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New student accommodation trust seeks £110m

by Robert St George on May 13, 2014 at 13:12

New student accommodation trust seeks £110m

A new real estate investment trust that will focus on student accommodation is seeking to raise more than £110 million in a June flotation.

The Empiric Student Property fund will be managed by a team from London Cornwall Property Partners, with the firm’s current £40 million portfolio of student accommodation assets expected to be acquired by the new trust.

Empiric is targeting an annual total shareholder return of 13% once fully invested, comprising a 6% dividend yield and average annual net asset value growth of 7%.

The trust’s total expense ratio is expected to be approximately 1% of net asset value.

Empiric intends to focus on the UK’s top 27 university cities, with accommodation provided principally to second and third-year students, postgraduates, and international students. It claimed that in its target cities, the equivalent of 96% of the student body beyond first-year undergraduates have no access to purpose-built accommodation.

The managers expect net initial yields on its properties of around 6.5%, with annual rental reviews.

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