Empiric Student Property - ESP Stream Log

They did say at the recent presentation that would be off loading a couple of properties at higher than valuation.

I used to have a large holding in ESP, bought at a couple of the fund raisings last year. However, I sold out, not because of the Brexit story but because 1. I was concerned when the finance director recently resigned, 2. The management incentive scheme looked greedy, given the size of company and what was already in place, in my opinion and was not backed by blanket vote from shareholders when it was passed, 3. the portfolio revaluation gains have been a significant part of dividend, which has until now not been covered by earnings (ie from my understanding the capital raises have been used to fund the headline 6p dividend). 4. another fund raising is due, the problem they have is to get large oversubscription is harder given last was @107 and share price not that much higher now.

I'm not so sure that there will be a further IPO imminently. I don't have the numbers to hand but from recollection they said they would raise £165m in equity over 12 months from 1 March 16, of which they raised £125m in mid March 16, ie only £40m left which I imagine could be more cheaply raised by a institutional placing then new public offer. I'm not clear if the original 165m can be increased or not. Also, given target LTV of 35% and low yields on offer they might go for more loans, similar to today's announcement. That said I'm a holder as this is a great asset back index linked quasi bond, when all bonds are sky high.

I thought they said that div would rise by at least RPI, so would hope might be looking at 6.25p for next year as developments start to kick in. Either way this looks attractive to me as a asset backed index linked bond. Also, pays much more than Unite and GCP student living, although if I am correct they are both not REITs. Interesting to see Unite's yield when it does convert. One thing I am not sure about is lack of information regarding new developments, seems to have gone very quiet post Brexit but maybe to be expected.

Back to normal behavior for stock price I guess, ie large trade closing auction on the offer price. I would not want to be short this one as the large holders seem solid and I cannot imagine trying to work an order to buy back 16m in market. Lack of information as to price move drivers available on some stocks of about 500m market cap is infuriating!

Stock loan suggests being shorted. Certainly strange movement compared to recent strength when looked like going above 116p. At last investor presentation they specifically answered a question that would not be significantly impacted by brexit so I'm not too worried about that. Don't see logic in shorting this stock as asset backed and a nice 6p dividend. Also, to close it out will not be that easy. Has not been much recent news re developments but would expect they are holding off until after vote. Interesting to see how this one goes, I'm tempted to top up but as always in such a drop will probably not have the bottle!

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Also, the most they can raise in the year to March 2017 is a further £40m (share issuance programme was for 165 and 125 already raised). And soon an aditional div of 1.5p per quarter should be announced. I like the share as high yield, asset backed in a good segment, premium accomodation of a growth market (student accomodation) and non-London based. Wish I had bought more at recent offer, but from calculation as below I am not sure that Iwill be able to wait for next offer. Any thoughts?

I am a small holder and like the look of the share. By a back of the envelope calculation, they raised £125m equity in march, plus loan of £80m (and there was a £40m Canada Life loan from 1st March), and they have spent about £100m since the equity raise, ie they still have £105 to £145m free to invest.