor exposure to the expensive London market. At the time of the IPO, the target was to build a portfolio of 10,000 beds within five years, but the company expects to achieve that well ahead of time.

To help finance the expansion programme, Empiric completed the final two tranches of a 300m share issuance launched in October 2014, raising £161m, while a further 165m issue at 107.5p a share is taking place this month, and is expected to raise around £90m. Prior to this, analysts are not making any firm net asset value forecasts. A new £40m debt facility has also been secured, and the current loan-to-value ratio of 20.3 per cent is expected to rise to a targeted 35 per cent in the near term.

EMPIRIC STUDENT PROPERTY (ESP)
ORD PRICE: 109.75p MARKET VALUE: £423m
TOUCH: 109.25-109.75p 12-MONTH HIGH: 114p LOW: 102p
DIVIDEND YIELD: 4.6% DEVELOPMENT PROPERTIES: nil
PREMIUM TO NAV: 5% NET CASH: £45.9m
INVESTMENT PROPERTIES: £357m
Half-year to 31 Dec Net asset value (p) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)*
2014 99 3.2 3.3 2
2015 105 14.0 4.4 3
% change +6 +333 +33 +50
Ex-div: 10 Mar

Payment: 23 Mar

*Dividends paid quarterly. Second interim 1.5p.

IC VIEW:
Empiric's acquisitions centre on 50-200 beds at a time; that's too big for regional developers, but too small for larger institutional buyers. The shares are little changed from our buy tip (110p, 5 Nov 2015), but given the growth profile, modest gearing and attractive dividend, we're still buyers.

[nimbo1] 04/3/2016 08:11

That is great news and good timing on the index - forced buyers. Suddenly the cap raise looks good value.

[le4r] 03/3/2016 18:19

Presumably GBP weakness for the near-mid term can only help too if more foreign than domestic students...

[ih_552354] 03/3/2016 15:05

Ill take up the allocation too. The point from the broker ref the macro background to the UK... from the prospectus a higher % of the students are from abroad than from the UK...so I would think it unlikely room occupation will be affected by much going on in the wider economy as long as the uni courses remain attractive for post grad students. Of course NAV may get hit if property crashes but interest rate rises seem unlikely at the mo imo.

[scottishfield] 03/3/2016 11:49

Yes, worth the entitlement imo.