Empiric Student Property, UK

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Investment Date
Q2 2010

Exit Date
Q1 2017
(Fully Realised)

Asset type
Student accommodation

Revcap strategy
Development in niche investment category

Revcap Fund
KHCP I / KHCP II

Investment Type
Programmatic Joint Venture

Background and Opportunity

  • Then a private company, the JV partner approached Revcap with a business plan to target the development and operation of “business class” student accommodation in Russell Group university cities
  • There was a clear opportunity to apply property skills to identify well located sites for re-development in carefully selected, under-supplied cities with a strong foreign student and postgraduate presence
  • Properties were sourced in Birmingham, Bristol, Cardiff, Edinburgh, Exeter, Glasgow and Southampton comprising over 850 student beds

Transaction Progress

  • The partnership developed out all 7 assets
  • Edinburgh was sold individually to an institutional investor
  • The JV partner floated Empiric on the London Stock Exchange in June 2014 as an internally managed REIT
  • Four of the JV’s developed and completed assets were used as seed investments for the IPO and a further two developments were progressed via a new 50/50 JV with Revcap

Current Status

  • The current market capitalisation of Empiric is over £500m (ticker ESP.L)
  • Empiric bought out Revcap’s 50% stakes in Southampton and Glasgow during 2016 and 2017 respectively
  • Revcap and Empiric still plan to work together on new development projects
  • Overall the developments have generated an IRR to Revcap of 20%+ and a significant promote was earnt by Empiric and its team

SIMILAR INVESTMENTS

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  • Stella Vitalis Nursing Homes, Germany
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  • Insite Poster Properties, UK