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Rents Increase Despite a Decline in Occupancy

Posted by Richard Ward

Image courtesy of Flickr, Creative Commons

In its latest trading update, Empiric Student Property has reported that occupancy across its portfolio has fallen to 70%, from 94% reported in 2019-20. However, bookings continue to be made, albeit at lower levels than in previous years.

Despite the reduction in occupancy, like-for-like rental growth was recorded at 2.4% (2019-20 full year: 3.1%). The reported occupancy figure of 70% is net of cancellations and includes just under 10% of occupancy from students still to check-in between now and January 2021.

Under normal conditions, Empiric would expect a third of students from each of the UK, China and other international countries. For the 2020-21 academic year, UK students equate to 39%, with 29% from China and 32% from other international combined.

The company has not reinstated dividend payments due to the extended check-in cycle this year, although the board will continue to keep this under review and will provide an update in the first quarter of 2021.

Commenting on the update, Duncan Garrood, Chief Executive Office of Empiric Student Property plc, said; "Whilst we continue to weather the challenges that have arisen as a result of Covid-19, we continue to trade profitably, and we remain very confident about our long term future. The long-term fundamentals supporting the student housing sector remain strong and our smaller, more flexible buildings have adapted well to many of the challenges posed by this pandemic. Our philosophy of "homes not halls" has never been more compelling."

"Having visited many of our assets over the last few weeks, I am also hugely impressed by, and grateful to, the dedicated operational teams who continue to work in challenging circumstances to keep our buildings open and provide excellent services and assistance to residents who need our support."