JAM | Sep 5, 2023

138 Student Living to launch second APO targeting J$3.2b

/ Our Today

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External view of student accommodation operated by 138 Student Living at the University of the West Indies, Mona campus. (Photo:

138 Student Living Jamaica Limited (138SL), a real estate company listed on the Jamaica Stock Exchange, announced today that it will be launching an additional public offering (APO) of shares.

The APO will open on September 8 and close on October 6.

The company intends to raise up to J$3.2 billion through the APO. The shares will be priced at J$4.40 for the public and J$4.05 for the reserve pool. The APO is expected to broaden the shareholder base while giving existing shareholders an opportunity to further invest in the company via preferential price. The increase in the investor base is also expected to aid in price discovery and additional liquidity of the 138SL stock.

According to Ryan Strachan, vice-president, investor relations, at GK Capital Management: “138SL gives investors an opportunity to own a stake in a company with one of the highest net margins on the JSE with sustained cash flows of student accommodation despite past storms of the COVID-19 pandemic. In our view, the future dividends are likely to compete with and potentially exceed Central Bank Deposit Rates.”

Expanding room capacity

The proceeds of the APO will be used to deleverage 138SL’s balance sheet and to take advantage of investment opportunities, including the expansion of 138SL’s room capacity. The real estate outfit currently operates 1,464 rooms at four locations on the University of the West Indies, Mona campus: George Alleyne, Leslie Robinson, Irvine Halls, and the Gerald Lalor Flats, through two concession agreements with university.

During the current 2023/2024 academic year, the demand for accommodation has significantly surpassed available capacity. Under the concession agreements, 138SL has the capacity to expand its room capacity by another 842 rooms, representing a 60 per cent increase in its current room capacity.

In a letter to prospective investors, Chairman of 138SL Ian Parsard said: “The APO is intended to further shore up the future of 138SL and ensure that we continue to be the Caribbean’s premier provider of university housing. The company is at a stage where it is looking to generate significant amounts of free cash flow.”

Balance sheet performance

According to Parsard, 138SL expects to be able to pay semi-annual dividends of up to 90 per cent of its distributable profits, providing a dividend yield of approximately 10 per cent at the proposed offer price.  This builds on the company’s first-dividend payment of 13 cents per share in February of 2023.

For the nine-month period ending June 30, 2023, 138SL realised revenues of over J$1 billion, a 17 per cent increase over the prior corresponding period.  The improved revenue performance reflects a return to normality due to the end of COVID-19 restrictions and the return of face-to-face classes.  Demand for accommodations from students has increased significantly. This was bolstered by the execution of several strategies aimed at increasing income from short-term rentals, which have proven to be successful.

For the nine-month period to June 30, 2023, the company realised net profit of J$270.1 million; an increase of 13.16 per cent over the prior year.  The company enjoyed net profit margins of 26 per cent during the period. 

Replacing debt stock  

The APO is paramount in the 138SL’s strategy to optimise its capital structure by replacing a portion of its over J$4.2 billion debt stock with equity, and to better align its capital structure with its income streams.  Accordingly, the company will have the potential to capitalise on opportunities to grow its top-line revenue and further boost its profitability. 

Details of the share offerings are laid out in the prospectus, which can be viewed on the Jamaica Stock Exchange website ( and on the 138 Student Living Jamaica website ( The lead broker and arranger is GK Capital Management Limited.


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