GCP Student Living New investment opportunity

 
TIDMDIGS 
 
GCP Student Living plc 
 
(the "Company" and together with its subsidiaries, the "Group") 
 
LEI: 2138004J4ID66FK38H25 
 
New investment opportunity 
 
GCP Student Living plc, the UK's first REIT focused on student residential 
assets, today announces that it is in advanced negotiations, through its 
Investment Manager, Gravis Capital Management Limited (the "Investment 
Manager"), to acquire and fund the construction of Scape Brighton, which if 
acquired, would be the Company's second asset in Brighton. 
 
The Directors believe that Brighton demonstrates the strong supply-demand 
imbalance for student residential accommodation in the UK which is typical of 
the localities of the Group's investments, with a shortage of modern, 
purpose-built accommodation driven by supply restrictions including high 
barriers to entry and strong demand arising from both domestic and 
international students. Brighton has a structural shortfall of private direct 
let purpose-built student accommodation. 
 
Scape Brighton is a large scale, purpose-built private student development 
located on the primary campus of the University of Brighton. Scape Brighton 
will provide c.550 beds and extensive communal areas with c.1,500 square feet 
of retail space. Subject to the acquisition proceeding, the property will be 
constructed and designed to the specifications set by the Company and Scape 
Student Living, who will oversee the development and be appointed as the asset 
and facilities manager upon completion of construction. The property will 
primarily serve students from Brighton University and the University of Sussex, 
which together have c.36,000 students including c.7,500 international students, 
and is currently expected to be operational in September 2020. 
 
It is intended that Scape Brighton will be acquired and its construction 
financed through a forward-funding arrangement. The purchase of assets under 
development enables the Company to secure properties located in areas which 
benefit from favourable supply and demand characteristics, where appropriate 
operational assets may not be available. Further, the acquisition of Scape 
Brighton should enable the Company to secure a new asset at a yield which is 
expected to be more attractive than yields on acquiring comparable operational 
assets and should provide rental and earnings growth for the Company over the 
long term, in addition to NAV growth prospects. In the event Scape Brighton is 
acquired, the Company expects to benefit from licensing fees which will provide 
a c.5.5% coupon through its construction phase. 
 
Accordingly, the Board and Investment Manager are considering the optimum way 
to finance this acquisition including consulting with shareholders in regards 
to the potential of issuing new equity in June/early July 2018, as well as 
exploring potential sources of debt finance. 
 
The Directors (as advised by the Investment Manager) believe that the Company 
is well placed to continue to provide rental, earnings and net asset growth 
over the short to medium term. This is primarily driven by operational 
efficiencies, the current positive outlook for rental growth for the portfolio 
and the forecast contribution to returns of those properties which are under 
construction (Circus Street and, if acquired, Scape Brighton) or refurbishment 
(Scape Bloomsbury). The dividends paid by the Company are expected to be fully 
covered by earnings when the Company's entire portfolio is fully operational. 
 
For further information, please contact: 
 
Gravis Capital Management Limited    [phone] 
 
Tom Ward 
[e-mail] 
Nick Barker 
[e-mail] 
Dion Di Miceli 
[e-mail] 
 
Stifel Nicolaus Europe Limited             [phone] 
 
Neil Winward                                          [e-mail] 
Mark Young                                            [e-mail] 
Tom Yeadon                                           [e-mail] 
 
Buchanan                                             [phone] 
 
Charles Ryland                                       [e-mail] 
Vicky Watkins                                         [e-mail] 
 
About GCP Student Living plc 
 
The Company was the first student accommodation REIT in the UK, investing in 
modern, purpose-built, private student residential accommodation and teaching 
facilities. Its investments are located primarily in and around London where 
the Investment Manager believes the Company is likely to benefit from supply 
and demand imbalances for student residential accommodation. 
 
The Group's property portfolio comprises ten assets with c.3,600 beds which are 
either currently fully operational or expected to complete construction/ 
refurbishment over the next two academic years. At 31 March 2018, its property 
portfolio was valued at GBP759.1 million. 
 
The Company's standing properties are mainly occupied by international students 
and offer high specification facilities and hotel-level concierge type services 
which the Investment Manager believes are attractive to overseas students. 
 
Important Information 
 
The content of this announcement has been prepared by, and is the sole 
responsibility of, GCP Student Living plc. 
 
This announcement contains inside information for the purposes of Article 7 of 
EU Regulation 596/2014. Upon the publication of this announcement, this inside 
information is now considered to be in the public domain. The information 
contained in this announcement is given at the date of its publication (unless 
otherwise marked) and is subject to updating, revision and amendment from time 
to time. Neither the content of the Company's website nor any website 
accessible by hyperlinks to the Company's website is incorporated in, or forms 
part of, this announcement. 
 
None of Gravis Capital Management Limited or Stifel Nicolaus Europe Limited, or 
any of their respective affiliates, accepts any responsibility or liability 
whatsoever for or makes any representation or warranty, express or implied, as 
to this announcement, including the truth, accuracy or completeness of the 
information in this announcement (or whether any information has been omitted 
from the announcement) or for any loss howsoever arising from any use of the 
announcement or its contents. Gravis Capital Management Limited and Stifel 
Nicolaus Europe Limited, and their respective affiliates, accordingly disclaim 
all and any liability whether arising in tort, contract or otherwise which they 
might otherwise have in respect of this announcement or its contents or 
otherwise arising in connection therewith. 
 
 
 
END 
 

(END) Dow Jones Newswires

June 04, 2018 02:00 ET (06:00 GMT)