GCP Student Living benefits from rise in international students

GCP Student Living, a UK based student accommodation provider, has almost doubled its full year revenue thanks to the rise in international students.

The real estate investment trust's (REIT) properties, 96% of which are in London, have all been fully occupied during the year and rental growth was at 4.5% compared to 3.6% in the previous period.

This rise in demand was matched with a lack of supply of accommodation in London, helping increase the firm’s revenue nearly twofold from £11.5m in 2015 to £22.5m in the year to 30 June 2016.

The firm’s net operating margin grew marginally from 78% to 79%.

During the period the firm acquired four new properties, Scape Shoreditch, Scape Surrey, The Pad 2 development at Royal Holloway University of London (RHUL) and Water Lane Apartments in Bristol. Its loan-to-value for the properties has risen from 22.5% to 26.6%.

Chairman Robert Peto said: “The company’s core focus on student residential accommodation assets located in and around London, coupled with conservative levels of borrowings, provides shareholders with a property portfolio offering defensive income characteristics which should offer greater resilience to market uncertainty following the ‘Brexit’ vote, particularly relative to wider UK commercial property. The outlook for the company remains positive in light of the Investment Manager’s ability to secure the opportunity to acquire additional assets in the Company’s core market.”

The board is looking to further expand its operations through more acquisitions and moving the company’s listing to the UK Listing Authority and trade on the premium segment of the London Stock Exchange’s Main market.

The company successfully raised £79m through oversubscribed placings of ordinary shares. Annual shareholder return since its IPO fell from 18.1% to 13.9%, which was over the company’s target of 8-10%.

EPRA net asset value (NAV) per share rose from 125.51p in 2015 to 136.93p. Dividends per ordinary share grew to 5.66p from 5.60p in the previous period, which is in line with expectations. The share price rose 0.95% to 147.89p at 1106 BST on Friday.