Student digs firm reassures investors over EU vote

Student homes provider Empiric, which owns properties across Scotland's main university cities, yesterday reassured investors over the impact of the Brexit vote and argued the sector could be a beneficiary in the long-term.

Empiric's portfolio includes a site in Edinburgh. Picture: Ian Georgeson

The company said that although the consequences of the referendum result for higher education were unclear, it stressed that individuals from the European Union (EU) only represent 6 per cent of full-time student numbers in the UK.

Empiric said that the potential long-term devaluation of sterling would make the UK more affordable for international students.

“There is also a significant increase in expectations of an interest rate fall which would be to our benefit. Therefore, we believe that the higher education sector and, by implication, the student accommodation sector will prove resilient,” said Empiric in a trading stading.

Paul Hadaway, chief executive, said: “Empiric has experienced another exciting six months and we are particularly pleased that a significant number of assets which were under development have reached practical completion or are on schedule to reach practical completion in the next few months, in time for the 2016/17 academic year, with the resultant uplift in rental income and valuation.

“With the Brexit result, we can expect some market volatility over the foreseeable future but we are confident that our business model will prove to be robust.”

The company’s property portfolio is made up of 7,265 beds across 75 properties in 29 university cities and towns in the UK.

By the start of the 2016/17 academic year in September, it expects that a total of 65 of the sites will be operational.

Its properties in Scotland include an 86-bed site at Buccleuch Street, Edinburgh, and a 23-bed property at St Peter Studios in Aberdeen which were both completed earlier this month.

The company is also working on a 178-bed development at the former Willowbank Primary School in Glasgow which is due to complete in August and which is next to its existing Ballet School property in the city. Empiric also owns sites in Stirling and St Andrews.

The company said 70 per cent of the portfolio let for the academic year commencing September 2016.

It said it was achieving an annual rental increase for the 2016/17 academic year of approximately 2.75 per cent.