Empiric Student Property has received credit approval from a major UK bank for its first revolving credit facility (RCF).
The £70m revolver will help fund the student accommodation specialist’s development activity and provide it with a more flexible method of financing.
Speaking to Property Week after the group’s half-year results, Empiric’s chief executive Paul Hadaway said that funding its developments through the RCF would also be cheaper.
“We kick off the development cycle in September/October every year and funding that partly through the RCF will work better for us, as it’s much cheaper, easier and faster to run than the £63m of traditional development debt that we currently have in place,” he said.
In half-year results this week, Empiric revealed it had deployed around £51.2m of the £110m equity it raised this July, having made acquisitions of an asset in Canterbury, a 98-bed studio building in Liverpool, a development site in Bristol and a forward-funded development in Edinburgh.
The company also reported a 13.4% increase in the value of its portfolio to £817.9m over the six months to 30 June. However, NAV per share was virtually unchanged at 105.8p and earnings per share dipped by 14.6%.
Looking ahead, Hadaway downplayed the potential impact of Brexit on the student accommodation market and the significance of a 3% drop in the number of EU students coming to the UK this year.
“The vast majority of the overseas students in the UK are from outside the EU and most of those EU students are postgraduates or on the Erasmus scheme who come to the UK for a year or less, making Brexit less relevant to the market.
“Lack of clarity around funding and research programmes and the perception of the UK as not welcoming will impact the market, but the UK government recognises the huge importance of the UK’s higher education sector,” he said.