GCP Student Living in expansion mode after decent first half

Student residential asset investor GCP Student Living updated the market on its performance on Tuesday, reporting that at close of business on 31 December, its unaudited estimated EPRA net asset value per ordinary share was 174.71p.

The London-listed real estate investment trust said its EPRA net asset value included income for the period, and did not include a provision for an accrued dividend for the quarter to 31 December.

Its EPRA net asset value ex-income was 173.13p per ordinary share, representing a quarterly increase of 2.7% and an increase for the calendar year 2019 of 10.7%.

“The board is pleased to announce a first interim dividend of 1.58p per ordinary share, in respect of the quarter ended 31 December,” the directors said in their statement.

It would be paid on 9 March to ordinary shareholders on the register as at 14 February.

The dividend would be paid as 1.42p per ordinary share as a REIT property income distribution in respect of the group's tax-exempt property rental business, and 0.16p per ordinary share as an ordinary UK dividend.

Looking at its portfolio, as at 31 December, the valuation was £987.3m, of which 85% was located in and around London, representing a like-for-like increase over the quarter of 1.9%.

At that date, the portfolio comprised 11 assets with around 4,100 beds, including one asset which was expected to complete construction for the 2020-2021 academic year.

The net initial yield on the operational portfolio was 4.42%.

GCP Student Living said its operational portfolio was fully occupied for the 2019-2020 academic year, with student rental growth of 4.4% year-on-year.

On 23 May, the company announced that it had completed the acquisition of Scape Brighton - a large-scale 555-bed development located on the primary campus of the University of Brighton.

“The construction of Scape Brighton remains on-track to become operational for the 2020-2021 academic year,” the board said.

“The company benefits from licensing fees which provide a 5.5% per annum coupon through the construction phase.”

It said it was also benefitting from a conditional forward purchase agreement to acquire Scape Mile End Canalside, which it described as a high-specification, 412-bed new-build asset “immediately adjacent” to Queen Mary University of London, and in the same locality as its existing 588-bed Scape East asset.

Discussions with the vendor of Scape Canalside were ongoing.

“On 27 December, the company issued 41,365,400 new ordinary shares at a price of 186p per share pursuant to a placing, raising gross proceeds of approximately £77m.

“It is currently intended that the net proceeds of the placing will be used towards the acquisition of Scape Canalside, if acquired, and for the purpose of the company maintaining conservative borrowing levels, including - should Scape Canalside not be acquired - by repaying its re-drawable credit facility and funding the completion of construction of its Scape Brighton asset with equity instead of drawing on additional debt for those purposes,” the board explained.

At 1206 GMT, shares in GCP Student Living were down 0.09% at 203.31p.