Empiric Student Property Share Discussion Threads

[okosling] 06/6/2020 12:21

Picking up from Oxman's comment in post 959, the shape of the one month graphs of Unite (UTG) and GCP Student Living (DIGS) are almost indistinguishable from each other, with both up 25% in the past two weeks. But Empiric's graph is completely different, with today's price almost the same as two weeks ago. The contrast in the past few days is especially sharp.

How can this be justified? Are they really different? Perhaps Empiric is more up-market, appealing to overseas students, whose numbers may drop off more? I really don't think so: I think premium accommodation is ideally suited to the Covid-19 situation and will be in demand. I can't see significantly higher vacancies, even if student numbers are down. I added to my holding yesterday at 59.3p.

[okosling] 06/6/2020 12:10

A report in the Guardian today says that students now finishing their first or second year will mostly be prevented from taking a year off because of Covid-19:


Another report discusses what the new academic year might look like, with various options to comply with social distancing. Cambridge and a couple of others have already said there will be no big lectures, but there are other plans: Worcester says that to keep numbers down it will alternate students between those attending in person and those watching online. June 18th seems to be a crunch date, as that is the deadline for would-be freshers to confirm a firm first choice:

[spectoacc] 05/6/2020 07:31

Thanks @Maddox.

[maddox] 05/6/2020 07:30

Hi SpectoAcc,

The figures are the risk of death following catching Covid-19.

Regards Maddox

[spectoacc] 05/6/2020 06:46

Is that 1 in 10,000 on current figures, or 1 in 10,000 who contract Covid?

Press suggesting lots of university deferrals, so possibly a bad year next year, bumper year after.

Have to say, September doesn't seem so far away.

(Largely agree re risk factors for the yoof, but makes the preposterous govnt instructions to primary schools even more crazy. Basically, half of youngsters still off school, and not likely to return this year, when risk in the under-14's is miniscule).

[maddox] 04/6/2020 23:24

Interesting discussion on Radio 4 Today 1:34:00 in:



Clear divergence of opinion, on the one hand Julia Buckingham Brunel Chancellor, speaks on behalf of Universities UK "wonderful digital education being introduced, very exciting ... have wanted to do this for a long time." Whilst others clearly recognise what prospective students really want Richard Taylor, COO Loughborough Uni "student life must be enjoyable, they want to socialise, the campus university experience".

I think the students will dictate the outcome - mass deferral will spell financial distress for universities.

[tole] 04/6/2020 17:03

Some large volume in the closing auction

[chucko1] 04/6/2020 16:08

Likewise. At these sorts of levels, alternative use comes into play (not that they would). NAV of around 108p, if I recall, so a decent 45% discount.

[tole] 04/6/2020 13:10

I've added a few today in the pullback

[its the oxman] 01/6/2020 13:58

50% plus if this can get back to the 90s. Either students will return in large numbers or not. If they do then fears are very overdone , the shares will have lots of ground to make up and management will need to restart stalled projects. The fundamentals of student no's growing steadily over the next 10 years adds some longer term comfort.

[stevegrass777] 01/6/2020 13:01

But don't you think that as time goes on investors will realise that by sept,oct when students start Covid should be under control and less restrictions in place.
I'm sure the govenment wont want these students on the unemployment statistics!
so should be some milage left in ESP yet.
Yes it's nice to get a 50% discount,but you can manage on less and still make money I would imagine.

[apollocreed1] 01/6/2020 10:59

I wish I could have bought this last week at the 50% discount to NAV.

[stevegrass777] 01/6/2020 10:21

Well looking at the beaches everything that is deamed as fun is ON ON ON,
going back to work the public aren't shure about,the kids arent sure about going back to school.
But I believe University is classed as a fun thing to do so im sure they will want to leave home and get some top notch self containd studio or apartment with en-suite.

[spectoacc] 28/5/2020 06:52

ST said 49% of Chinese students wouldn't take up their places if lectures moved online - sorry, can't recall what survey/basis that 49%.

[maddox] 28/5/2020 00:02

If students chose to defer for a year - what are they going to do? Go travelling? Um don't think that looks very possible. Get a job? Hmm, good luck with that one.

[chucko1] 27/5/2020 20:28

With contact tracing up and running, and likely vastly improved by September, students are likely to take up their places. There will be many things they can do, and for a 19 year old being educated at home on new and tricky material, sounds like a disaster to me.

What else - stay at home and do what? Defer for a year to get a better experience for one year out of three (or four) - and not have a job to do, in many cases, for that year? My money is on a pretty full uptake with good rental income. If they lose 20% of their income for next year, that basically halves their ability to pay the divi. I don't think thats worth 40% of the share price

[its the oxman] 27/5/2020 08:39

Thx. All the operators now looking very left behind by a market which I guess seems happy to assume the worst , that many students will not be attending uni and many rooms left unfilled. Still hard to see this myself.

[maddox] 24/5/2020 14:43

Hi Oxman,

UTG faster NAV growth is a result of two factors - both of which are derived from their capital structure:

>> Acquisitions - it recently acquired Liberty Living the number three in the market and previously the whole of Aston University's student property portfolio;

>> Development Pipeline - which is financed by recycling its capital by selling mature properties into its own PBSA Funds.

UTG has superior financial firepower as it has access to off balance sheet funding from its two partially owner PBSA Funds. This has been instrumental in UTG's NAV growth. If the nightmare scenario plays out for universities - one recourse they have to raise finance would be to dispose of some student property - UTG would be a prime candidate to acquire.

Regards Maddox

[qsmeily456] 23/5/2020 11:32

Less cash for students, more online and deferals plus uncertainty. Add that to institutions reducing and its a 2nd price slide. There's plenty of other shares to invest in this will be a long haul.

Not a holder or a buyer even at these levels. Dead cat bouncing 😆

[its the oxman] 21/5/2020 23:07

Also note they have the right to carry out a share buyback upto c.15%. Not saying it will happen as might slow cash for ongoing developments but given the discount at 55p a token effort might make good sense. Any views.

[its the oxman] 21/5/2020 13:24

Any holders know why nav growth at esp has been more pedestrian compared to utg and digs over last 5 years and whether that is likely to continue - or a reason why esp should perhaps trade on a bigger nav discount. Thx.

[chucko1] 20/5/2020 23:05

From my recollection, it was a huge bind to make your way to the lecture hall. I would have much preferred to have had them on line with the relevant notes available for prior download. Would have allowed for a more extended breakfast.

This issue alone is unimportant, although what is important is whether or not first year students see it that way. Second and third year students will be more than happy with this arrangement, however. If 1 in 5 defer, that is 1 in 15 of all students, assuming a three year course. May also not affect post grad.

More to the point would be that 1 in 5 defer because of the overall experience being compromised, should many other facilities be unavailable. That would be harder to argue, although it still doesn’t affect my 1 in 15 estimate. The university would still have the option of filling the vacant spots with idiots, unless there are none left as there seems to be university places for all, nowadays.

That said, someone hates it, with concerted selling all today. And yesterday afternoon. Which is good, as I believe they are handing us some pretty easy returns on purchases in the mid to high 50s.