Empiric Student Property Posts Strong Business and Trading Update

Empiric Student Property plc, a leading student accommodation provider in the UK, recently shared an encouraging business and trading update as of November 2, 2023.

Key Highlights:

• Achieved an impressive 99% revenue occupancy for the 2023/24 academic year.
• Recorded substantial like-for-like growth in average weekly rents for the 2023/24 academic year at 10.5%.
• Raised the dividend target for the 2023 financial year to 3.5p, marking a 27% increase from 2022.
• Aims for a minimum like-for-like rental growth of 5.0% for the 2024/25 academic year.

Duncan Garrood, CEO of Empiric Student Property plc, expressed confidence in the results, highlighting strong demand for high-quality student accommodation in the UK.

2023/24 year

The booking cycle for the 2023/24 academic year has exceeded expectations.

The accommodation is effectively full, with revenue occupancy at 99%, in-line with 2022/23 figures.

Like-for-like rental growth of 10.5%, the result of a higher level of late cancellation and rebooking activity, reflects the benefits of dynamic pricing.

Half of all bookings were made by domestic students; the remainder consists of 31% Chinese students, and 19% hailing from other countries.

Disposals and Refurbishments

Progress continues on disposals and refurbishments. The sale of Grosvenor Apartments in London was completed as planned, generating £7.0 million.

Refurbishment of 254 beds and amenity areas across six core locations was completed on schedule. Talbot Studios in Nottingham welcomed students in September 2023.

173-bed Brunswick Apartments in Southampton was closed for the duration of the 2023/24 academic year. Works are underway and it will reopen to students from September 2024.

Acquisitions and Growth

Properties valued at over £40.0 million are under offer in top-tier university cities.

The Board explores opportunities to accelerate its Post-Graduate product and facilitate continued growth. Conversations with parties to establish suitable partnership are being managed by PwC.

Debt and Liquidity

As of September 30, 2023, property LTV was 28.2%, with a weighted average cost of debt of 4.4% and a weighted average term to maturity of 4.2 years. Cash and available facilities totalled £109.5 million.

Dividends

With anticipated EPRA earnings of approximately 4.0 pence per share for the year ending December 31, 2023, the dividend target has been increased to 3.5 pence per share, representing a 27% year-on-year increase. A 0.9375 pence per share third-quarter dividend has been declared.

Key Appointments

Joanne Pollard, Chief Operating Officer, and Frances Abbott, Wellbeing Manager, have joined to enhance the service proposition and support students' well-being.

2024 FY

For the 2024/25 academic year, strong revenue occupancy is expected, targeting a like-for-like weekly rental growth of at least 5% and a gross margin above 70%.