Empiric Student Property Share Discussion Threads

[maddox] 20/5/2020 22:17

The latest twist is that the new student intake are finding the prospect of online lectures so unappealing that they are thinking of deferring for a year. If this is accurate I think this will cause a rethink. Cambridge might still fill all its places but other Unis will struggle. This on top of a potential dearth of foreign students will be a double whammy to their finances.

I can corroborate this news story as my son is in the cohort destined for Uni in September.

Regards Maddox

[okosling] 20/5/2020 15:29

I agree - the students want a full campus experience and the universities probably want that also. University teaching comprises lectures which may be in big lecture theatres to 100 or more students and also smaller classes or tutorials in small groups. The BBC report only talks about lectures being online. It would be difficult to do those with social distancing, but the small classes could easily be held with social distancing, so students could continue to have the full campus experience, with only the big lectures being held online. The kind of accommodation provided by Empiric is ideally suited to a world of social distancing.

The scale of the discount to the last net asset value is becoming almost as big as for REITs who own retail property, where there was already a long-term trend in place, moving away from bricks-and-mortar retailing to more online selling, now accelerated by the coronavirus situation. Empiric is not like that at all, where at worst it's a temporary loss of rental income, and there's no doubt that some subjects, such as science and medicine, will take place on campus as usual.

[maddox] 20/5/2020 11:13

It's not just for the lectures students go away to university - are none of you watch 'Normal People'?

[chucko1] 20/5/2020 11:13

In any event, one term, or one year of impaired rents do not equal a share price drop from 97p to 57p. At this price, I don’t care an awful lot about variations in short term outcome.

Half the students go to university to drink, play sport, act, and have other assorted fun. Not easy to do on line.

[its the oxman] 20/5/2020 11:03

Just cant see students or lecturers seeing open university type degrees for everyone as a desirable experience. Plus it will surely mean a big cut to uni fees. Yes more hybrid learning especially this year but the learning and research ability will not be the same. Mind you my daughter is doing medicine so she definitely needs to go back.

[brwo349] 20/5/2020 10:38

lol. Where's the negative? If all courses can be online only then tutorials can surely be online only as well. You can do video chat easily through skype. Surely the only students who need to be actually on the campus would be the people who work in labs.

[okosling] 20/5/2020 10:03

I assume that story about Cambridge University is the reason why the share price is down today. However, I question whether it's really negative news at all: if lectures are online only but the tutorials continue in small face-to-face groups as before (but with social distancing), it remains an on-campus degree, just without the big lecture hall parts, and the need for student accommodation would continue as before. In fact, if premium accommodation offers better social distancing, it may be more in demand than before, also for domestic students. So where's the negative?

[brwo349] 20/5/2020 08:45

Cambridge University: All lectures to be online-only until summer of 2021


Does not bode well for student accomodation next year.

[its the oxman] 19/5/2020 22:24

Given where its traded the last three years. Got to be exceptional value now at 60p.

[chucko1] 06/5/2020 16:07

Oh, that a relief then. Do they really still care about me? Odd.

[spectoacc] 06/5/2020 15:59

Lol - suspect that's the multi-handled "Woodford chum"!

[chucko1] 06/5/2020 15:56

@Specto, if you like what I say, why do you keep downticking me? Come on, pull yourself together.

LOL!!

[spectoacc] 06/5/2020 15:38

Seems a fair analysis @chucko1 - too many others to buy for me atm :)

[chucko1] 06/5/2020 09:44

I have based my views on a bad 20/21 with some rent forbearance (not yet asked for, but will be), but even then, as stevegrass just stated, the layout and quality of properties lend themselves easily to protracted distancing. I am still assuming the world regards UK education as a quality product, and that students not taking up their places will be fairly low at the quality universities (which are generally the ones ESP cater for).

On that basis, I do not see any major stress on the finances and so, at the current sp, there’s a fair degree of skew to the upside. As ever, this is one to be patient with and history shows that an absence of patience with ESP is not a winning strategy!! When it recovers, it’s not generally in a hurry, but if we assume a dividend cut to 4p the next 2 years (assuming a further delay) and a recovery to 80p, that’s around a 45% return, or 20% annualised.

I sold in the 90s and have bought in the 60s (price, not decade). This is not the most difficult one to read (and has been gifted overreaction the past three years, so a good one to trade) and so the recovery seems higher quality than many others albeit slightly smaller in upside.

[stevegrass777] 06/5/2020 09:00

Very pleased with the update this morning, only 12% down current academic year and bookings coming in stronger than I expected for next academic year.
Costs are well under control, and plenty of students keep living in the property, also 85% en suite and self contained, and very few lifts!
I always new ESP had better spec accommodation but this could mean higher demand for this type of accommodation!
Well positioned for the rebound, once details are known about the lock down reversal ESP should have a bit of a come back! Imo

[spectoacc] 06/5/2020 08:51

Not a fan nor a holder - I think Covid set to run well past September - but seemed a balanced & fair update this morning, with some positives.

[okosling] 03/5/2020 14:44

Story on the front page of today's Sunday Times: "Arts students will be last to go back to university". Apparently there are contingency plans for students of medicine and science subjects with practical classes to return as usual for the autumn term, but arts and humanities students to carry on at home with virtual seminars and tutorials, possibly until as long as January. Personally, I don't think that will happen, but we'll see.

[spectoacc] 01/5/2020 09:43

DIGS interesting this morning, including:

"In the event that the disruption caused by the Covid-19 pandemic continues into the 2020/21 academic year, the Company's rental income will be adversely impacted. The scale of this impact will depend on measures taken by global authorities, including the UK government, the approach taken by higher education institutions as regards in-person learning and how the situation develops and over what timescale. The Directors continue to keep wider events and the Company's operations under review in respect of any future dividends which may be declared by it."


Not a DIGS (or ESP) holder, but they've 4.9% of income coming from WeWork - not sure that's what shareholders would expect?:

"
· Scape Shoreditch has a long-term occupational lease to a WeWork subsidiary, which is part-guaranteed by its US parent company WeWork Companies Inc. This lease comprises approximately 4.9% of the Group's annual budgeted income. "


An interesting read anyway - seems very open.

[rob the slob] 24/4/2020 09:05

Global recession and higher unemployment is likely to encourage more school leavers at home and abroad to consider further education to get qualifications and defer trying to enter the job market.

[stevegrass777] 24/4/2020 08:25

Looks like a good refinancing package with improved rates, wasn't expecting that. But to get a better deal means that this group must be thought of as in a strong position financially and strategically a defensive business.
Good news.

[spangle93] 24/4/2020 07:56

I feel people will be compelled to carry on with education, its not like going to the pub or cinama


From what I remember, albeit many years ago, they are highly linked

[spectoacc] 24/4/2020 07:44

Ha ha if I was a shareholder I'd have def pointed that out too ;)

Refinancing it is.

[rik shaw] 24/4/2020 07:36

Refinancing not rescheduling

[spectoacc] 24/4/2020 07:31

Debt reschedule undoubtedly good news this morning.