Trading and Business Update and Asset Sale
7 June 2021
Empiric Student Property plc
("Empiric" or the "Company" or, together with its subsidiaries, the "Group")
TRADING AND BUSINESS UPDATE
BOOKINGS FOR ACADEMIC YEAR 2021/22 GRADUALLY ACCELERATING
EXETER ASSET SALE AHEAD OF BOOK VALUE
Empiric Student Property plc (ticker: ESP), the owner and operator of premium student accommodation across the UK, announces an update on trading and the business, and the recent completion of the sale of a non-core property in Exeter.
Bookings and market update
All our buildings remain open, staffed, maintained, and operating strictly in line with Government guidance and regulations. We are continuing to work closely with students, universities and wider stakeholders, and by following Government guidance we are ensuring that our residents, colleagues, business partners and the communities in which we operate remain safe and secure, and their wellbeing remains our focus.
Adjusting for the support we have provided to students since January 2021, as a result of the third national lockdown, revenue occupancy for the current 2020/21 academic year remains at 65%. The collection of rents remains in line with our usual collection profile and the physical occupancy level in our buildings is currently approximately 67% of total operational rooms.
Current bookings for the 2021/22 academic year are 40%, whilst lower at this point than in pre Covid-19 cycles, we continue to see bookings gradually accelerate. We expect the sales cycle for the 2021/22 academic year to be significantly back ended as the benefits of the lifting of restrictions by the UK Government take effect. Together with the success of the vaccination programme and the recent UCAS applications, this gives us cautious optimism about a return to increasingly normal levels of occupancy. UCAS applications for the 2021/22 academic year show encouraging growth, with the non-EU international market up by 17% overall, and within this, Chinese applications are up by 21%. UK domestic applications show strong demand growth of 11%.
Sale of non-core asset in Exeter ahead of latest book value
The £11.05 million sale of an asset in Exeter is ahead of the latest book value at 31 December 2020 and is in line with the Group's strategy to dispose over the short to medium term of around £100 million of non-core assets.
Good progress on increasing our focus on ESG
As a business, we are committed to creating and operating a responsible and sustainable business, which will deliver further sustainable value for all our stakeholders.
As previously announced, we launched a Board level ESG Committee, which is working with the Senior Leadership Team on projects that further improve the sustainability of our operational business and ways in which we can be more environmentally supportive and deliver further positive social impact. Our benchmarking exercise and materiality assessment work is largely complete, with good progress being made on developing the Group's sustainability roadmap and formalising our ESG strategy. We expect to update further on this at our half year results for the six months ending 30 June 2021, that we expect to announce on Thursday, 12 August 2021.
Duncan Garrood, Chief Executive Officer of Empiric Student Property plc, said:
"We are encouraged that bookings for the 2021/22 academic year continue to gradually accelerate, although with bookings to date at 40% we remain behind pre-Covid-19 cycles.
The successful vaccination programme, the ongoing lifting of restrictions and the encouraging recent UCAS applications for the 2021/22 academic year, leave us cautiously optimistic about a return to more usual occupancy levels, albeit with sales expected to be significantly back ended for the forthcoming academic year. Furthermore, we remain confident that our strongly differentiated premium accommodation for students and Hello Student® brand proposition and offer provide us with a compelling competitive advantage, especially in a Covid-19 affected world.
We are also pleased to have completed the £11.05 million sale of a non-core asset in Exeter ahead of the latest book value as at 31 December 2020, which brings the total value of asset sales this year to £18 million."
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Empiric Student Property plc
(via Maitland/AMO below)
Duncan Garrood (Chief Executive Officer)
Lynne Fennah (Chief Financial & Operating Officer)
Jefferies International Limited
020 7029 8000
RBC Europe Limited (trading as RBC Capital Markets)
020 7653 4000
Maitland/AMO (Communications Adviser)
07747 113 930
The Company's LEI is 213800FPF38IBPRFPU87.
Further information on Empiric can be found on the Company's website at www.empiric.co.uk.
Empiric Student Property plc is a leading provider and operator of modern, predominantly direct-let, premium student accommodation located in high-demand university towns and cities across the UK. Investing in both operating and development assets, Empiric is a fully integrated operational student property business focused on premium studio-led accommodation managed through its Hello Student® operating platform, that attracts affluent growing student segments.
The Company, an internally managed real estate investment trust ("REIT") incorporated in England and Wales, listed on the premium listing segment of the Official List of the Financial Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in June 2014.