Empiric Student Property has acquired the freeholds of a portfolio of seven operational, direct-let, premium student accommodation properties in Liverpool and Stoke-on-Trent, comprising a total of 502 beds, for over £40m.
They are paying cash of £22.8m (excluding acquisition costs) and taking on responsibility for the existing debt on the properties of £18.8m which has been retained post completion, resulting in a total acquisition value of £41.6m.
The debt facility is provided by Santander at a margin of 2.5% above LIBOR with a remaining term of approximately 4 years. Empiric can give 90 days’ notice on the debt and this facility will be reviewed in due course in the wider context of the Group’s overall gearing strategy.
The holding companies of the seven properties have been acquired from Urban Sleep, which will continue to manage the operation of the properties on behalf of Empiric. They say the properties have an excellent occupational track record and are fully let for the 2014/15 academic year. The properties are already 92% pre-let across the portfolio for 2015/16 and are being acquired with a rent guarantee for this period. The tenant mix is consistent with that of Empiric’s existing portfolio. Approximately 9% of the portfolio income is received from a variety of commercial tenants.
In Liverpool they are getting six individual buildings, five of which are located in close proximity to each other on (or just off) Myrtle Street and one is a short walk away. Myrtle Street is a prime central location forming the southern boundary of the University of Liverpool’s main campus and is less than a five minute walk from Liverpool John Moores University’s Mount Pleasant campus.
With four popular higher education institutions, Liverpool has a student population estimated to be over 40,000. Most notable of these institutions is the University of Liverpool, a Russell Group University, ranked 36(th) in The Times Good University Guide 2015. With such a strong history of popular culture, Liverpool is an attractive and vibrant city for students and a significant and established tourist destination.
Art School Lofts (a 2012 conversion of a Grade II listed building) is a low-rise, multi-storey block which provides a total of 64 beds comprising 60 studios and one four-bedroom apartment. The lower ground and ground floor levels are fully let commercial space, occupied by a popular restaurant and wine bar, and Urban Sleep’s own offices.
Maple House (constructed in 2012) is a low-rise, multi-storey building which provides a total of 147 beds comprising 138 en-suite bedrooms (arranged mainly as three-bedroom apartments) and nine studios. There are also three commercial units on the ground floor that are let to the Co-op Supermarket, Greggs and Café Nero.
Chatham Lodge (constructed in 2010) is a low-rise, multi-storey building which provides a total of 50 beds comprising 47 en-suite bedrooms (arranged mainly as three-bedroom apartments) and three studios. There is a retail unit let to Tesco Express on the ground floor.
Hayward House (constructed in 2013) is a low-rise, multi-storey building which provides a total of 74 beds comprising 66 en-suite bedrooms (arranged as three-bedroom apartments) and eight studios.
The Octagon (a 2013 conversion of a Grade II listed building) is a low-rise, multi-storey building which provides a total of 19 beds comprising 17 studios and one two-bedroom apartment.
Grove Street Studios (a 2011 conversion and refurbishment of a 1960s building) is a low-rise, multi-storey building which provides a total of 28 beds comprising 20 studios and eight en-suite bedrooms (arranged as two-bedroom apartments). The property benefits from planning consent for a further nine studios within the grounds of the scheme.
In Stoke-on-Trent they are buying Caledonia Mill (constructed in 2011), a low-rise, multi-storey building which provides a total of 120 beds comprising 114 en-suite bedrooms (arranged mainly as three-bedroom apartments) and six studios. The majority of students attend the University of Keele, which is ranked 40(th) in The Times Good University Guide 2015. The property is also located close to Stoke-on-Trent College’s Cauldon Campus and the main campus of Staffordshire University.
ESP : Empiric Student Property buys in Liverpool and Stoke