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Latest from UCAS - plenty of UG students and it is still early days - Not sure of Post Grad numbers but reasonable to expect similar.
2018 2019 2020
UK 353,960:348,890:358,860
EU 26,400 : 26,440 : 22,430
RoW 31,510 : 34,310 : 34,310
tot 411860 : 408960 : 415600
Further confirmation from UCAS today that UK degree student numbers are up: EU numbers are down by 2k but this is more than made up for by RoW such that total overseas students are up by 2k. Hopefully the accommodation should start filling up quickly now.
From todays Unite update-
'Most undergraduate applicants have now chosen their preferred University for 2020/21, following the 18 June deadline for accepting an offer. UCAS data showed a 1% increase in the number of applicants with an offer to start University this Autumn compared to 2019/20. This reflects a 3% increase in acceptances by UK 18-year olds as increased participation rates more than offset the impact of fewer young people in the population.
The number of students with a deferred start date was down 1% compared to 2019/20 as of 18 June, reflecting the clear desire of young people to attend University, weaker employment prospects and fewer gap year opportunities for school leavers.'
This fits with what I was hearing from prospective UK students.
I had been holding off opening a holding here again (I jumped out in Feb) but started buying again now
Talking to some students who were due to start next year I was surprised at how many were not deferring, mainly as they saw that getting a temp job or travel was going to be problematic. Also the uni's have been saying that they would not defer places just because of covid, so next year would see a lot of competition for places.
What really swung it was taking to someone in admin at one of the top london uni's (an area most important for DIGS), I found out that they have had a big increase in the number of Chinese applicants for Post Grad courses to the extent that they will be pushed for places on the courses next year. They have all paid up deposits so these are not speculative applications.. Not sure why this is - may be the tensions with the US and Australia is having an impact, I had been expecting the latter to be the beneficiary extra students due to covid but surprisingly it may be the UK.
No it's not. Firstly it's not a REIT, secondly it's as reliant on construction as it is on rental income, and finally, it doesn't just have student accomodation.
Bear - nice post, I agree with much of that, but more positive on Empiric here (which I started buying at 80p).
Worth a look WJG. Same sector, nice family run company.
Matt
Today I have sold over half my Digs shares its been a good run since buying at just over 107p but feel they are now toppy, trading well above NAV, with Divi of 3%
I already own 3 x more Empiric (at 108) so not adding there as excluding divs still sitting on a capital loss, a poor investment compared to Digs but thankfully the 5% div over the years means not an overall loss/washout.
Medium term ESP may have more upside than DIGS, as trading below NAV, 5% div , new management has turned it round and bringing letting in house through Hello Student has cut costs dramatically, though they still need to improve occupation levels to nearer 100% from 92%, further improve profits and get dividend fully covered for the SP to climb much further. Bear
Just below £2, now looking pricey. I'm going to switch some into Empiric. Also 100% student housing, slightly riskier, with worse balance sheet, but trades at a discount to NAV and yields over 5%. Anyone else?
Really thanks for that. You confirmed my take too.
But you done real well - its been on a great run and that is probably how I found it by chance. But I think that I am too late for this run and as with other REITs I would not be surprised to see a big pull back shortly.
Cheers
Since my previous post I sold out and invested elsewhere. The share price has done really well but the dividends haven't followed as yet. I try to keep the total yield on my portfolio of quarterly dividend payers above 5.2%. Buying back into DIGS at the moment would produce a yield of under 4 percent, so I am hanging back until something changes. It does worry me when I travel to cities and see massive tower blocks going up. You look what they are going to be and it is always "luxury" student apartments. Bournemouth, Brighton, Sheffield. I am not sure how long this can go on. It's a bit different to the ten students in a terraced house of a few years ago.
I like the looks of DIGS. I was close to buying earlier. But I noticed the high price markup in relation to the NAV. What are your thoughts? Could there be an asset bubble in the making here...
I agree, there are a few shares in my portfolio that I intended adding to, but as that price rises, the yield becomes unattractive. PHP and London Metric are a couple of examples. At least DIGS intend lifting the dividend.
I've been in this a couple of years - Nice stock. Income, NAV and Divvy growing steadily. However, now at a 10% premium to Nav, and the divvy down at 3.6%. Still good holding for the long term, but I wouldn't be adding here.
This may help the share price a little.-
Millennium & Copthorne Hotels (UK, 0562254) will be deleted from the FTSE 250 Index.
GCP Student Living (UK, B8460Z4) will be added to the FTSE 250 Index and removed from the FTSE SmallCap Index.
All changes effective from 18 September 2019.
NAV 136p, share issue underway at 140p. Looks a bit over-priced to me.
I have increased my investment here. I am attracted by the good rental occupancy rates and yields, and as they add more capacity the overheads hardly need to increase at all. So as I see it, good profit growth prospects....PLUS likely increasing capital value of the property value. The only negative Insee is low liquidity for shareholders, albeit with an increasing capital base to fund portfolio growth that should diminish. A "hold" for me.
Well Lance, there hasn't been much progress since.
I have been steadily building a position here too and have been delighted with progress and stability .
I started buying at around 108 and have reinvested my dividends in more shares ever since. GCP has performed well the Nav is just a few pence below the share price and both have grown over 20% since I got in and it has a dividend of around 4.5% which I let ride by reinvesting in more shares. Very happy punter
What a great steady share this is! keep looking for the dip to top up, but will just buy some more as this does not oblige!
Good to see the second director in two days buying shares in addition to the major holders declaring recently, the latter are in for a steady return (see previous post) with little excitement.
Today I bought DIGS for my ISA (my purchase at 105p showed as a sale) as an 'alternative investment' to my other investments in shares as even though it is a share it should display more of the characteristic of an inflation linked bond. As a REIT (real estate investment trust) it has to pay out 90% of net income as a dividend. GCP believe that this should be around 5.5% of the launch price of 102p and seems to be planning quarterly payouts of 1.35p for 2014. These payouts should rise in line with inflation as the rents charged to the students will also rise with inflation. The NAV will be largely determined by the rental return so it too will rise as rents rise, it is unlikely rents will fall - unless we have prolonged deflation or unless there is an oversupply of quality student accommodation in London both of these seem unlikely. NAV may fall as interest rates rise if that leads to a higher expected return from rental of property. A squeeze on net income may also come from rising interest rates as about 30% of Digs is borrowed money, though most of the borrowings are hedged for a couple of years. DIGS SP will not rise rapidly but should remain fairly stable linked to underling NAV rather than the general stock market.