Empiric Regulatory News (ESP)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, JAPAN, AUSTRALIA OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT OR ANY COPY OF IT.

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.

30 October 2014

Empiric Student Property plc

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

PUBLICATION OF PROSPECTUS AND CIRCULAR

The Board of Directors (the "Board") of Empiric Student Property plc (LSE: ESP) announces the publication of a prospectus today (the "Prospectus") in relation to the proposed issue of up to 300 million new Shares through a Share Issuance Programme over the next 12 months (the "Share Issuance Programme"), commencing with an initial issue of up to 65,000,000 new Shares through, inter alia, a Placing and Offer for Subscription at a price of £1.01 per Share (the "Issue Price") to raise gross proceeds of up to £65.65 million (the "Initial Issue").

The Company has successfully invested or committed substantially all of the net investable funds raised from its initial £85 million fundraising in a portfolio of 13 high quality purpose-built student accommodation properties, both operating and under development, in line with the Company's investment policy (with an aggregate of 1,211 beds). In addition to the recent exchange of contracts in relation to Alwyn Court (Cardiff) and Northgate House (Cardiff) assets, the Company is in final stage negotiations on two forward funded assets and one standing operating property representing a total commitment of approximately £30 million (with an aggregate of 337 beds). Subject to the satisfactory completion of negotiations, all of these assets are expected to be acquired by December 2014 and will be funded principally by the RBS Loan.

The Company is also in advanced stages of negotiation in relation to a near-term pipeline comprising 15 properties across the UK, with an aggregate of more than 1,800 beds representing a total commitment of approximately £180 million. This comprises a mix of operating properties and forward funded and development projects with a similar return profile to the current portfolio. Subject to the satisfactory completion of negotiations and available financing, the Company believes that all of the properties would be able to be acquired by the Group over the next several months, and by no later than the end of March 2015. It is anticipated that any commitments made to such pipeline assets will be financed by equity proceeds raised under the Share Issuance Programme, additional debt (whether pursuant to the RBS Loan or otherwise) or a combination of these.

Beyond the identified pipeline described above, the Company has a further pipeline of assets under consideration at earlier stages of due diligence and negotiation representing an additional potential commitment of approximately £400 - 600 million. 

The Company's stated longer term objective is to grow the Property Portfolio to a target size of 8,000 to 10,000 beds. The Company is therefore launching the Share Issuance Programme to issue, in aggregate, up to 300 million Shares in order to move closer to this objective.

The Board believes that the Share Issuance Programme will have the following principal benefits for Shareholders:

· the net proceeds of the Share Issuance Programme will be used to invest further in student accommodation assets thereby further growing and diversifying the Property Portfolio;

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

· it will enable the Company to raise additional capital quickly in order to take advantage of discrete investment opportunities;

· growing the Company will spread operating costs over a larger capital base, which should reduce the total expense ratio; and

· further issues of Shares could partially satisfy market demand from time to time for Shares and improve liquidity in the market for Shares.

Dividends

The Company expects to pay dividends totalling 2 pence per Share in respect of the period from IPO to 31 December 2014. The first interim dividend of 1.5 pence per Share was declared today in relation to this period with a record date of 7 November 2014. The Company expects the balance of 0.5 pence per Share to be paid following the period end and Shares subscribed pursuant to the Initial Issue will rank for this second interim dividend only and for any dividends declared thereafter.

The Company expects to pay dividends of at least 2 pence per Share for the first six months of 2015 and will target an annual dividend of at least 6 pence per Share for the financial year commencing 1 July 2015. Thereafter, dividends are expected to grow by not less than inflation (1). The Company's stated intention is to pay these dividends on a quarterly basis.

Circular

The Company has also posted a Circular to Shareholders today (the "Circular") convening the General Meeting at which Shareholders will be asked to approve, inter alia: (i) the Directors' authority to issue and allot Shares in respect of the Share Issuance Programme; and (ii) the participation of certain related parties in the Share Issuance Programme (as described in further detail below).

Related Party Transaction

East Riding of Yorkshire Council Pension Fund ("East Riding Pension Fund"), SG Hambros Bank Limited ("SG Private Banking") and CCLA Investment Management Limited ("CCLA") (together, the "Related Parties" and each, a "Related Party") are each a related party of the Company for the purposes of the Listing Rules because they are 'substantial shareholders', each holding 10 per cent. or more of the issued share capital of the Company.

As at 29 October 2014 (being the latest practical date prior to this announcement):

(a) East Riding Pension Fund held approximately 18 per cent. of the issued share capital of the Company.

(b) SG Private Banking held approximately 12 per cent. of the issued share capital of the Company.

(c) CCLA held approximately 10 per cent. of the issued share capital of the Company.

Under the Listing Rules, unless a relevant exemption applies, when a company issues shares to a related party, there is a requirement to obtain shareholders' approval for that transaction.

If further Shares are placed with any of the Related Parties pursuant to the Share Issuance Programme (at any time during the period in which the Share Issuance Programme is open), the Company may be required to seek Shareholder approval. The Company, in consultation with Jefferies, has agreed that it would be desirable to have the ability to place Shares with each of the Related Parties under the Share Issuance Programme without requiring a Shareholder vote on each such occasion. Accordingly, the Directors are proposing certain resolutions at the General Meeting, the effect of which is to permit the Company to place Shares pursuant to the Share Issuance Programme with each of the Related Parties.

Note:

(1) The target dividend yield and dividend are targets only and not profit 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.

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

Further details of the Initial Issue and the Share Issuance Programme are set out in the Prospectus, which, together with the Circular, will be available today on the Company's website at www.espreit.co.uk and can be inspected at the offices of Wragge Lawrence Graham 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.

For further information on the Company, please contact:

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

Notes:

Empiric Student Property plc (incorporated in England & Wales) is an internally managed real estate investment trust ("REIT") investing in modern, premium student accommodation, with a focus on quality and with assets generally in prime central locations in top university cities and towns in the UK. The Company 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 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.