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Empiric acquires student accommodation property in Leeds: Pennine House

9th June 2016

The Board of Empiric Student Property plc  is pleased to announce that the Group has acquired the freehold of a 127 bed student accommodation property in Leeds for £17.8 million (excluding costs).

Pennine House was developed by the current management of Empiric (prior to the formation of the Company) on behalf of the vendor, British Airways Pension Trust Limited ("British Airways"), in time for the 2013/14 academic year. Neither Empiric nor any of its management team has held any interest in, or been involved with the operation of, Pennine House for over twelve months.

The property comprises 127 beds in a mix of studios and two-bed en-suite apartments across eight floors together with high quality communal facilities including a gym, cinema room, study rooms and a common room.  The property also includes a ground floor and basement commercial unit currently let to Living Ventures, trading as "Gusto", one of fifteen Italian bar/restaurants in the UK, on a lease extending to 2041, with five yearly rent reviews, commencing in March 2021.

The property is located on Russell Street, between Leeds train station and the two main universities, the University of Leeds and Leeds Beckett University, both of which are within 10 minutes' walk.  It is also a short walk to one of Empiric's other Leeds assets, Algernon Firth.  This asset will continue to be managed by Collegiate, alongside the Group's other Leeds assets, Algernon Firth and St Mark's Court, both of which are already nearly fully let for the 2016/17 academic year.

Historically, the property has let well, although in the 2015/16 academic year lettings were impacted by the construction of a major new hotel next door.  Construction of the hotel is scheduled to be completed in October 2016, with external works being completed this month.  Collegiate and the Group's operations team are confident that lettings for the 2016/17 academic year will return to previous levels and, in any event, the Group will benefit from a structured rental guarantee from the vendor for the coming academic year.

Paul Hadaway, Chief Executive of Empiric Student Property plc, commented:

"Pennine House is our third acquisition in Leeds, a Russell Group university city and home to the University of Leeds (ranked 14th in The Times Good University Guide) and Leeds Beckett University, with a full-time student population of over 50,000 (for 2014/15, being the latest information available from HESA).  Tim Attlee and I know the property extremely well, having developed it on behalf of British Airways, prior to forming Empiric.  The location and quality of the building make it an excellent fit with the rest of Empiric's portfolio. Following this acquisition, the Group owns, in aggregate, 323 beds in Leeds, all of which are operational. This acquisition is in line with Empiric's investment criteria and returns profile."

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