Singapore Press Holdings (SPH) announced on Monday (23 Dec) that it has acquired 7 more student hostels in UK for S$740 million.
This will add 2,383 beds to SPH’s portfolio, raising it to a total of 7,726 beds across 18 cities in the UK and Germany.
In Sep last year, SPH started getting into student hostel business by acquiring its first 14 purpose-built student accommodation (PBSA) buildings in London, Birmingham, Bristol, Huddersfield, Plymouth and Sheffield in UK for about S$321 million.
At the time, SPH CEO Ng Yat Chung said that student accommodation in the UK has growth potential. He said, “It will boost our real estate asset management portfolio, establish us as an overseas owner of PBSA in the UK, and allow us to pursue other growth opportunities in this sector.”
But he declined to disclose the estimated income from the PBSA business. Ng, who was the former Chief of Defence Force, is an SAF scholar who used to be a student studying in Cambridge, UK, himself.
Since last Sep, SPH has been aggressively acquiring student hostels particularly in UK.
In fact, in Apr this year, SPH spent another S$236.5 million to buy up student hostels in Southampton, Sheffield and Leeds in UK. Ng said in an interview then, “We remain disciplined in our acquisition pipeline, to build our UK PBSA portfolio to a platform of scale.”
Ng grows non-media businesses to “fix” decline of media business
In the financial year ended August this year, SPH reported that the revenue from its media segment fell 12 per cent to $577 million as total print advertisement revenue and circulation revenue dipped 15 per cent and 7 per cent, respectively, from a year ago.
For the whole year, SPH’s net profit fell 23 per cent to $213 million on the back of a 2.4 per cent drop in operating revenue to $959 million from a year ago.
At the annual shareholders’ meeting last month, Ng still maintained that the media business remains core to SPH (‘Media still core business despite headwinds: SPH‘). He said, “The media business is core to us. Of course it is being challenged and we have to maintain a disciplined cost structure during this time. We will pursue innovation and strengthen management bench in advertising and sales and also the journalistic core.”
When one shareholder remarked that the company should invest “heavily” to produce better content and “hire great reporters and editors” for its core media business so as to attract young Singaporeans back to newspapers, Ng replied, “Are we investing in journalism? Yes… it’s in our heart.”
Even so, SPH has been shredding staff from its media segment. In Oct 2017, it retrenched 130 people and Warren Fernandez, SPH Editor-in-Chief was reported to have said, “None of us wished to see our colleagues having to leave. They have done much good work, and we appreciate all their contributions over the years… I wish we didn’t have to do this, but we had to make some painful decisions. We had to do it to help keep our newsrooms on a sound and sustainable footing going forward.”
And two months ago, SPH cut another 130 people from its media business (‘SPH to shed 130 jobs to rein in costs‘).
In any case, at the shareholders’ meeting, Ng assured everyone that the group has a plan in place to “fix” the decline in media business by “spending a lot of time to grow the non-media” business.
With regard to SPH’s aggressive expansion into aged care and student hostel businesses under its property umbrella, Ng said, “Aged care and student accommodation are defensive sectors. Demand (in these sectors) is strong even in a challenging macro environment as now. We will continue to look for opportunities.”