Empiric Student Property has announced that it has entered into a nomination agreement with the University of Bath in respect of three operating properties and two forward committed assets in Bath. The three operating properties are Piccadilly Place (pictured), Canal Bridge and Widcombe Wharf, whilst the two forward committed assets (due for completion in September 2016) are 1-3 James Street West and James House . The duration of the Nomination Agreement is for five years from commencement in September 2016 (except for the 141 studios at James House which are covered under the Nomination Agreement for one year from commencement).
Under the terms of the Nomination Agreement, the Group’s portfolio in Bath (totalling 354 beds for the 2016/17 academic year) will be let to students provided by the University of Bath, which will guarantee 100% of the annual fee income for the available accommodation for the duration of the agreement. The Annual Fee, which has been agreed at current market rates, will be subject to an annual increase of between 2-5%, with reference to the Retail Price Index.
This announcement follows on from Empiric’s announcement that it has agreed a new fixed rate term loan facility of £80m arranged by Cornerstone Real Estate Advisers Europe LLP, a member of the MassMutual Financial Group. The Facility is secured against a portfolio of 20 operating assets, held as a lending group through a wholly owned subsidiary, Empiric Investments (Four) Limited. The Facility is available to draw down in full, subject to the fulfilment of certain conditions precedent, until 12 April 2016. It is repayable 12 years from the date of the initial draw down and has a fixed all in rate of 3.24 per cent., interest only, throughout the term. This rate is fixed up to a loan to value ratio of 55%.
Empiric says that part of the Facility will be used to refinance £37.2m of debt which has been repaid to Santander and Royal Bank of Scotland, with the balance of £42.8m (before expenses) to be used to fund further acquisitions. Following draw down of the Facility, Empiric says that its estimated loan to value ratio will be approximately 23.2% (31 December 2015: 20.3%). Furthermore, an additional committed facility of up to £40m is available to the Group, to be requested on or before 7 December 2016, subject to meeting certain conditions.
Empiric enters into a nomination agreement with the University of Bath and secures new loan facility : ESP