29 September 2016
THE UNITE GROUP PLC
("Unite Students", "Unite", the "Group", or the "Company")
DISPOSAL OF TWO ASSETS TO THE UNITE UK STUDENT ACCOMMODATION FUND ("USAF")
Unite Students, the UK's leading developer and manager of student accommodation, announces the disposal of Greetham Street, Portsmouth and Gosford Gate, Coventry to USAF for a combined value of £88.4 million. Both properties, comprising 1,122 beds, were completed in 2016 and are fully let for the 2016/17 academic year on nominations agreements to Portsmouth University and Coventry University, generating an income yield on cost of 9.3%.
The disposals increase sales in the year to over £110 million on a see-through basis and support Unite's strategy to recycle capital and maintain leverage at our target level in the mid-30% range. The blended valuation yield on the disposals was 5.65%, in line with valuation yields at the 30 June valuation date.
The acquisition has been funded in USAF with a new £100 million 5-year facility provided by Wells Fargo. The acquisitions further strengthen the quality of USAF's portfolio and are accretive to returns for USAF investors. Unite retains a stake of 23% in USAF.
Joe Lister, Chief Financial Officer of Unite Students, commented: "We are delighted to have sold two assets to USAF, recycling capital from our development programme providing capital to deploy into new development opportunities, while also enhancing USAF's portfolio and returns."
For further information, please contact:
Joe Lister, Chief Financial Officer
Felicity Cowie, Senior Public & Corporate Communications Manager
Tel: +44 117 302 7240
Tel: +44 20 3772 2562
Notes to editors:
About Unite Students
Unite Students is the UK's largest and most established manager and developer of purpose-built student accommodation. It provides a home for around 50,000 students, in more than 140 properties, across 28 leading university cities in England and Scotland. Unite works in partnership with more than 60 Higher Education institutions and also lets rooms directly to students.
Unite's purpose is to provide a home to its culturally-diverse customers, offering them a strong foundation for academic and personal success. The accommodation is high quality, safe and close to university campuses, transport links and local amenities. Students live in ensuite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning of communal kitchens and bathrooms and high speed Wi-Fi.
Founded in 1991 in Bristol, The Unite Group plc is a FTSE250 company, listed on the London Stock Exchange, employing more than 1,250 people. It pursues a sustainable growth strategy, designed to make the most of the resilient nature of the student accommodation sector. Unite is focused on maintaining its position as the leading provider of student accommodation in the UK, by having the best brand, operating the highest quality portfolio and maintaining the strongest capital structure in the sector. This is achieved with consistent investment in, and improvement to, the operating platform; highly selective development activity and asset management initiatives.
Unite is invested in and operates a small number of specialist funds and joint ventures with institutional investment partners, the largest of which is the £2 billion Unite UK Student Accommodation Fund (USAF).
Unite is the founder and major donor of the Unite Foundation. Since 2012 this has provided free student accommodation and financial support to 160 young people in the UK who lack family support.
This information is provided by RNS