6th Sep 2018 14:07
LONDON (Alliance News) - London-focused student accommodation investor GCP Student Living PLC on Thursday reported a rise in its annual net asset value per share as its property portfolio valuation grew, leading to an increased dividend payout.
In the twelve months ended June, GCP Student Living's portfolio increased in value to GBP784.4 million from GBP634.6 million. The valuation uplift has been driven by full occupancy, rental growth and "yield compression".
The company's net asset value, cumulative of income, per share increased 7.2% to 149.12 pence from 139.08p.
Pretax profit more than doubled to GBP61.1 million from GBP23.5 million. Rental income increased 24% to GBP35.8 million from GBP28.8 million.
GCP Student Living said it achieved year-on-year student rental growth of 4.1%, which was ahead of the national average for private student accommodation of 2.9%. Bookings for 2018-19 remain in line with expectations.
The company attributed its performance during the year to a fifth consecutive year of full occupancy and year-on-year rental growth, allowing for a dividend increase.
Valuation gains on its assets, partly as a "result of yield compression arising from competitive market activity for private student accommodation assets", also contributed to performance growth.
GCP Student Living increased its total dividend to 5.95p, up from last year's 5.75p.
Looking ahead, the company said it remains confident its portfolio can continue to deliver stable performances.
It warned of the unknown and difficult to quantify risks of Brexit but believes London will remain a "cosmopolitan, global centre of academic excellence".
The company's recent acquisition in Brighton - adding an extra 1,00 beds to its portfolio - are expected to open in 2019 and 2020 and were purchased as GCP Student Living believes the sector fundamentals mirror that of the London market.
Chairman Robert Peto said: "I am pleased to report another year of strong operational results for the Company. This year marks the fifth anniversary since the company's GBP70 million IPO as the UK's first REIT focused on student residential assets in May 2013. During that period, its EPRA NAV per share has grown from 97.00p to 149.12p and its annual dividend per share has grown from 5.5p to 5.95p. The company has delivered an annualised shareholder return since IPO of 12.5%, exceeding its target of 8% to 10% and almost double the return of the FTSE All-Share index over the same period.
"The company's ability to deliver its own pipeline through future contractual arrangements has been a key factor in its success since IPO. The company's current assets under development or refurbishment are well placed to provide potential rental and earnings growth, in addition to NAV growth prospects, over the short to medium term. In particular, the board is pleased to note that the refurbishment of Scape Bloomsbury, located in the heart of London WC1, will be complete in time for the 2018/19 academic year."
Shares in GCP Student Living - whose stock ticker is, appropriately, DIGS - were up 0.8% Thursday at 152.20 pence each.
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