GCP Student Living has reported a 1.8% fall in its net asset value (NAV) for the quarter to the end of March 2020, driven by the impact of covid-19.
The student accommodation provider’s EPRA NAV (ex-income) was 169.97 pence per ordinary share. Its portfolio, which is majority located in London, was valued at £986.5m at the end of the quarter, a fall of 0.9%.
As has become standard across the property sector during the covid-19 pandemic, the valuation were reported on the basis of ‘material uncertainty‘.
The group has now collected 80% of the £50.5m budgeted income for the 2019/20 academic year. It said due to the flexibility it has offered to direct let tenants, it anticipates a reduction of £9.0m (18%) to all the budgeted 2019/20 academic year income. It also anticipates property operating cost savings of £1.0m from lower occupancy, reducing the impact on earnings to £8.0m.
Among its direct let income, which represents 79% of the 2019/20 academic year rent roll, it has now collected 84% of rent.
Bookings for the forthcoming 2020/21 academic year are marginally behind the same time last year, it added.
Nominations agreements and long-term leases account for 21% of the group’s budgeted income and 71% of this has been collected for the 2019/20 academic year. Flexible office provide WeWork, which has along-term lease on space at the group’s Scape Shoreditch asset that represents around 4.9% of the group’s annual budgeted income, has paid around half of rent due for the current quarter.
A long-term nominations agreement with a subsidiary of
INTO University Partnerships, a provider of foundation courses that has a long-term nomination agreement in place for 210 beds at GCP Student’s Scape East asset, is currently in arrears for the latest rental instalment. GCP Student is in discussions with both WeWork and INTO.
Rental income in respect of the group’s lease at Circus Street, Brighton, continues to be received in line with expectations, while a nominations agreement for 100 beds at Scape Greenwich has been treated in line with direct let tenants (released from the final instalment of the 2019/20 academic year on a case by case basis).
Cash and available debt facilities
The company currently benefits from a robust balance sheet, including cash resources of £58.4m, conservative borrowing levels and an undrawn £45m redrawable credit facility.
Borrowings have an average weighted maturity of around six years and the group’s loan to value ratio is 20%.
Dividend
The company has declared a third interim dividend of 1.58 pence per ordinary share, in respect of the quarter ended 31 March 2020. The dividend will be paid on 8 June 2020 to ordinary shareholders on the register at 11 May 2020.
It will keep future dividends under review until the scale of the impact caused by covid-19 on 2020/21 income is known.
DIGS : GCP Student posts 1.8% fall in NAV