Results for the six months to 30 June 2017

RNS Number : 4363Q

Empiric Student Property PLC

12 September 2017

Empiric Student Property plc

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

Results for the six months to 30 June 2017

The Board of Empiric Student Property plc (ticker: ESP), the owner and operator of modern, premium student accommodation across the UK, today announced the Company's unaudited results for the six months to 30 June 2017.

Financial Highlights

	As at 30 June 2017	% change on six months to 31 December 2016
Portfolio valuation	£817.9m	+13.4%
NAV per share (basic)	105.81p	-0.08 %
Dividend declared per share	3.05p	0%
Gross annualised rent*	£53.8m	+3.3%
Adjusted EPRA earnings per share	1.05p	+45.2%
Revenue	£24.5m	+27.3%
Earnings per share (basic)	2.89p	-14.6%
EPRA earnings per share	0.29p	-24.3%

· 3.05 pence dividend paid for the six months ended 30 June 2017 (3.05 pence for the six months ended 31 December 2016)

o Target dividend for the period to 31 December 2017 of 6.1 pence per share¹

o Operating profit of £20.2 million (H2 2016: £20.2 million)

o £24.5 million rental income from standing assets (H2 2016: £19.2 million)

· £13.0 million revaluation gain (H2 2016: £14.5 million)

· NAV per share (basic) of 105.81 pence

· 0.08% decrease from a NAV of 105.90 pence (basic) as at 31 December 2016 net of all property acquisition costs

· Loan to value ("LTV") ratio at 30 June 2017 of 36.0%, with a weighted average term to maturity for the debt of 7.1 years and weighted average interest payable of 3.42%

· Agreed a new £10 million three year unsecured loan, which has been drawn down

· Total property portfolio valuation of £817.9 million as at 30 June 2017 (31 December 2016: £721.3 million)

· Total valuation uplift of £96.6 million (13.4%) for the period compared to 31 December 2016

* Gross annualised rent includes commercial revenue and marketed student revenue for the academic year at 100% occupancy.

¹The figures in relation to prospective dividends set out in this report are not intended to be, and should not be taken as, a profit forecast or estimate, or a dividend declaration.

Operational Highlights

· 90 assets in 30 prime university cities and towns at 30 June 2017, 75 of which were operational and 15 more for later years (31 December 2016: 89 assets)

· 6,833 operational or revenue generating beds at 30 June 2017 with additional 758 due to be operational for the 2017/18 academic year, and 1,171 for later years

· One new operating asset and one forward funded asset contracted in the period comprising 326 beds

· Assets on the Hello Student® platform increased by 20 to 56 during the period. Hello Student® will be marketing and/or managing 61 operational buildings for the 2017/18 academic year

· Gross annualised rent on 84 operating properties of £66.8 million for the 2017/18 academic year (31 December 2016: £52.1 million). Targeted average annualised rental uplift of 2.8% for the 2017/18 academic year

· Average valuation yield of 5.8% (31 December 2016: 5.9%) and acquisition yield of 6.9% (31 December 2016: 6.5%) for the operating properties

Post Period End Highlights

· Raised gross proceeds of £110 million through the issue of 100,917,432 shares at 109 pence per share, reflecting strong support from existing and new shareholders

· Exchanged contracts/acquired. A standing asset (50 beds) and development site in Canterbury, the St Mary's hospital site in Bristol (100+ beds), Hahnemann Building, a standing asset in Liverpool (98 beds), and the King's Stables Road forward funded development in Edinburgh (166 beds)

The Rt Hon Baroness Dean of Thornton-le-Fylde, Chairman of Empiric Student Property plc, commented:

"More students demanding a bed in purpose built accommodation coupled with pressures on local housing markets means that demand for PBSA remains strong. The details of the UK's exit from the European Union remain unclear but the UK Government recognises the importance of the continued success of the higher education sector. Around 23% of students in the UK are international, of which nearly 7% are from the EU. Many are postgraduates who come to the UK for 12 months or less, which means they should not be affected by post-Brexit limits on immigration, which would apply to those coming here for more than one year.

The student accommodation market remains highly attractive and we have the strategy, pipeline, financial resources, management team and people to continue to grow the business successfully in the second half of the year and into the future. In summary, we are optimistic about Empiric's prospects in the remainder of 2017 and beyond."

For further information on the Company, please contact:

Empiric Student Property plc	(via Newgate below)
Paul Hadaway (Chief Executive)
Tim Attlee (Chief Investment Officer)
Lynne Fennah (Chief Financial Officer)

Akur Limited (Joint Financial Adviser)	Tel: 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant

Jefferies International Limited (Joint Financial Adviser and Broker)	Tel: 020 7029 8000
Gary Gould
Stuart Klein

Newgate (PR Adviser)	Tel: 020 7680 6550
James Benjamin	Em: empiric@newgatecomms.com
Anna Geffert
Lydia Thompson

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

A meeting for investors and analysts will be held at 9:30am today at:

Newgate

Sky Light City Tower

50 Basinghall Street

London, EC2V 5DE

In addition, The presentation will also be accessible via a live conference call and on-demand via the Company website: www.empiric.co.uk/investor-information/company-documents.

Notes:

Empiric Student Property plc is a leading provider and operator of modern, direct-let, nominated or leased student accommodation across the UK. Investing in both operating and development assets, Empiric is a multi-niche student property company focused on, (i) providing good quality first year accommodation managed through its Hello Student® operating platform in partnership with universities, (ii) offering a variety of second and third year purpose built accommodation options for individual students and those wanting a group living environment, and (iii) continuing to expand the Group's existing premium, studio-led accommodation portfolio which is attractive to international and postgraduate students.

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.

Chairman's Statement

The last six months have been a period of consolidation for Empiric, during which we embedded the many acquisitions and developments we undertook in the previous period. We continued to migrate buildings to Hello Student^® and build a significant pipeline of potential acquisitions.

At the same time, we positioned ourselves well for the next phase of growth, identifying an attractive pipeline of investment opportunities. Since the period end, we have raised £110 million of equity finance, enabling us to acquire a further four assets by the date of this report.

Overview

Growth in the portfolio was modest during the period, as we acquired one standing asset and one forward funded development. We also purchased Revcap Adviser's¹ 50% share in the Willowbank joint venture in Glasgow. At the end of the period, Empiric owned or had committed to a portfolio of 90 buildings with 8,762 beds, spread across 30 towns and cities (31 December 2016: 8,504 beds across 89 buildings).

The portfolio was independently valued by CBRE at 30 June 2017, at an aggregate value of £817.9 million (31 December 2016: £721.3 million). This reflects a valuation increase of £96.6 million, or 13.4%. Of the total portfolio, 75 assets comprising 6,833 beds were operational and fully let² for the 2016/17 academic year. Following good progress with our forward funded developments, we expect 84 assets with 7,841 beds to be operational for the 2017/18 academic year. The gross annualised rent is approximately £66.8 million for September 2017 (31 December 2016: £52.1 million). We are targeting an annual rental uplift of 2.8% for the coming academic year.

Hello Student^® continues to mature, with the number of assets being managed or marketed through the platform increasing by 20 to 56 during the period, rising to 61 post period end, representing 73% of the assets that will be operational in the 17/18 academic year. These buildings have 5,757 beds in total (31 December 2016: 3,075 beds across 36 buildings). Our aim is for all the buildings we currently own to be on the platform by September 2018. Bringing more assets under the management of Hello Student^® will drive greater cost efficiency and gives us the benefit of high-quality, directly employed managers, who have a vested interest in the success of their building and who invest in a vibrant student community.

We secured a further debt facility of £10 million during the period. This was our first unsecured loan at the Company level, reflecting the maturity of the business. We also extended the terms on two development facilities totalling £63.4 million. At 30 June 2017, the Group had drawn down debt of £303.8 million, resulting in an LTV of 36.0% (31 December 2016: £243.9 million and 31.1%).

Dividends declared in respect of the period totalled 3.05 pence per share. Of this, 2.098 pence has been paid as a Property Income Distribution under the UK Real Estate Investment Trust rules. The underlying operational performance has been satisfactory for the half year to 30 June 2017. The result for the period has been affected by certain one-off items which have adversely impacted the result for the half year. Our dividend target for the full year remains at 6.1 pence per share. However, based on the half year result, the dividend for the full year is now not expected to be substantially covered by adjusted EPRA earnings per share. Nevertheless, the outlook remains positive and our priority remains to achieve a fully covered dividend from operations, whilst continuing to invest to achieve our total return target.

1 Revcap is a specialist real estate investor operating in selected northern and western European markets. In August 2014, the Group entered into the 50:50 joint venture arrangement with Revcap to redevelop the former Willowbank Primary School site.

2 Meaning an occupancy and/or income level of the operating portfolio of 97% or more.

Future Growth

This is the first reporting period since shareholders approved our revised Investment Policy in December 2016. We are making progress with our strategy of acquiring or developing a broader range of student accommodation building types, which cater for students from first year undergraduates to postgraduates, from different economic backgrounds, and from the UK and overseas. This strategy allows us to go deeper into each city, building communities and creating operating efficiencies for us. A greater range of property types also enables students to move from one building to another within a city, as their needs change, or to move to another Empiric building elsewhere in the country.

We have built the first premium townhouses at Bonhay Road, Exeter; the University of Exeter has taken the ten, 6-bed townhouses for the forthcoming academic year. As part of our redevelopment of Victoria Point, Manchester, we are piloting some affordable apartments.

Our pipeline of acquisitions and developments includes our core portfolio of studios and premium small group accommodation, as well as townhouses, affordable apartments and opportunities to work directly with universities. To enable us to capitalise on this pipeline, we raised gross proceeds of £110 million through an equity issue in July 2017. Up to the date of this report, this had financed a further four acquisitions totalling £51.2 million (excluding costs). These include an asset in Canterbury, which has five existing townhouses and the potential to develop a mix of studios, two and three bed apartments, and six bed townhouses. We have also acquired a 98-bed studio building in Liverpool, a development site in Bristol and a forward funded development in Edinburgh.

These acquisitions, plus the developments that have completed this year, give us unencumbered assets against which we can raise further debt finance towards the end of 2017. This will give us the resources to make additional acquisitions, after we have fully invested the latest equity capital and keep the level of gearing on target.

The portfolio we have built up also gives us redevelopment opportunities to drive greater capital values and income from a number of our existing assets. When redeveloping assets, we have the freedom to choose the time that suits us best, which is a key advantage compared with acquiring standing assets or new developments, when timing is determined by when they come to the market.

Our growth strategy is underpinned by our newly established in-house research function, which is our market intelligence system feeding into the activities of the business and regularly reporting to the Board. This enables us to target our strategy and investments with increased precision.

Ensuring the Safety of our Customers

The health and safety of our students is paramount. As a responsible owner and operator of student accommodation, I am pleased to report that none or our buildings fall within the "at risk" definition in the Department for Communities and Local Government letter sent to all large residential building owners on 20 June 2017 after the fire at Grenfell Tower. Empiric's construction specifications and acquisition checks are in excess of Building Regulation standards. To provide additional comfort, an independent review of all buildings has been carried out and preliminary reporting received. More information can be found in the Executive Directors' Management Report.

Shareholders

We are grateful to have a supportive shareholder base and regularly engage with our investors to ensure they remain informed of our plans and progress. We also hold visits to our developments, which included sites in Nottingham, Glasgow and Leicester in the reporting period. Empiric remains committed to dialogue with all of our shareholders and we will maintain our ongoing programme of updates, presentations, meetings and visits.

Board, Management and Staff

Michael Enright resigned from his position as Chief Financial Officer ("CFO") of the Company on 14 March 2017, for personal reasons. We wish him well for the future.

We were delighted that Lynne Fennah joined us as CFO and as a member of the Board on 26 June 2017. She is a chartered accountant with over 30 years' experience including significant experience in real estate and specific knowledge of the hospitality sector, which will be invaluable as we continue to grow the Group and deliver increased operational efficiencies through Hello Student^®. Lynne's appointment helps to ensure that we have the Executive team we need for the next stage of Empiric's growth.

Outlook

More students demanding a bed in purpose built accommodation coupled with pressures on local housing markets means that demand for PBSA remains strong.

The details of the UK's exit from the European Union remain unclear but the UK Government recognises the importance of the continued success of the higher education sector. Around 23% of students in the UK are international, of which nearly 7% are from the EU. Many are postgraduates who come to the UK for 12 months or less, which means they should not be affected by post-Brexit limits on immigration, which would apply to those coming here for more than one year.

We welcome the Government's Migration Advisory Committee's study, launched in August to review the contribution of international students to the UK, which is due to be published in September 2018.

In summary, we are optimistic about Empiric's prospects in the remainder of 2017 and beyond.

The Rt Hon the Baroness Dean of Thornton-le-Fylde

Chairman, 12 September 2017

Strategy

We have a well-defined strategy, which is designed to maximise our platform to drive returns by selectively consolidating, broadening and diversifying Empiric's exposure across a wider spectrum of the student accommodation market that is currently underserved.

Locations

Objectives

· Selectively invest in 36 towns and cities

· Create efficiencies in locations with existing assets, plus some additional leading university locations

· Develop in-house metrics of university performance and trajectory, to refine product types and assess locational risk

Progress in the period

· Completed five developments for the 2017/18 academic year, all in locations where we already have assets

· Created an in-house research function, giving us a much deeper understanding of individual locations and the demand for different product types

· Expanded the Hello Student^® platform, giving us operating efficiencies in locations with multiple assets

Buildings

Objectives

· Continue to purchase core assets

· Increase development options

· Diversify income between different markets and product types, to spread operational risk and increase efficiencies

Progress in the period

· Acquired one new standing asset (220 beds), one forward funded asset (106 beds) and Revcap's 50% interest in the Willowbank joint venture

· Trialled premium townhouse concept in Exeter and let the development to the university for one year

· Piloting the affordable apartment concept in Victoria Point, Manchester

· Post period end four acquisitions have been made, in Canterbury, Bristol, Liverpool and Edinburgh

Management

Objectives

· Build gross income

· Grow at a sustainable rate

· Improve operational efficiency

· Provide the majority of operational functions in-house

· Reduce marketing costs per asset

Progress in the period

· Moved 20 assets onto the Hello Student^® platform, driving operating efficiencies, creating marketing synergies for assets in the same city and increasing traction of the Hello Student^® booking website

· Increased future gross income by acquiring a standing asset and successfully progressing six developments, which will be operational for the next academic year

· New CFO and Director of Research and Development

· Introduced new accounting system to give us more granular control of costs

Brand

Objectives

· Improve the student experience through a consistent and high-quality approach to branding, operation and management through the Hello Student^® platform

· Build on the Hello Student^® consumer brand and capture first year students as new customers and then provide a "fresher-to-PhD" accommodation and service offering

Progress in the period

· 56 assets with 5,757 beds being marketed by Hello Student^® for 2017/18 academic year

· Hello Student^® operating in 21 cities at period end and now in 22 cities, up from 17 at 31 December 2016

· Continued to make progress towards a "click-click-book" booking system

Customers

Objectives

· Enable loyal customers to move building to building and city to city but keep them attracted to an Empiric building

· Attract wider range of student from fresher to PhD with extended offering

Progress in the period

· Hello Student^® website traffic grown 420% year-on-year*

· Conducted Voice of the Tenant research, to understand how Hello Student^® is perceived by students and how our buildings perform, enabling continuous improvement of our service and the student experience

· Achieved rebooking rates of 55% of tenants who continued living in the same building (from over 1,000 responses to survey)

· Increased number of UK 2/3 year students

* July/August 16 vs July/August 17

Shareholder outcomes

Objectives

· Improve profitability through lower cost base per city

· Mitigate potential risk of a single-niche approach and broaden growth opportunities

· Continue to grow a high yielding portfolio through development

Progress in the period

· Delivered significant growth in rental income compared with the six months to 30 June 2016

· Increased bed density in each city enabling cost efficiencies

· Developed a pipeline of immediate and near-term opportunities to acquire standing assets and forward funded and direct developments, including all target property types

Market Update

The fundamentals of the UK student accommodation sector remain positive, with excess demand and limited supply. Demand for full time undergraduate and postgraduate university education in the UK continues to rise, from both domestic and international students. This in turn creates a growing need for high-quality purpose-built student accommodation ("PBSA").

In 2015/16, there were 2.3 million students studying in the UK, of which 1.74 million were full-time students, who are most likely to need accommodation. Purpose-built accommodation (either university of privately owned) accounted for only 31% of provision for the full-time student accommodation market.

Student Numbers are Growing

Despite the increase in tuition fees in 2012 demand for UK university places continues to considerably exceed supply. The Government removed caps on student numbers in 2015/16, contributing to acceptances onto undergraduate courses for 2016/17 reaching an all-time high with a 56% increase over 2002. The applications to acceptances ratio remains strong.

On A-level results day in August 2017, total first year undergraduate acceptances were down 2% on 2016 and EU acceptances were down 3%, but in both cases were still the second highest ever recorded. Non-EU student acceptances rose 4% on 2016.

More Students have been attracted from Overseas

International student numbers have been rising consistently and represent a source of continued recruitment. According to UNESCO¹, in 2013 the UK attracted 10% of the 4.1 million students leaving their home country to study, second only to the US which attracts 19%. Increased competition from other destination countries such as Australia, Canada and Germany will continue to affect the UK's market share, but the global middle classes will grow in both size and aspiration.

Growth in Global Student Mobility

International students are an important source of demand for premium PBSA and the number of students studying outside their home countries is expected to reach 8.1 million by 2025². Many international students are postgraduates on courses of 12 months or less, meaning they are not classified as immigrants in UK immigration statistics.

¹http://www.uis.unesco.org/Education/Pages/international-student-flow-viz.aspx

² OECD.

The 36 towns and cities we are targeting are home to the most successful universities and have seen student numbers rise faster than the national average.

Demographic Trends are Favourable

Rising student numbers have been driven by increased participation. For 2016/17, 38% of A-level students applied to university, up from 37% in 2015/16. The number of 18 year olds in the UK will reach a low in 2020, after which it will rebound sharply. This is likely to increase demand for higher education still further.

We are Targeting the Fastest Growing Towns and Cities

Student demand for the best education, coupled with competition between universities, is polarising universities into winners and losers. The 36 towns and cities we are targeting are home to the most successful universities and have seen student numbers rise faster than the national average. These high-quality institutions are also attracting growing numbers of students from outside their local area, who need accommodation. Students studying close to home generally attend less successful universities and their numbers have remained relatively flat.

Our Progress

Empiric has grown rapidly since its IPO, through a combination of successful investing in both operating and development assets as well as scaling up our Hello Student^® operating platform.

A Track Record of Growth

For the 2016/17 academic year, we had 75 standing assets with 6,833 beds. Including assets acquired since the period end, we expect to have 84 assets with 7,841 beds operational for the start of the 2017/18 academic year in September 2017. This follows the practical completion of assets currently under development, and two standing assets acquired. More information about our developments can be found in the Management Report.

We launched our operating platform Hello Student^® in February 2016. Since then we have progressively transferred standing assets from third-party managers onto the platform, and added development assets as they complete. For the 2017/18 academic year, 61 (or 73%) of our operational assets owned at the period end will be marketed or managed through Hello Student^®. Our aim is to transfer all assets to Hello Student^® in the long term.

Creating Value at Acquisition and Through Development

Since IPO, we have consistently demonstrated our ability to add value for shareholders by acquiring high-quality assets at attractive yields, by forward funding developments and by directly developing new assets. Direct and forward funded developments give us the opportunity to acquire assets at a discount to the price of a standing asset.

We see the opportunity to redevelop a number of assets in the portfolio, allowing us to increase their capital value and income irrespective of conditions in the property or financial markets.

What makes Empiric different

Empiric is the only large-scale, long-term investor in accommodation assets targeting second and third year undergraduates and postgraduates, in addition to first years. This "fresher-to-PhD" offer, in which we let directly to students, differentiates us from the majority of companies in our sector.

Our Investment Policy enables us to invest in our core of studio and premium small group assets, premium houses and affordable apartments, as well as building unique relationships with universities. These four different niches enable us to invest more deeply in each city, without cannibalising our existing assets.

Empiric has significant strengths that help us to compete effectively:

· Locations. We have 36 target locations, based on the strengths and performance of each university. We are highly selective, choosing attractive sites close to universities and city centres.

· Buildings. We buy buildings with character, that fit our strategic niches and where we can create future value. We have effective acquisition and development strategies, which have enabled us to build our portfolio rapidly since IPO, selecting buildings that are the right size for creating communities and which are clustered together for operational efficiency. We tailor designs and make innovative use of communal space.

· Operations. Through our Hello Student^® platform, we take a boutique approach to marketing and management. We focus on recruiting experienced and dedicated staff and empower them to feel ownership and pride in their building's success. We have strong relationships with universities and support their student accommodation needs directly and indirectly.

· Technology. We use bespoke and fit-for-purpose systems to support our operational, booking and accounting systems, underpinned by reliable supplier relationships.

Principal Risks and Uncertainties

The principal risks and uncertainties we face are described in detail on pages 42 to 47 of our Annual Report and Accounts for the six months ended 31 December 2016. The Audit Committee, which assists the Board with its responsibilities for managing risk, considers that those principal risks and uncertainties were unchanged during the period.

The principal risks and uncertainties described in the Annual Report and Accounts are summarised below:

Strategic Risks

· Development of the UK higher education market generally, or in specific regions

· Competition in the PBSA sector from UK and international property investors

Investment Risks

· General property and investment market conditions

· Dependence on both the rental income received from our properties and the appreciation in property values

Development Risks

· General development risks, including construction risks and changes in market conditions

· Delays or disruption to development projects that are outside our control

Funding Risks

· Adverse movements in interest rates

· Inability to secure further debt on acceptable terms

People Risks

· Reliance on performance of the Executive Directors

Operational Risks

· Inability to adapt to changing planning and regulatory environment

· Changes to the Company's tax status or UK tax legislation

· Inability to let commercial units

· Inability to maintain occupancy rates

· Significant health and safety incident

· Failure to reach lettings targets through Hello Student^®

· Information security breach

Management Report

This was an important period for Empiric, as we continued to expand our operating platform and position the Group for future growth. Our operational performance was satisfactory, with our operating assets remaining fully let¹ during the period. Demand for our accommodation is high ahead of the 2017/18 academic year.

1 Meaning an occupancy and/or income level of the operating portfolio of 97% or more.

Comparative Figures

The change in our financial year end from June to December has resulted in there being two comparative periods for this set of results - the six months to 30 June 2016 and the six months to 31 December 2016. We have compared our financial performance, our balance sheet and portfolio metrics against the corresponding position at 31 December 2016. (referred to below as H2 2016). From page 32 onwards of our Interim Report and Accounts, we have provided unaudited numbers for the six months to 30 June 2016 for further comparison.

Financial Performance

Operating profit for the first half of 2017 was £20.2 million (H2 2016: £20.2 million). This included revaluation gains of £13.0 million (H2 2016: £14.5 million), net of property acquisition costs, and rental income from standing assets of £24.5 million (H2 2016: £19.2 million).

Property expenses show underlying benefits from the migration of assets to the Hello Student^® platform. Empiric's increasing scale also allowed us to generate other efficiencies, for example through lower purchasing costs. As a result, and after including the cost of acquiring and mobilising one standing asset and one forward funded development in the period, operating costs started to return to historic levels. The net operating margin for the period was 60.4% (H2 2016: 57.6%).

Our share of results from joint ventures in the period was £0.06 million (H2 2016: £0.7 million).

Administrative and other expenses, which include the ongoing cost of running the business, were £7.6 million (H2 2016: £5.3 million). As the business grows, and one-off costs fall away, underlying efficiencies will reduce overheads. However, where we do add resource to support growth, the cost tends to increase in steps in advance of income.

Net financing costs for the period were £5.7 million, net of money market investment income and fair value gain on interest rate swap of £0.02 million (H2 2016: £4.0 million and £0.2 million, respectively).

Profit before tax was £14.5 million (H2 2016: £16.9 million). No corporation tax was charged in the period because of the Group's fulfilment of all of its obligations as a REIT. This resulted in basic earnings per share of 2.89 pence (2.87 pence on a diluted basis) (H2 2016: 3.38 pence and 3.35 pence (diluted)).

The NAV per share as at 30 June 2017 was 105.81 pence, prior to adjusting for the interim dividend of 1.525 pence per share (31 December 2016: 105.9 pence, prior to adjusting for the interim dividend of 1.55 pence per share). The NAV is shown net of all property acquisition costs and dividends paid during the six months.

Dividends

For the six months to 30 June 2017, the Company declared two interim dividends of 1.525 pence per share each. These were declared on:

· 10 May 2017, in respect of the quarter ended 31 March 2017 (paid 31 May 2017); and

· 4 July 2017, in respect of the quarter ended 30 June 2017 (paid 1 August 2017).

Of the total dividends in respect of the period of 3.05 pence per share, 2.098 pence per share was declared as a PID and 0.952 pence per share was declared as ordinary UK dividends (H2 2016: 0 pence per share and 3.05 pence per share respectively (All Non-PID)).

The Group's adjusted EPRA earnings per share were 1.05 pence (H2 2016: 0.72 pence). Adjusted EPRA earnings per share takes EPRA earnings per share and adds the licence fee on forward funded developments; the development rebate on forward funded developments and discounts on acquisition arising from rental guarantees. We see this as the most relevant measure when assessing dividend distributions. Our target is to pay dividends totalling 6.1 pence per share in respect of 2017.

Financing

On 6 March 2017, we agreed a new unsecured term loan facility of £10 million, which was drawn down in full. This is our first facility at the Company level, reflecting the maturity of the business. The facility has a three-year term and an all-in cost of 2.15% p.a.

During the period, we also extended the terms of two existing facilities. These were:

· the £32.8 million facility with AIB Group (UK) PLC, which is now repayable in October 2020; and

· the £30.63 million facility with The Royal Bank of Scotland, which now becomes repayable in December 2018.

In addition, following our acquisition of Revcap's 50% share of the Willowbank joint venture, we repaid the joint venture's outstanding debt of £9.5 million.

As at 30 June 2017, the Group had committed debt facilities of £320.0 million, of which £303.8 million had been drawn down (31 December 2016: £243.9 million). Our aggregate LTV ratio at the period end was 36.0% (31 December 2016: 31.1%), against our long-term target of 35% and maximum of 40%, and we were in full compliance with our covenants.

Portfolio

As at 30 June 2017, the Group owned, or was committed on, a total of 90 assets representing 8,762 beds (31 December 2016: 89 assets representing 8,504 beds). We had also exchanged conditional contracts on a further four assets representing 689 beds (31 December 2016: five assets representing 675 beds). These include sites subject to planning permission being obtained, with the conditions or planning remaining outstanding at the period end. The Group's assets are spread across 30 cities and towns.

The portfolio included 75 revenue-generating properties at the period end (31 December 2016: 74), which will increase to 84 for the 2017/18 academic year, as a number of development projects reach completion. The gross annualised rent for these 84 properties is approximately £66.8 million (31 December 2016: £52.1 million), of which £1.8 million (representing 2.8% of the gross annualised rent) was attributable to commercial revenue (31 December 2016: £1.8 million, representing 3.5% of gross annualised rent). We are targeting an average uplift in annual rents of 2.8% for the 2017/18 academic year (2016/17: 2.78%).

At 30 June 2017, the average net yield on acquisition of the operating properties, or on cost for development assets that had reached practical completion, was 6.9% (31 December 2016: 6.5%). The average valuation yield as at 30 June 2017 was 5.8% (31 December 2016: 5.9%).

Acquisitions

During the period, we announced the acquisition of one operating asset and one forward funded project, as shown below. In March 2017, we also acquired Revcap's 50% share of the Willowbank joint venture for £4.65 million.

Name	Location	Number of Beds	Date of Acquisition	Price Paid or Total Investment to Completion (£m)	Estimated Completion Date	Net Initial Yield
Operating
Foss Studios	York	220	January 2017	23.3	N/A	5.6%
Forward Funded Projects
Percy's Lane	York	106	January 2017	9.3	September 2018	N/A
Total		326		32.6

Developments

Name	Location	Proposed number of beds	Estimated completion/ operational date
Forward funded projects
Bonhay Road	Exeter	150	August 2017 (completed)
155 George Street	Glasgow	89	June 2017 (completed)
134 New Walk	Leicester	16	April 2017 (completed)
Welsh Baptist Chapel	Manchester	87	September 2017
The Frontage	Nottingham	162	May 2017 (completed)
Europa House	Portsmouth	242	September 2017 (completed)
Trippet Lane	Sheffield	63	September 2017
Lawrence Street	York	115	August 2017 (completed)
Percy's Lane	York	106	September 2018
140-142 New Walk	Leicester	48	September 2018
The Emporium	Birmingham	185	September 2018
Princess Road	Leicester	106	September 2018
Development projects
Provincial House	Sheffield	107	September 2017
Forthside	Stirling	204	September 2018
Projects and sites acquired subject to planning
Ocean Bowl¹	Falmouth	249	September 2019

¹The Group has exchanged contracts on this site, subject to planning consent being obtained. Planning consent had not been obtained as at 30 June 2017.

The advantage of owning a number of properties in any one city is demonstrated by our recent experience in Sheffield. While construction of one development has been delayed (Trippet Lane), another has been completed ahead of schedule (Provincial House) and we have, therefore, been able to offer places to students from one building to the other for the 2017/18 academic year. In addition, tenants on the waiting list for Portobello Road (completed for the 2016/17 academic year) have also been offered beds at Provincial House. Our tenants enjoy a consistent level of quality across our buildings while we have been able to optimise lettings (as well as benefitting from a one-year rental guarantee from the developer of Trippet Lane).

Redevelopment

We see the potential to increase capital values and income from a number of our operating assets, through targeted redevelopment.

During the first half of the year, we received planning permission from Manchester City Council to redevelop Victoria Point. Originally developed as a private residential scheme, but with established student use, Victoria Point comprises 566 beds across six buildings, which are set out in a mix of two, three and four bedroom apartments. The phased redevelopment will see us convert some of the multi-bed apartments into studio apartments and upgrade others as shared apartments, along with the addition of extensive communal facilities to create a purpose-built student hub.

Valuation

Each property in our portfolio was valued at 30 June 2017 by an external valuer, CBRE, in accordance with the RICS Valuation - Professional Standards global January 2014, including the International Valuation Standards and the RICS Valuation - Professional Standards UK January 2014 (revised April 2015) (the "Red Book"). CBRE values the portfolio assuming 97% occupancy.

As at 30 June 2017, the property portfolio had a market value of £817.9 million (31 December 2016: £721.3 million), excluding properties on which we had only exchanged conditional contracts. Of this, £738.0 million was attributable to operating assets or those which had reached practical completion, an increase of 16.3% compared to the aggregate purchase price or cost of development of £634.3 million (31 December 2016: £654.0 million, up 10.2% on an aggregate cost of £593.7 million). The aggregate valuation attributable to the forward funded and development assets that had unconditionally exchanged was £80.4 million, which is based on progress of the development of those assets to 30 June 2017.

Operations

This was a significant period in the development of our operating platform, Hello Student^®. At the start of January 2017, Hello Student^® was marketing or managing 36 (or 48%) of our 75 operational buildings. During the period, we added a total of 20 buildings to the platform, including six of the seven developments completed ahead of the 2017/18 academic year. At the period end, 56 (or 69%) of 81 buildings were being marketed or managed by Hello Student^® in 21 cities and towns. This has substantially broadened the platform's footprint and its depth in a number of cities.

Hello Student^® is an important contributor to our operating efficiency, as we in-source the management of assets previously operated on our behalf by third parties. Adding more assets in each city to the platform also generates economies of scale in that location. Its increasing size makes us an attractive employer for high-quality managers, offering them opportunities to develop their careers with us. We now have ten city managers and more than 80 staff working for Hello Student^® and in turn, enables us to offer a better service for students.

The Hello Student^® website is gaining greater traction in its second year of marketing, attracting 31,000 hits in June 2017, compared to 7,300 hits in June 2016, with figures rising to 59,000 in August 2017. A high proportion of its traffic is driven by our strong presence on Facebook. The letting of our new developments is notably ahead of previous years, in part because all the developments are in cities where we already have a presence and the Hello Student^® brand is known.

With Hello Student^® now managing more assets in more cities, we expect to increase our rate of students who rebook with us and accommodate students who need to relocate. Of 1,051 respondents to a survey carried out by us, 55% of residents who were potential rebookers, did rebook.

An important output from our operating platform is improved data on students' needs and preferences, and the performance of our assets. Our programme of student satisfaction and innovation research, which is described in the case study below, gives us valuable insight into how we can improve our offer. In addition, we have recruited a highly experienced Director of Research and Development, Sarah Jones, who joined us in January, making us one of very few companies in the sector with in-house research. This enables us to conduct deep analysis of our cities, including the financial performance of the universities, the type of students they attract, where those students come from, the supply, quality and price of accommodation, and the niches we can successfully target there. This is a crucial input to our strategy, allowing us to invest for growth in a more targeted way.

The safety of our students is always a top priority for us and this has been brought into sharp focus by the devastating fire at Grenfell Tower. As noted in the Chairman's Statement, none of our assets fall under the Department for Communities and Local Government's definition of a building at risk. Empiric's construction specifications and acquisition checks are to standards in excess of Building Regulation standards. To provide additional confirmation, an independent review of all buildings has been carried out and preliminary reporting received.

Investment Market

The PBSA market has been a significant focus for institutional investors in recent years, with substantial volumes of transactions and with more assets continually coming to the market, as developers and short-term holders look to sell. This year is projected to be the second highest on record for the value of transactions.

International investors, particularly from North America and Asia, have targeted the sector for investment. However, they typically prefer to buy sizeable portfolios rather than individual assets.

While yields have compressed somewhat over the last two years or so, they are generally higher and more stable than in other sectors, as student accommodation remains a specialist segment, with barriers to entry such as scale and access to dedicated operating platforms.

In this market, Empiric has a number of important advantages. In particular:

· we primarily buy individual assets, for which there is less competition;

· we target smaller and more characterful assets than many other investors, with an average size of 100 beds and cost of £10 million;

· we are targeting 36 towns and cities across the UK, and are highly selective about the assets we acquire and are already in 30 cities; and

· Hello Student^® giving economies of scale with in-house advantage.

As a result, we expect to continue to acquire assets and developments at attractive yields, which allow us to create value for shareholders at the time of purchase.

Hello Student^® Voice of the Tenant

One of the key benefits of having operations and management in-house under Hello Student^® is that it creates direct relationships on several levels for us.

We have a network of city and building managers who personify the Hello Student^® brand and values to our tenants, and give us on-the-ground intelligence about our city markets. In turn, our staff enjoy the sense of belonging to the Hello Student^® community, the responsive support from Empiric's central functions, and the sense of pride that comes from running their own buildings.

Alongside our staff's day-to-day relationships with our tenants, we have established a programme of student satisfaction and innovation research, which will run at key stages during the academic year. This feedback will be a litmus test of how Hello Student^® is being received by students and how well our buildings perform, and will enable us to continuously improve our service over time.

The first Hello Student^® check out survey took place in June 2017 over 32 sites, with a potential reach of 3,427 students.

The results (from 1,051 tenants) were very positive, with almost nine out of ten indicating that the Hello Student^® staff are friendly and helpful, and the same number stating that they love their room.

The survey also showed that 46% of tenants will continue studying next year, with 92% of those staying in the same location. 55% of the tenants remaining in the same location rebooked their existing Hello Student^® building, and a further 2% booked another Hello Student^® building in that location. 5% of survey respondents who are students next year were moving to a different UK town. Our tenants are also very likely to recommend our accommodation to another student, highlighting the importance of the brand to them. The research will also assist in pinpointing areas where we can enhance our offer, to improve satisfaction and recommendation scores in future.

We established our Research and Development function in January 2017. Primary research and feedback from tenants and the Hello Student^® network of managers is core to its remit, assisted by long-term research partners Research Stories.

Another key function is to support the acquisitions process, by providing market reports and intelligence for each of our existing and potential locations. This provides a further layer of assurance to the acquisitions team, when assessing the attractiveness of purchase opportunities.

Post-Balance Sheet Events

On 20 July 2017, we completed a placing, open offer and offer for subscription for 100,917,432 shares, at an issue price of 109 pence per share. This raised gross proceeds of £110 million, which will enable us to pursue a strong pipeline of investment opportunities.

Since the share issue, we have exchanged contracts to acquire the following assets:

· The Franciscan International Study Centre in Canterbury, for £5.8 million (excluding costs). The property includes five standing townhouses for student accommodation with 50 beds (of which 27 are en-suite rooms) and a separate 16,200 sq. ft. building, all set in three acres of land with development potential. We are in pre-application discussions with the local council about a development of more than 325 beds, including studios, two and three bed apartments and six bed townhouses.

· The Hahnemann Building in Liverpool, for £10.8 million (excluding costs). This is a high-specification student accommodation scheme, completed for the 2016/17 academic year, and comprises 98 studios with communal space. Hello Student^® will manage the accommodation from completion.

· St Mary's Hospital site in Bristol for £8.08 million (excluding costs). This development site will accommodate a 100+ bed premium scheme comprising a mix of studios, two bed apartments and townhouses, with a generous amount of student amenity space.

· King's Stables Road, Edinburgh, for a total funding commitment of £26.56 million (excluding costs). We are forward funding the development of 166 bed premium student accommodation, in an all-studio scheme.

Paul Hadaway

Chief Executive Officer, 12 September 2017

Tim Attlee

Chief Investment Officer, 12 September 2017

Lynne Fennah

Chief Financial Officer, 12 September 2017

Directors' Responsibilities Statement

The Directors confirm that to the best of their knowledge this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union and that the operating and financial review herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 of the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority namely:

· an indication of important events that have occurred during the first six months of the financial period and their impact on the condensed financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial period; and

· material related party transactions in the first six months.

Shareholder information is as disclosed on the Empiric Student Property plc website, www.empiric.co.uk .

For and on behalf of the Board

The Rt Hon the Baroness Dean of Thornton-le-Fylde

Chairman, 12 September 2017

Key Performance Indicators

Our objective is to deliver attractive returns to shareholders, by successfully executing our Investment Policy. We track our progress using the key performance indicators set out below.

Financial

	Performance
Total Return ("TR") to shareholders Definition: the growth in share price plus dividends paid, as a percentage of the mid-market price at the start of the financial period. TR of 8.4% compared with 3.6% for the FTSE All-Share REIT Index.	8.4% (1.1% for the six months to 31 December 2016)

NAV per share (basic) Definition: the value of the Group's total assets less the book value of its liabilities attributable to shareholders.	105.81p (105.9p as at 31 December 2016)

LTV ratio Definition: the proportion of borrowings compared to Gross Asset Value (defined as total assets less current liabilities).	36.0% (31.1% as at 31 December 2016)

Dividend against target Definition: dividends declared in respect of the financial period. The dividend per share was 3.05 pence, putting us track to reach our target of 6.10 pence for 2017 as a whole.	3.05p (3.05p for the six months to 31 December 2016)

Earnings per share (basic) Definition: post-tax earnings generated that are attributable to shareholders, divided by the weighted average number of shares in issue in the period.	2.89p (3.38p for the six months to 31 December 2016)

Adjusted EPRA earnings per share Definition: post-tax adjusted EPRA earnings per share attributable to shareholders, which includes the licence fee receivable on the Group's forward funded development assets, late completion development rebates on forward funded assets and discounts an acquisition arising from rental guarantees.	1.05p (0.72p for the six months to 31 December 2016)

EPRA Performance Indicators

	Performance
EPRA earnings (basic) Earnings from operational activities. Purpose A key measure of a company's underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.	£1.5m (£1.9m for the six months to 31 December 2016)	0.29p (0.38p per share for the six months to 31 December 2016)

EPRA NAV (basic) NAV adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business. Purpose Makes adjustments to International Financial Reporting Standards ("IFRS") NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities for a true real estate investment company.	£531.4m (£532.1m as at 31 December 2016)	105.8p (105.9p per share as at 31 December 2016)

EPRA NNNAV (basic) EPRA NAV adjusted to include the fair values of: (i) financial instruments; (ii) debt; and (iii) deferred taxes. Purpose Adjusts EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company.	£494.4m (£519.6m as at 31 December 2016)	98.6p (103.7p per share as at 31 December 2016)

EPRA net initial yield ("NIY") Annualised rental income, based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property net of (estimated) purchasers' costs. Purpose A comparable measure for portfolio valuations. This measure should make it easier for investors to judge how the valuation of portfolios compare.		4.2% (4.2% as at 31 December 2016)

Independent Review Report

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 30 June 2017, which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes that have been reviewed.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' Responsibilities

The interim financial report is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the UK's Financial Conduct Authority.

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting'', as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting its responsibilities in respect of interim financial reporting in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (United Kingdom and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

BDO LLP

Chartered Accountants and Registered Auditors

London

United Kingdom

12 September 2017

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Condensed Consolidated Statement of Comprehensive Income

30 June 2017

	Notes	Unaudited six months to 30 June 2017 £'000	Audited six months to 31 December 2016 £'000	Unaudited six months to 30 June 2016 £'000
Continuing operations
Revenue		24,459	19,210	12,205
Property expenses		(9,688)	(8,152)	(3,435)
Net rental income		14,771	11,058	8,770
Administrative expenses		(7,627)	(5,323)	(4,108)
Change in fair value of investment property		13,021	14,474	10,332
Operating profit		20,165	20,209	14,994
Finance cost		(5,767)	(4,231)	(2,584)
Finance income		22	255	527
Net finance cost	2	(5,745)	(3,976)	(2,057)
Share of results from joint ventures		57	713	1,161
Profit before income tax		14,477	16,946	14,098
Corporation tax	3	-	-
Profit for the period		14,477	16,946	14,098
Other comprehensive income
Items that will be reclassified to profit and loss
Fair value gain or loss on cash flow hedge		268	453	(1,055)
Total comprehensive income for the period		14,745	17,399	13,043
Earnings per share expressed as pence per share
Basic	4	2.89	3.38	3.13
Diluted	4	2.87	3.35	3.11

Condensed Consolidated Statement of Financial Position

30 June 2017

	Notes	Unaudited 30 June 2017 £'000	Audited 31 December 2016 £'000	Audited 30 June 2016 £'000
Non-current assets
Property, plant and equipment		536	509	297
Intangible assets		1,319	1,017	737
Investment property - operational assets	6	738,022	644,510	443,440
Investment property - development assets	6	80,360	67,380	70,754
Investments in joint ventures		-	4,923	4,197
Derivative financial assets	9	6	19	18
		820,243	718,358	519,443
Current assets
Trade and other receivables		19,436	24,852	18,716
Cash and cash equivalents		23,250	59,399	163,923
		42,686	84,251	182,639
Total assets		862,929	802,609	702,082
Current liabilities
Trade and other payables		25,865	16,033	14,974
Borrowings	8	-	-	9,257
Derivative financial liability	9	466	485	479
Deferred rental income		7,472	15,760	4,418
		33,803	32,278	29,128
Non-current liabilities
Bank borrowings	8	298,221	238,718	143,639
Derivative financial liability	9	477	748	1,206
		298,698	239,466	144,845
Total liabilities		332,501	271,744	173,973
Total net assets		530,428	530,865	528,109
Called up share capital	10	5,013	5,013	5,013
Share premium		359,958	359,958	359,958
Capital reduction reserve		90,783	106,198	121,236
Retained earnings		75,396	60,686	43,345
Cash flow hedge reserve		(722)	(990)	(1,443)
Total equity/net assets		530,428	530,865	528,109
Total equity and liabilities		862,929	802,609	702,082
Net Asset Value per share basic (pence)	11	105.81	105.90	105.35
Net Asset Value per share diluted (pence)	11	105.15	105.07	104.73
EPRA Net Asset Value per share basic (pence)	11	106.01	106.15	105.71
EPRA Net Asset Value per share diluted (pence)	11	105.34	105.31	105.09

Condensed Consolidated Statement of Changes in Equity

Period from 1 January to 30 June 2017 (unaudited)

	Called up Share capital £'000	Share premium £'000	Capital reduction reserve £'000	Retained Earnings £'000	Cash flow hedge reserve £'000	Total Equity £'000
Balance at 1 January 2017	5,013	359,958	106,198	60,686	(990)	530,865
Changes in equity
Profit for the period	-	-	-	14,477	-	14,477
Fair value gain on cash flow hedge	-	-	-	-	268	268
Total comprehensive income for the period	-	-	-	14,477	268	14,745
Share-based payments	-	-	-	233	-	233
Dividends	-	-	(15,415)	-	-	(15,415)
Total contributions and distribution recognised directly in equity	-	-	(15,415)	233	-	(15,182)

Balance at 30 June 2017	5,013	359,958	90,783	75,396	(722)	530,428

Period from 1 July to 31 December 2016 (audited)

	Called up Share capital £'000	Share premium £'000	Capital reduction reserve £'000	Retained Earnings £'000	Cash flow hedge reserve £'000	Total Equity £'000
Balance at 1 July 2016	5,013	359,958	121,236	43,345	(1,443)	528,109
Changes in equity
Profit for the period	-	-	-	16,946	-	16,946
Fair value gain on cash flow hedge	-	-	-	-	453	453
Total comprehensive income for the period	-	-	-	16,946	453	17,399
Share-based payments	-	-	-	395	-	395
Dividends	-	-	(15,038)	-	-	(15,038)
Total contributions and distribution recognised directly in equity	-	-	(15,038)	395	-	(14,643)
Balance at 31 December 2016	5,013	359,958	106,198	60,686	(990)	530,865

Period from 1 January 2016 to 30 June 2016 (unaudited)

	Called up Share capital £'000	Share premium £'000	Capital reduction reserve £'000	Retained Earnings £'000	Cash flow hedge reserve £'000	Total Equity £'000
Balance at 1 January 2016	3,850	238,952	134,530	28,952	(388)	405,896
Changes in equity
Profit for the period		-	-	14,098	-	14,098
Fair value gain on cash flow hedge	-	-	-	-	(1,055)	(1,055)
Total comprehensive income for the period	-	-	-	14,098	(1,055)	13,043
Issue of share capital	1,163	123,837	-	-	-	125,000
Share issue costs	-	(2,831)	-	-	-	(2,831)
Share-based payments	-	-	-	295	-	295
Dividends	-	-	(13,294)	-	-	(13,294)
Total contributions and distribution recognised directly in equity	1,163	121,006	(13,294)	295	-	109,170
Balance at 30 June 2016	5,013	359,958	121,236	43,345	(1,443)	528,109

Condensed Consolidated Statement of Cash Flows

30 June 2017

	Unaudited six months to 30 June 2017 £'000	Audited six months to 31 December 2016 £'000	Unaudited six months to 30 June 2016 £'000
Cash flows from operating activities
Profit before income tax	14,477	16,946	14,098
Share-based payments	233	395	295
Depreciation charge	105	73	100
Finance income	(22)	(255)	(527)
Total finance costs	5,767	4,231	2,584
Share of results from joint venture	(57)	(713)	(1,161)
Change in fair value of investment property	(13,021)	(14,474)	(10,332)
	7,482	6,203	5,057
(Increase)/decrease in trade and other receivables	6,818	(6,135)	1,035
Increase in trade and other payables	2,965	1,059	7,292
Increase/(decrease) in deferred rental income	(8,289)	11,342	(3,042)
	1,494	6,266	5,285
Net cash flows generated from operations	8,976	12,469	10,342
Cash flows from investing activities
Purchase of tangible fixed assets	(87)	(240)	(215)
Purchase of intangible assets	(348)	(325)	(737)
Investments in joint ventures	-	(13)	-
Purchase of investment property	(83,266)	(183,222)	(151,159)
Interest received	22	254	527
Net cash flows from investing activities	(83,679)	(183,546)	(151,584)
Cash flows from financing activities
Share issue proceeds	-	-	125,000
Share issue costs	-	-	(2,831)
Dividends paid	(15,415)	(15,038)	(13,294)
Bank borrowings	69,446	97,346	89,257
Repayments of bank borrowings	(9,534)	(9,286)	(37,403)
Loan arrangement fees paid	(1,142)	(2,789)	(1,347)
Finance costs	(4,801)	(3,680)	(2,023)
Net cash from financing activities	38,554	66,553	157,359
Increase/(decrease) in cash and cash equivalents	(36,149)	(104,524)	16,117
Cash and cash equivalents at beginning of period	59,399	163,923	147,806
Cash and cash equivalents at end of period	23,250	59,399	163,923

Notes to the Financial Statements

1. Accounting policies

1.1 Trading period

The condensed interim financial statements of the Group reporting period is from 1 January 2017 to 30 June 2017.

1.2 Going concern

The Group has performed strongly since IPO, having raised in excess of £500 million from six equity placements and £304 million of debt. The Group has deployed these funds across a portfolio of operating assets that have stable income streams and potential for capital appreciation, in addition, the Group has committed to a number of developments which will become operational in time for the 2017/18 academic year. As at 30 June 2017 the Group held £23 million of cash that had not been invested in property but is expected to be invested in line with these objectives. A further equity placement in July 2017 raised gross proceeds of £110 million and the Group also had undrawn debt facilities amounting to £16.2 million as at 30 June 2017.

The Directors are therefore satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, for a period of not less than 12 months from the date of this report.

1.3 Basis of preparation

The condensed interim financial statements for the six months ended 30 June 2017 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS 34, "Interim Financial Reporting", as adopted by the European Union.

The condensed consolidated financial statements for the six months ended 30 June 2017 have been reviewed by the Group's independent auditor, BDO LLP, in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and were approved for issue on 11 September 2017.

The condensed consolidated financial statements presented herein for the period to 30 June 2017 does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group's annual report and accounts for the period to 31 December 2016 have been delivered to the Registrar of Companies. The Group's independent auditor's report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006.

The Group's financial statements have been prepared on a historical cost basis, except for investment property and derivative financial instruments which have been measured at fair value. The consolidated financial statements are presented in Sterling which is also the Group's functional currency.

The accounting policies adopted in this report are consistent with those applied in the Group's statutory accounts for the period ended 31 December 2016 and are expected to be consistently applied during the year ending 31 December 2017.

1.4 Significant accounting judgements, estimates and assumptions

The preparation of the Group's interim financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated interim financial statements:

(a) Fair valuation of investment property

The market value of investment property is determined, by an independent external real estate valuation expert, to be the estimated amount for which a property should exchange on the date of the valuation in an arm's-length transaction. Properties have been valued on an individual basis. The valuation experts use recognised valuation techniques and the principles of IFRS 13. The Group has acquired investment properties which are subject to commercial property leases with tenants.

The valuations have been prepared in accordance with the RICS Valuation - Professional Standards January 2014 (revised April 2015) ("the Red Book"). Factors reflected include current market conditions, annual rentals, lease lengths, and location. The significant methods and assumptions used by valuers in estimating the fair value of investment property are set out in note 6.

For properties under development the fair value is calculated by estimating the fair value of the completed property using the income capitalisation technique less estimated costs to completion and an appropriate developer's margin.

(b) Operating lease contracts - the group as lessor

The Group has determined, based on an evaluation of the terms and conditions of the arrangements, particularly the duration of the lease terms and minimum lease payments, that it retains all the significant risks and rewards of ownership of these properties and so accounts for the leases as operating leases.

In accordance with IAS 39, the Group values its derivative interest rate swaps at fair value. The fair values are conducted by an independent financial valuation expert with revaluation occurring on a six-monthly basis. The independent financial valuation expert will use a number of assumptions in determining fair values. The fair value is derived by using the mid-point of the yield curve prevailing on the reporting date and the valuation is performed on a clean basis. The fair value represents the net present value of the difference between the cash flows produced by the contracted rate and the valuation rate.

1.5 Standards in issue but not yet effective

The Directors are currently assessing the impact on the financial statements of the standards listed below, which are not yet effective and have not been early adopted in this financial information. The Directors do not currently expect the adoption of these standards to have a material impact on the Group's financial statements, other than on presentation and disclosure, although a full and detailed assessment has yet to be completed:

IFRS 9: Financial Instruments (effective 1 January 2018)

IFRS 15: Revenue from contracts with customers (effective January 2018) and

IFRS 16: Leases (effective 1 January 2019)

2. Net finance cost

	Unaudited six months to 30 June 2017 £'000	Audited six months to 31 December 2016 £'000	Unaudited six months to 30 June 2016 £'000
Finance costs
Fair value loss on interest rate cap	13	-	92
Interest expense on bank borrowings	5,041	3,680	2,137
Amortisation of loan transaction costs	713	551	355
	5,767	4,231	2,584
Finance income
Fair value gain on interest rate cap	-	1	-
Fair value gain on interest rate swap	21	-	-
Interest received on bank deposits	1	254	527
	22	255	527
Net finance cost	5,745	3,976	2,057

3. Corporation tax

Taxation on the profit or loss for the period not exempt under UK REIT regulations comprises current and deferred tax. Taxation is recognised in the profit and loss within the Group Consolidated Statement of Comprehensive Income except to the extent that it relates to items recognised as direct movement in equity, in which case it is also recognised as a direct movement in equity.

Current tax is expected tax payable on any non-REIT taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

4. Earnings per share ("EPS")

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Reconciliations are set out below.

	Calculation of basic EPS	Calculation of diluted EPS
Unaudited six months to 30 June 2017
Earnings (£'000)	14,477	14,477
Weighted average number of shares ('000)	501,279	501,279
Adjustment for employee share options ('000)	-	3,152
Total number of shares ('000)	501,279	504,431
Per-share amount (pence)	2.89	2.87
Audited six months to 31 December 2016
Earnings (£'000)	16,946	16,946
Weighted average number of shares ('000)	501,279	501,279
Adjustment for employee share options ('000)	-	3,990
Total number of shares ('000)	501,279	505,269
Per-share amount (pence)	3.38	3.35
Unaudited six months to 30 June 2016
Earnings (£'000)	14,098	14,098
Weighted average number of shares ('000)	449,885	449,885
Adjustment for employee share options ('000)	-	2,957
Total number of shares ('000)	449,885	452,842
Per-share amount (pence)	3.13	3.11

EPRA EPS, reported on the basis recommended for real estate companies by the European Public Real Estate Association, is a key measure of the Group's operating results.

EPRA adjusted earnings is a performance measure used by the Board to assess the Group's dividend payments. Licence fees and development rebates received during the period are added to earnings on the basis noted below.

The adjustment for licence fee receivable is calculated by reference to the fraction of the total construction completed during the period, multiplied by the total licence fee receivable given on a forward funded asset.

The development rebate is due from developers in relation to late completion on forward funded developments as stipulated in development agreements.

The discounts on acquisition are in respect of the vendor guaranteeing a rental shortfall for the first year of operation as stipulated in the sale and purchase agreement.

	Calculation of EPRA basic EPS £'000	Calculation of EPRA diluted EPS £'000	Calculation of EPRA adjusted basic EPS £'000
Unaudited six months to 30 June 2017
Earnings	14,477	14,477	14,477
Adjustment to include licence fee receivable on forward funded developments in the period	-	-	1,402
Adjustment to include development rebate receivable on forward funded developments in the period	-	-	1,166
Adjustment to include discounts on acquisition due to rental guarantees in the period	-	-	1,225
Changes in fair value of investment property (note 6)	(13,021)	(13,021)	(13,021)
Changes in fair value of share of joint venture investment	-	-	-
Changes in fair value of interest rate derivatives (note 2)	(8)	(8)	(8)
Earnings/adjusted earnings	1,448	1,448	5,241
Weighted average number of shares ('000)	501,279	501,279	501,279
Adjustment for employee share options ('000)	-	3,152	-
Total number of shares ('000)	501,279	504,431	501,279
Per-share amount (pence)	0.29	0.29	1.05

	Calculation of EPRA basic EPS £'000	Calculation of EPRA diluted EPS £'000	Calculation of EPRA adjusted basic EPS £'000
Audited six months to 31 December 2016
Earnings	16,946	16,946	16,946
Adjustment to include licence fee receivable on forward funded developments in the period	-	-	1,201
Adjustment to include development rebate receivable on forward funded developments in the period	-	-	496
Changes in fair value of investment property (note 6)	(14,474)	(14,474)	(14,474)
Changes in fair value of share of joint venture investment	(557)	(557)	(557)
Changes in fair value of interest rate derivatives (note 2)	(1)	(1)	(1)
Earnings/adjusted earnings	1,914	1,914	3,611
Weighted average number of shares ('000)	501,279	501,279	501,279
Adjustment for employee share options ('000)	-	3,990	-
Total number of shares ('000)	501,279	505,269	501,279
Per-share amount (pence)	0.38	0.38	0.72

	Calculation of EPRA basic EPS £'000	Calculation of EPRA diluted EPS £'000	Calculation of EPRA adjusted basic EPS £'000
Unaudited six months to 30 June 2016
Earnings	14,098	14,098	14,098
Adjustment to include licence fee receivable on forward funded developments in the period	-	-	1,356
Changes in fair value of investment property (note 6)	(10,332)	(10,332)	(10,332)
Changes in fair value of share of joint venture investment	(961)	(961)	(961)
Changes in fair value of interest rate derivatives (note 2)	92	92	92
Earnings/adjusted earnings	2,897	2,897	4,253
Weighted average number of shares ('000)	449,885	449,885	449,885
Adjustment for employee share options ('000)	-	2,957	-
Total number of shares ('000)	449,885	452,842	449,885
Per-share amount (pence)	0.64	0.64	0.95

The ordinary number of shares is based on the time-weighted average number of shares throughout the period.

5. Dividends paid

	Unaudited six months to 30 June 2017 £'000	Audited six months to 31 December 2016 £'000	Unaudited six months to 30 June 2016 £'000
Interim dividend of 1.5 pence per Ordinary Share in respect of the quarter ended 31 December 2015	-	-	5,775
Interim dividend of 1.5 pence per Ordinary Share in respect of the quarter ended 31 March 2016	-	-	7,519
Interim dividend 1.5 pence per Ordinary Share in respect of the quarter ended 30 June 2016	-	7,519	-
Interim dividend of 1.5 pence per Ordinary Share in respect of the quarter ended 30 September 2016	-	7,519	-
Interim dividend of 1.5 pence per Ordinary Share in respect of the quarter ended 31 December 2016	7,770	-	-
Interim dividend of 1.5 pence per Ordinary Share in respect of the quarter ended 31 March 2017	7,645	-	-
	15,415	15,038	13,294

On the 4 July 2017, the Board declared a dividend of 1.525 pence per ordinary share in respect of the quarter ended 30 June 2017, which was paid on 1 August 2017 to Ordinary Shareholders on the register on 21 July 2017.

6. Investment property

	Investment properties freehold £'000	Investment properties long leasehold £'000	Total operational assets £'000	Properties under development £'000	Total £'000
As at 1 January 2017	564,882	79,628	644,510	67,380	711,890
Property additions	45,321	6,937	52,258	41,213	93,471
Transfer of completed developments	34,035	-	34,035	(34,035)	-
Change in fair value during the period	6,687	532	7,219	5,802	13,021
As at 30 June 2017 (unaudited)	650,925	87,097	738,022	80,360	818,382
As at 1 July 2016	368,260	75,180	443,440	70,754	514,194
Property additions	151,036	1,658	152,694	30,528	183,222
Transfer of completed developments	40,495	-	40,495	(40,495)	-
Change in fair value during the period	5,091	2,790	7,881	6,593	14,474
As at 31 December 2016 (audited)	564,882	79,628	644,510	67,380	711,890
As at 1 January 2016 (unaudited)	264,870	26,440	291,310	54,880	346,190
Property additions	66,249	48,351	114,600	43,072	157,672
Transfer of completed developments	33,869	-	33,869	(33,869)	-
Change in fair value during the period	3,272	389	3,661	6,671	10,332
As at 30 June 2016 (unaudited)	368,260	75,180	443,440	70,754	514,194

In accordance with IAS 40, the carrying value of investment property is their fair value as determined by independent external valuers. This valuation has been conducted by CBRE Limited, as independent external valuers, and has been prepared as at 30 June 2017, in accordance with the Appraisal & Valuation Standards of the Royal Institution of Chartered Surveyors ("RICS"), on the basis of market value. This value has been incorporated into the financial statements.

The independent valuation of all property assets uses market evidence and also includes assumptions regarding income expectations and yields that investors would expect to achieve on those assets over time. Many external economic and market factors, such as interest rate expectations, bond yields, the availability and cost of finance and the relative attraction of property against other asset classes, could lead to a reappraisal of the assumptions used to arrive at current valuations. In adverse conditions, this reappraisal can lead to a reduction in property values and a loss in net asset value.

All investment property is categorised as Level 3. There have been no transfers between Level 1 and Level 2 during any of the periods, nor have there been any transfers between Level 2 and Level 3 during any of the periods.

The valuations have been prepared on the basis of Market Value ("MV"), which is defined in the RICS Valuation Standards, as:

"The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."

The table below reconciles the fair value of the investment property per the Consolidated Group Statement of Financial Position and the market value of the investment property as per the independent valuation performed in respect of each period end.

	As at 30 June 2017 £'000	As at 31 December 2016 £'000	As at 30 June 2016 £'000
Value per independent valuation report	817,910	721,345	523,890
Less: investment in joint ventures	-	(9,455)	(8,150)
Less: licence fee receivable	-	-	(1,546)
Plus: long leasehold liability	472	-	-
Fair value per Group Statement of Financial Position	818,382	711,890	514,194

The descriptions and definitions relating to valuation techniques and key unobservable inputs made in determining fair values are as follows:

(a) Unobservable input: Rental values

The rent at which space could be let in the market conditions prevailing at the date of valuation. The rent range per week are as follows:

June 2017	December 2016	June 2016
£89-£337 per week	£89-£337 per week	£93-£329 per week

(b) Unobservable input: Rental growth

The estimated average increase in rent based on both market estimations and contractual arrangements. The assumed growth in valuations are as follows:

June 2017	December 2016	June 2016
1.59%	2.16%	2.78%

The net initial yield is defined as the initial gross income as a percentage of the market value (or purchase price as appropriate) plus standard costs of purchase. The range in net initial yields are as follows:

June 2017	December 2016	June 2016
4.75%-6.55%	5.20%-6.80%	5.00%-6.35%

(d) Unobservable input: Physical condition of the property

(e) Unobservable input: Planning consent

No planning enquiries were undertaken for any of the development properties.

(f) Sensitivities of measurement of significant unobservable inputs

As set out in the significant accounting estimates and judgements the Group's portfolio valuation is open to judgements and is inherently subjective by nature.

As a result, the following sensitivity analysis for the student properties has been prepared by the valuer:

	-3% Change in Rental Income £'000	+3% Change in Rental Income £'000	-0.25% Change in Yield £'000	+0.25% Change in Yield £'000
(Decrease)/increase in the fair value of investment properties
As at 30 June 2017	(34,420)	34,480	39,080	(38,750)
As at 31 December 2016	(30,320)	29,590	34,230	(31,350)
As at 30 June 2016	(22,200)	22,770	25,430	(22,710)

7. Joint ventures

In March 2017, the Group bought Revcap Advisors Limited's 50% share of the Glasgow joint venture, Empiric (Glasgow) Limited for £4,650,000. At the date of this transaction, this joint venture had external debt of £9,534,000 which was repaid to lender Close Brothers. As a result, additions of investment property of £19,046,719 were recognised. This acquisition (and the full valuation) is reflected in the investment property movement for the period.

8. Borrowings

Bank borrowings are secured by charges over individual investment properties held by certain asset-holding subsidiaries. These assets have a fair value of £658 million at 30 June 2017. In some cases, the lenders also hold charges over the shares of the subsidiaries and the intermediary holding companies of those subsidiaries.

A summary of the drawn and undrawn bank borrowings in the period in shown below:

	Bank borrowings drawn 30 June 2017 £'000	Bank borrowings undrawn 30 June 2017 £'000	Total 30 June 2017 £'000
At 1 January 2017 (audited)	243,917	66,113	310,030
Bank borrowings from new facilities in the period	10,000	-	10,000
Bank borrowings assumed on acquisition of joint venture	9,534	-	9,534
Bank borrowings drawn in the period	49,912	(49,912)	-
Bank borrowings repaid in the period	(9,534)	-	(9,534)
At 30 June 2017 (unaudited)	303,829	16,201	320,030

	Bank borrowings drawn 31 December 2016 £'000	Bank borrowings undrawn 31 December 2016 £'000	Total 31 December 2016 £'000
At 1 July 2016 (audited)	155,857	60,773	216,630
Bank borrowings from new facilities in the period	97,346	-	97,346
Bank borrowings repaid during the period	(9,286)	-	(9,286)
Bank borrowings available but undrawn in the period	-	5,340	5,340
At 31 December 2016 (audited)	243,917	66,113	310,030


	Bank borrowings drawn 30 June 2016 £'000	Bank borrowings undrawn 30 June 2016 £'000	Total 30 June 2016 £'000
At 1 January 2016 (unaudited)	104,003	883	104,886
Bank borrowings from new facilities in the period	89,257	-	89,257
Bank borrowings repaid during the period	(37,403)	-	(37,403)
Bank borrowings available but undrawn in the period	-	59,890	59,890
At 30 June 2016 (audited)	155,857	60,773	216,630

Any associated fees in arranging the bank borrowings unamortised as at the period end are offset against amounts drawn on the facilities as shown in the table below:

	Unaudited 30 June 2017 £'000	Audited 31 December 2016 £'000	Unaudited 30 June 2016 £'000
Balance brought forward (including current liability of £9,257,000 at 30 June 2016)	243,917	155,857	104,003
Total bank borrowings in the period	69,446	97,346	89,257
Less bank borrowings: repaid during the period	(9,534)	(9,286)	(37,403)
Less bank borrowings: due within one year	-	-	(9,257)
Bank borrowings: due in more than one year	303,829	243,917	146,600
Less: Unamortised costs	(5,608)	(5,199)	(2,961)
Non-current liabilities: Bank borrowings	298,221	238,718	143,639

Maturity of Bank Borrowings

	Unaudited 30 June 2017 £'000	Audited 31 December 2016 £'000	Unaudited 30 June 2016 £'000
Repayable between one and two years	47,229	23,117	-
Repayable between two and five years	65,500	35,500	35,500
Repayable in over five years	191,100	185,300	111,100
Non-current liabilities: Bank borrowings	303,829	243,917	146,600

Fair value of fixed rate debt

	Fair Value £'000	Book Value £'000	Far Value less Book Value £'000
At 30 June 2017 - unaudited	223,547	187,502	36,045
At 31 December 2016 - audited	193,092	181,807	11,285
At 30 June 2016 - audited	129,784	118,195	11,589

The fair value of the fixed rate debt has been valued by independent financial valuation expert, JCRA. The floating rate debt has been excluded as it is assumed the carrying value will be similar to the fair value.

The fair value of these contracts is determined by discounting the future cash flows estimated to be paid or received under these contracts using a valuation technique based on forward rates derived from short-term rates, futures, swap rates and implied option volatility.

9. Interest Rate Derivative

The Group has used an interest rate swap and an interest rate cap derivative to mitigate exposure to interest rate risk. The total fair value of these contracts are recorded in the statement of financial position. There have not been any transfers of assets or liabilities between levels of fair value hierarchy in the period.

	Unaudited 30 June 2017 £'000	Audited 31 December 2016 £'000	Unaudited 30 June 2016 £'000
Non-current assets: Interest rate derivatives - cap	6	19	18
Current liabilities: Interest rate derivatives - swap	(466)	(485)	(479)
Non-current liabilities: Interest rate derivatives - swap	(477)	(748)	(1,206)

The interest rate derivatives are marked to market by the relevant counterparty banks on a quarterly basis in accordance with IAS 39. Any movement in the fair values of the interest rate cap are taken to the net finance costs in the Group Statement of Comprehensive Income.

	Unaudited 30 June 2017 £'000	Audited 31 December 2016 £'000	Unaudited 30 June 2016 £'000
Interest rate cap premium - opening fair value	19	18	110
Changes in fair value of interest rate derivatives	(13)	1	(92)
Closing fair value	6	19	18

	Unaudited 30 June 2017 £'000	Audited December 2016 £'000	Unaudited June 2016 £'000
Total bank borrowings	303,829	243,917	155,857
Total fixed borrowings	(191,100)	(185,300)	(120,357)
Total floating rate borrowings	112,729	58,617	35,500
Notional value of borrowings under interest rate derivative - swap	35,500	35,500	35,500
Proportion of notional value of interest rate swap derivative to floating rate borrowings	31.5%	60.6%	100%

Fair value hierarchy

The fair value of contracts are recorded in the Group Consolidated Statement of Financial Position and is determined by forming an expectation that interest rates will exceed strike rates and discounting these future cash flows at the prevailing market rates as at the period end.

All movement in the fair value of derivatives has been categorised as Level 2. There have been no transfers between Level 1 and Level 2 during any of the periods, nor have there been any transfers between Level 2 and Level 3 during any of the periods.

10. Share capital

Ordinary shares	Unaudited June 2017 £'000	Audited December 2016 £'000	Unaudited June 2016 £'000
Opening balance	501,279,071	501,279,071	385,000,001
Issued and fully paid	-	-	116,279,070
Closing balance	501,279,071	501,279,071	501,279,071

Ordinary shares
Opening balance	5,013	5,013	3,850
Issued and fully paid	-	-	1,163
Closing balance	5,013	5,013	5,013

11. Net Asset Value per share ("NAV")

Basic NAV per share is calculated by dividing net assets in the Consolidated Statement of Financial Position attributable to ordinary equity holders of the parent by the number of ordinary shares outstanding at the end of the period.

EPRA NAV is calculated as net assets per the Consolidated Statement of Financial Position excluding fair value adjustments for debt related derivatives.

EPRA NNNAV is the EPRA NAV adjusted to include the fair values of financial instruments and debt.

Net Asset Values have been calculated as follows:

Ordinary shares	Unaudited June 2017 £'000	Audited 31 December 2016 £'000	Audited 30 June 2016 £'000
Net assets per Statement of Financial Position	530,428	530,865	528,109
Adjustment to exclude the fair value loss of financial instruments	956	1,232	1,777
EPRA NAV	531,384	532,097	529,886
Adjustment to include fair value of debt	(36,045)	(11,285)	(11,589)
Adjustment to include the fair value loss of financial instruments	(956)	(1,232)	(1,777)
EPRA NNNAV	494,383	519,580	516,520

Ordinary shares	Number	Number	Number
Issued share capital	501,279,071	501,279,071	501,279,071
Issued share capital plus employee options	504,430,869	505,269,491	504,236,462

	Pence	Pence	Pence
NAV per share basic	105.81	105.90	105.35
NAV per share diluted	105.15	105.07	104.73
EPRA NAV per share basic	106.01	106.15	105.71
EPRA NAV per share diluted	105.34	105.31	105.09
EPRA NNNAV per share basic	98.62	103.65	103.04
EPRA NNNAV per share diluted	98.01	102.83	102.44

12. Capital commitments

As at 30 June 2017, the Group had total capital commitments of £47 million relating to forward funded or direct developments.

13. Related party disclosures

Key management personnel

Key management personnel are considered to comprise the Board of Directors.

Share capital

There were no share transactions by related parties during the period.

Acquisition of joint venture company

On 31 March 2017, the Group acquired the remaining 50% shareholding in Empiric (Glasgow) Limited from the joint venture partner, Revcap Advisors Limited for £4.65 million.

Other

Payments for professional services totalling £150,000 (excluding VAT) were made to Revcap Advisors Limited. Revcap Advisors Limited are deemed to be a related party as one of their employees, Stephen Alston, is a Non-Executive Director of the Company.

Share-based payments

On 25 April 2017, the Company granted nil-cost options over a total of 71,558 ordinary shares pursuant to the deferred shares element of the annual bonus awards for the shortened six-month financial period to 31 December 2016 to Paul Hadaway and Tim Attlee.

Board change

On 14 March 2017, the Board announced that Michael Enright had resigned as a Director of the Company. Lynne Fennah was appointed Chief Financial Officer on the 26 June 2017.

14. Subsequent events

On 4 July 2017, the Board declared a dividend of 1.525 pence per ordinary share in respect of the quarter ended 30th June 2017, which was paid on 1 August 2017 to ordinary shareholders on the register on 21 July 2017. The ex-dividend date was 20 July 2017.

On 20 July 2017, the Board announced that the Placing, Open Offer and Offer for Subscription of ordinary shares raised gross proceeds of £110 million. A total of 100,917,432 shares were issued at a price of 109 pence per share.

On 27 July 2017, the Group exchanged contracts to acquire the freehold of the Franciscan International Study Centre (the "Property") in Canterbury for £5.8 million (excluding costs). The acquisition completed on 4 August 2017.

On 3 August 2017, the Group exchanged contracts to acquire the freehold of the Hahnemann Building in Liverpool for £10.8 million (excluding costs). The acquisition is expected to complete in October 2017.

On 7 August 2017, the Group acquired, on an unconditional basis, the freehold of the former St Mary's Hospital in Bristol for £8.08 million (excluding costs).

On 11 August 2017, Paul Hadaway and Tim Attlee, Directors of the Company, each exercised vested nil-cost options over 276,495 ordinary shares in the Company pursuant to the pursuant to the Empiric Student Property plc 2014 Long Term Incentive Plan. The Company's employee benefit trust, Empiric Student Property Trustees Limited, have instructed the Company to allot 276,495 ordinary shares to each Director.

On 14 August 2017, the Group acquired the land with planning permission and entered into a forward funded agreement for a 166 bed premium student accommodation development in Edinburgh for a total funding commitment of £26.56 million (excluding costs).

This information is provided by RNS

The company news service from the London Stock Exchange

END

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