25th Apr 2016 07:19
LONDON (Alliance News) - Empiric Student Property PLC said Monday it has purchased a student accommodation property in Manchester for GBP29.5 million and bought out its joint venture partner in the Brunswick House scheme in Southampton.
The student accommodation operator said it purchased the long leasehold on the Manchester property, Victoria Point, from MCR Property Group Ltd, with the lease standing at 999 years from March 2007 for GBP29.5 million. The property is a 561-bed scheme across six separate blocks on a 3.5 acre site, Empiric said, adding that it has been let entirely to student since it was built in 2009.
Victoria Point is fully let for the 2015/16 academic year and is "letting well" for 2016/17, Empiric said. The property is to be managed by Empiric's Hello Student platform, the company added.
Elsewhere Empiric said it has purchased the remaining 50% share in Empiric (Southampton) Ltd from an investment fund affiliated with Revcap Advisors Ltd for GBP5.0 million. Empiric (Southampton) had been a joint venture asset with the investment fund, Empiric said, and, as such, Empiric now owns 100% of the interest in Brunswick House, Southampton, which the joint venture asset was set up to develop.
The joint venture arrangement was established in July 2014 to redevelop Brunswick House, Empiric said, and was completed in September 2015. The property comprises 173 beds and is fully let, with booking for the 2016/17 academic year "well ahead of booking at this time last year".
Empiric said the GBP5.0 million was an initial payment calculated in accordance with the terms of the joint venture arrangements and a further payment will become due within 18 months, the size of which will be determined at the time based on "certain specified parameters".
Following completion of this transaction, Empiric has assumed full responsibility for the GBP10.0 million development loan facility in place with Close Brother Ltd in relation to Brunswick House. Under the terms of the facility, the loan is repayable on December 31, Empiric said.
"This is the first of two joint venture developments with Revcap to be brought successfully to a conclusion. Brunswick House is a prime example of our ability to take an existing office block and redevelop it into a premium student accommodation asset, which meets all of our exacting specifications," Empiric Chief Executive Paul Hadaway said.
Shares in Empiric were up 0.3% at 110.81 pence on Monday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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