In the past i have toyed with the idea of holiday let and buy to let properties but in the end I decided it was less hassle and may be more lucrative to invest in the stock market. It also struck me that maybe student lets would also be a good idea with the steady flow of tenants and a captive audience as it were. I was therefore interested to read recently that record numbers of students entered university this year (despite the higher fees). But if, like me, you don't want the hassle of dealing with agents, property maintenance and tenants then you might be interested to know that there are ways you can invest in student property via listed vehicles in the UK. I've come across two, although there may be more.
The first is called Empiric Student Property (ESP) which listed earlier this year. They provide a home for over 650 students in 8 properties across 6 of the UK's strongest university cities. A further two development properties and one forward-funded property will provide an additional c.430 beds. They are targeting a net total return to shareholders of 13.0% p.a. over the medium term, including a 6.0% p.a. dividend yield. It is not far above the issue price and still quite close to NAV unlike some other property funds.
The second one has been listed slightly longer and is called GCP Student Living which has the great ticker of DIGS. The Company’s investment objective is to provide Shareholders with regular, sustainable, long-term dividends coupled with the potential for modest capital appreciation over the long term and RPI inflation-linked income characteristics. It has been listed slightly longer than ESP and in a recent IMS they said:
"The Company achieved an annualised total return of 11.5% to 30 June 2014, exceeding the Company's annualised target return of 8.0-10.0% per annum. The Company's target 5.5% annualised dividend yield in respect of the period to 30 June 2014 was achieved with a total dividend of 6.10 pence per share paid to shareholders in respect of the period."
This one has moved onto more of a premium than ESP with the current share price trading around 10% above its September NAV according to their website, which you can visit by clicking the highlighted name link above.
So there you go a couple ways to play student accommodation for you to study if that appeals to you. Meanwhile see today's Advent Calendar to see some tenants you wouldn't want to deal with.