GCP Student Living shares begin trading in London and Channel Islands
Trading in shares of GCP Student Living, the first student accommodation REIT in the UK, have begun on the London Stock Exchange (Specialist Fund Market) and on the Channel Islands Stock Exchange (CISX).
The shares trade under the ticker "DIGS" and have also been admitted to listing on the Official List of the CISX.
Applications were received for an amount significantly in excess of 70 million shares, this being the maximum number of shares available under the placing and offer for subscription.
Accordingly, subscriptions have been scaled back in accordance with the terms set out in the prospectus with the company issuing 70 million shares, raising aggregate gross proceeds of GBP70m at an issue price of GBP1.00 per share.
The estimated unaudited net asset value per share at admission is 97.0 pence. Gearing on admission was approximately 27 per cent of gross assets.
GCP Student Living invests in modern, purpose-built private student rental accommodation and teaching facilities in prime London locations. The initial asset will be Scape East, which is a fully occupied, 588 studio bedroom facility in East London. The company has already established a pipeline of a further two schemes in central London.
The company will target an initial annualised dividend yield of 5.5 per cent in the period from admission to 30 June 2014, and will seek to grow the dividend in line with RPI. Total returns of eight per cent to 10 per cent per annum will be targeted over the longer term.
Cenkos Securities is the sole placing agent and financial adviser.
Robert Peto, chairman of GCP Student Living plc, says: "Following the highly successful IPO of GCP Student Living the board is wholly focused on delivering its investment objective to provide shareholders with regular, sustainable, long-term dividends coupled with the potential for capital appreciation. We look forward to working with the investment manager and asset manager in delivering this objective and growing the company's asset base over time."
Tom Ward, partner at Gravis Capital Partners, says: "I am delighted with the enthusiasm shown by investors in supporting the IPO of GCP Student Living, which will be the UK's first REIT focused on student residential assets. We believe that the company will, through its focus on prime London student residential assets, offer investors the ability to access an asset class which should benefit from the London supply/demand imbalance with inflation linked characteristics, through a transparent, listed structure."
The net proceeds of the placing and offer for subscription have been used to acquire the initial asset, Scape East. The company expects to make a further announcement in October 2013 in relation to its second asset acquisition.