GCP Student declares March dividend, outlines future risk
GCP Student Living announced on Friday that, as at 31 March, its unaudited estimated EPRA net asset value per ordinary share was 171.55p, as it confirmed it was still paying a dividend for the quarter through March.
The FTSE 250 real estate investment trust said the EPRA net asset value, ex-income, was 169.97p per ordinary share, representing a quarterly decrease of 1.8%, which was driven by the expected impact of the Covid-19 coronavirus pandemic on its income for the rest of the 2019-2020 academic year.
It said the value of its portfolio was £986.5m, representing a like-for-like decrease over the quarter of 0.9%.
At that date the portfolio, of which 81% was located in and around London, comprised 11 assets with around 4,100 beds, including Scape Brighton which is under construction, with the net initial yield on the operational portfolio standing at 4.44%.
The valuations had been reported on the basis of ‘material valuation uncertainty’ by the company's independent valuer, the board said, under recent guidance issued by the Royal Institution of Chartered Surveyors (RICS) in light of the Covid-19 pandemic.
As it said on 27 March, 74% of all the budgeted 2019-2020 academic year income of £50.5m had already been collected, and on Friday GCP said it had now collected 80%.
“As a result of the flexibility offered to direct let tenants and the wider economic impacts of Covid-19, the directors anticipate a reduction of around £9.0m, or 18%, to all the budgeted 2019-2020 academic year income,” the board said in its statement.
“The company currently anticipates property operating cost savings of £1.0m from lower occupancy reducing the impact on earnings to £8.0m.”
GCP also said on 27 March that it would “look favourably” on requests to forgo rents by residents returning home for the rest of the academic year on a case-by-case basis.Currently, about 40% of rooms remained occupied or had residents paying a reduced rent for the rest of the academic year.
GCP still announced a third interim dividend of 1.58p per ordinary share, for the quarter ended 31 March.
“In the event that the disruption caused by the Covid-19 pandemic continues into the 2020-2021 academic year, the company's rental income will be adversely impacted,” the board said.
At 1022 BST, shares in GCP Student Living were down 2.38% at 131.4p.