Empiric Regulatory News (ESP)

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THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN THE COMPANY OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES. ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE PROSPECTUS PUBLISHED BY THE COMPANY.

1 March 2016

Empiric Student Property plc

("ESP" or the "Company" or, together with its subsidiaries, the "Group")

PROPOSED ISSUE OF EQUITY

The Board of Directors of Empiric Student Property plc (ticker: ESP) announces the proposed issue of up to 165 million new Shares through a share issuance programme over the next 12 months (the "Share Issuance Programme") in order to achieve the Group's stated objective to acquire 10,000 modern, direct-let, premium student accommodation beds across the UK. The initial tranche of the Share Issuance Programme comprises a Placing, Open Offer and Offer for Subscription at a price of 107.5 pence per Share (the "Issue Price") to raise target gross proceeds of £90 million (the "Initial Issue").

The Directors believe that, since the Company's IPO in June 2014, the Group has made excellent progress in successfully implementing its investment strategy by acquiring a diverse portfolio of high quality student accommodation properties (both operational and in development) in central locations in prime student cities and towns across the UK. These assets have been acquired at attractive net initial yields which the Board expects to generate good returns for the Group.

The Directors believe that the underlying fundamentals of the Group's market in modern, premium student accommodation are solid reflecting increasing demand coupled with a supply shortage. Notwithstanding the introduction of tuition fees, the number of students studying in the UK has continued on a growth trend. In particular, following the removal of the cap on student numbers in 2015/2016, the growth in numbers of international students is expected to accelerate, and it is international students together with postgraduates which comprise the Group's primary target market.

The Property Portfolio currently comprises 5,686 beds across 58 assets in 26 top university cities and towns. This includes 39 operating properties (3,218 beds), five forward commitments (712 beds), 11 forward funded assets (836 beds due for completion by September 2016 and 428 beds due for completion by September 2017) and three developments (492 beds).

The Company has identified a strong pipeline comprising a mix of operating properties and properties under development across multiple locations in the UK representing, in aggregate, over 4,000 beds. Accordingly, the Company expects to commit the net proceeds of the Initial Issue by July 2016.

The Company is therefore launching the Share Issuance Programme to raise further equity funds which, when combined with available and proposed future debt, will allow the Group to acquire further student accommodation assets in order to achieve its stated objective.

The Company currently has drawn debt facilities (excluding the Group's share of joint venture debt) of £103.2 million, representing 20.3 per cent. of Gross Asset Value as at 31 December 2015. The Company is in negotiations to secure additional bank facilities in order to assist in financing the current pipeline as described above.

Issue Highlights

· The Initial Issue, which is not underwritten, comprises the Placing, Open Offer and Offer for Subscription of, in aggregate, 83,720,930 new Shares at the Issue Price of 107.5 pence per new Share (based on the target size of £90 million).

· The Issue Price represents a discount of 2.9 per cent. to the closing price of 110.75 pence per Share as at the close of business on 29 February 2016 and a premium of 3.5 per cent. to the unaudited basic Net Asset Value per existing Share (as at 31 December 2015), net of the second interim dividend noted below.

· The new Shares will rank pari passu in all respects with the existing Shares, save in respect of the second interim dividend of 1.5 pence per Share declared today for the period 1 October 2015 to 31 December 2015.

· Under the Open Offer, up to an aggregate amount of 55 million new Shares will be made available to Qualifying Shareholders at the Issue Price, pro rata to their holdings of existing Shares, on the basis of 1 New Share for every 7 existing Shares held on the Record Date.

· The balance of new Shares to be made available under the Initial Issue, together with new Shares not taken up pursuant to the Open Offer, will be made available for subscription under the Excess Application Facility, the Placing and the Offer for Subscription.

· The Placing and Offer for Subscription are subject to scaling back at the discretion of the Directors. The Open Offer is not subject to scaling back in favour of the Placing or the Offer for Subscription.

· Application will be made for the new Shares to be admitted to the premium segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities.

Dividends

The Company has today declared a dividend of 1.5 pence per Share for the period 1 October 2015 to 31 December 2015 to Shareholders on the register on 11 March 2016. The dividend is expected to be paid on or around 23 March 2016.

The Company is targeting an annual dividend of 6 pence per share for the year-ending 30 June 2016(1). Thereafter, dividends are expected to grow by at least the RPI inflation index(1).

Note:

(1) The target dividends stated above are targets only and not forecasts. There can be no assurance that these targets will be met and they should not be taken as an indication of the Company's expected or actual future results. Potential investors should not place any reliance on these targets and any investment decision should be made exclusively on the basis of the Prospectus.

Net Asset Value and Valuation

As at 31 December 2015, the unaudited basic Net Asset Value per Share was 105.4 pence. This compares to the audited Net Asset Value per Share as at 30 June 2015 of 103.2 pence. For the purposes of calculating the unaudited Net Asset Value the Company's Property Portfolio has been independently valued as at 31 December 2015.

FTSE EPRA/NAREIT Indices

It is anticipated that the Company will become eligible for inclusion in the FTSE EPRA/NAREIT indices following the annual index review in March 2016.

Benefits of the Share Issuance Programme

The Directors believe that the Share Issuance Programme has the following principal benefits for Shareholders:

· the net proceeds of the Share Issuance Programme will be used to invest further in student accommodation assets which will enable the Company to grow the total number of beds in the Property Portfolio thereby adding further diversification to its property assets;

· it allows the Company to tailor future equity issuance to its immediate pipeline, providing flexibility and minimising cash drag;

· it enables the Company to raise additional capital quickly, in order to take advantage of discrete pipeline investment opportunities;

· an increase in the size of the Company is expected to improve liquidity of its Shares. This may enhance the marketability of the Company and may result in a broader investor base over the longer term;

· an increase in the size of the Company will mean that the fixed costs of operating the Company are spread over a larger asset base, thereby reducing the Company's on-going charges per Share; and

· the Initial Open Offer provides qualifying Shareholders with the ability to invest in the Company without incurring stamp duty or dealing costs or paying the current market premium for acquiring Shares in the secondary market.

It is intended that all new Shares under the Share Issuance Programme (including the Initial Issue) will be issued at a premium to the prevailing Net Asset Value per Share, after related costs have been deducted.

Share Issuance Programme

The Company intends to issue up to 165 million Shares pursuant to the Share Issuance Programme in tranches ("Tranches"). Shares will only be issued at times when the Company considers that suitable investments in accordance with the Company's investment policy will be capable of being acquired within the near-term. Each Tranche will comprise a placing on similar terms to the Initial Placing and may, at the discretion of the Company, in consultation with Jefferies, comprise an open offer component on similar terms to the Initial Open Offer and/or an offer for subscription component on similar terms to the Initial Offer for Subscription.

The Share Issuance Programme is flexible and may have a number of closing dates in order to provide the Company with the ability to issue Shares on appropriate occasions over a period of time. The Share Issuance Programme is intended to raise sufficient equity proceeds to achieve the Group's stated objective to acquire 10,000 modern, direct-let, premium student accommodation beds across the UK in accordance with the Company's investment policy.

The total net proceeds of the Share Issuance Programme will depend on the number of Shares issued throughout the Share Issuance Programme, the issue price of such Shares, and the aggregate costs and commissions for each Tranche.

The size and frequency of each Tranche, and of each placing, open offer and offer for subscription component of each Tranche, will be determined in the sole discretion of the Company in consultation with Jefferies.

Conditions

The issuance of each Tranche of Shares pursuant to the Share Issuance Programme (including the Initial Issue) is conditional upon inter alia:

· the passing of the resolutions at the General Meeting to be held on 17 March 2016;

· in relation to non-pre-emptive offerings, the applicable issue price being not less than the latest published Net Asset Value per Share;

· Admission of the relevant Shares issued pursuant to each Tranche; and

· the Share Issuance Programme Placing Agreement having become unconditional in respect of the relevant Tranche and not having been terminated in accordance with its terms or a particular Tranche not having been suspended in accordance with the terms of the Share Issuance Programme Placing Agreement.

In circumstances where these conditions are not fully met, the relevant issue of Shares pursuant to the Share Issuance Programme will not take place.

Prospectus and Circular

Further details of the Initial Issue and the Share Issuance Programme will be set out in the Registration Document, Securities Note and Summary which together constitute a prospectus (the "Prospectus") which, together with a Circular, are expected to be available today on the Company's website at www.empiric.co.uk and can be inspected at the offices of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU.

Copies of the Prospectus and the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

Any defined terms used in this announcement are as set out in the Prospectus and/or the Circular.

Expected Timetable

The dates and times specified in this announcement are subject to change without further notice. All references to times in this announcement are to London time unless otherwise stated. In particular, the Board may, with the prior approval of Jefferies and Akur, bring forward or postpone the closing time and date for the Issue. In the event that such date is changed, the Company will notify investors who have applied for Shares of changes to the timetable either by post, by electronic mail or by the publication of a notice through a Regulatory Information Service.

DEALING CODES

The dealing codes for the Shares, the Basic Entitlements and the Excess CREST Open Offer Entitlements are as follows:

For further information on the Company, please contact:

Further information on Empiric can be found on the Company's website at www.empiric.co.uk.

Notes:

Empiric Student Property plc is a leading provider of modern, direct-let, premium student accommodation across the UK. Investing in both operating and development assets, the Company focuses on quality, with assets generally in prime central locations in top university cities and towns in the UK, attracting international students and/or those studying beyond first year, in particular, postgraduates. For the 2015/16 academic year, Empiric's customer base comprised 69% international students from 98 countries. 78% of the Company's customers were students beyond their first year of study.

The Company, an internally managed real estate investment trust ("REIT") incorporated in England and Wales, listed on the premium listing segment of the Official List of the Financial Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in June 2014.

IMPORTANT NOTICE

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, South Africa, New Zealand or Japan. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer for sale of, or the solicitation of an offer or an invitation to buy or subscribe for, Shares to any person in the United States, Australia, Canada, South Africa, New Zealand or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The Company will not be registered under the US Investment Company Act of 1940, as amended. In addition, the Shares referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to or for the account or benefit of US persons absent registration or an exemption from the registration requirements of the Securities Act and in compliance with any applicable State securities laws. There will be no public offer of the Shares in the United States, Australia, Canada, South Africa, New Zealand or Japan.

The offer and sale of Shares referred to herein has not been and will not be registered under the applicable securities laws of any state, province or territory of Australia, Canada, South Africa, New Zealand or Japan. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Australia, Canada, South Africa, New Zealand or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa, New Zealand or Japan.

Jefferies and Akur are authorised and regulated by the Financial Conduct Authority. Each of Jefferies and Akur are acting exclusively for the Company and no-one else in connection with the Initial Issue and the Share Issuance Programme. They will not regard any other person as their respective clients in relation to the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

None of the Company, Jefferies, Akur and any of their respective affiliates accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, Jefferies, Akur and their respective affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.