Empiric Student Property raises £56.1m to fund acquisitions, refurbishments

17th Oct 2024 12:07

(Sharecast News) - Empiric Student Property has successfully raised £56.1m, it announced on Thursday, to help it fund acquisitions and refurbishments.

The FTSE 250 company said the fundraise was conducted through a combined institutional placing and a retail shareholder offer.

It said the placing resulted in the issue of 59.7 million new shares at 93p each, generating £55.5m.

Additionally, the RetailBook offer, which targeted existing retail shareholders, raised £0.6m through the issue of 663,714 shares at the same price.

The board said the equity fundraising aligned with its strategy to accelerate growth by capitalising on attractive investment opportunities.

It said the proceeds would be used to fund acquisitions of assets in university cities such as Manchester and Edinburgh, valued at £30m, and to support ongoing postgraduate accommodation refurbishments.

Those investments were expected to yield strong returns, with projected unlevered internal rates of return exceeding 10%.

The offer also aimed to strengthen Empiric's balance sheet, maintaining a loan-to-value ratio in the 30% to 35% range.

Empiric said its operational focus on expanding its footprint in key university cities remained robust, underpinned by strong demand for purpose-built student accommodation (PBSA) and limited supply growth in the UK's rental market.

The firm said its scale and clustering strategy was designed to enhance operational margins and long-term shareholder returns.

Following the placing and retail offer, Empiric's total share capital increased to 663.9 million shares, with trading of the new shares set to begin on 21 October.

"This placing will allow the business to grow, drive operational margins and create long-term shareholder value," said chief executive officer Duncan Garrood.

"There is a fantastic opportunity now ahead of us.

"We will remain focused on doing what we do best; creating high quality, modern student accommodation serving top-tier universities, incrementally driving value to generate stable, long-term returns for our shareholders."

At 1441 BST, shares in Empiric Student Property were down 2.48% at 94.5p.

Reporting by Josh White for Sharecast.com.