GCP Student Living has recorded uplifts in NAV per share and portfolio value.
The value of its portfolio, which comprises 10 assets with around 3,600 beds primarily in London, leapt by 13.8% to £841.5m in the six months to 31 December, compared with the same period in 2017. EPRA NAV per share was up by 7.9% to 157.93p.
Nick Barker, portfolio manager of GCP Student, told EG: “We are still looking to add to our London portfolio – historically we have been able to grow this by around £200-300m each year.
“Through our relationship with Scape, we have also previously indicated there is an opportunity in our soft pipeline [regarding] its scheme in Guildford, which it has planning consent for. In time, probably in around two years, we would like to add that property to our portfolio.”
The competition, however, is intensifying while supply in London appears to be slowing down. Barker said: “London in particular is going through an interesting period where planning appears to be getting tougher for new schemes. Rather than enabling more student accommodation to be delivered, the London Plan seems to be creating more barriers.
“As a consequence of that, as well as the wider, market-driven reasons why student schemes do not get delivered in London – namely alternative uses – the investment market for student assets in London is getting stronger.”
Annualised total returns since the company’s listing were 11.9%. Its loan-to-value ratio stood at 26%.
Earnings were underpinned by rental growth of 3.5% during the current academic year. The portfolio was 100% occupied.
Robert Peto, chairman of GCP Student Living, said the focus on “assets in and around London has delivered the company’s strongest NAV performance for an interim period since 2015”.
He added: “Since the EU referendum in 2016, the board has repeatedly noted that the future risks of Brexit remain unknown and difficult to quantify. Notwithstanding, the attraction of the UK, and London in particular, for domestic and global students alike remains evident.
“Education remains a core sector for the UK economy. With the number of international students in the UK continuing to rise (a substantial number of whom choose to study in and around London) the board remains confident that the company will continue to deliver stable performance.”
The company said that it will further benefit from its agreement to acquire Scape Canalside, a new-build asset next to Queen Mary University of London, E1.
It is currently considering methods of financing the purchase ahead of 30 June.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
