Acquisition

Unite Group PLC
14 March 2002



Issue Date:                            14 March 2002

Embargoed until:                     0702hrs





UNITE TAKES 100% CONTROL
OF LONDON JOINT VENTURE



The UNITE Group plc ('UNITE'), the UK's leading specialist provider of student
and NHS key worker accommodation services, today announces the acquisition of
the 50% stake in Peabody UNITE, which it did not already own, from its London
joint venture partner, Peabody Trust, for a consideration of £19.9m.



Benefits for UNITE include:



•         100% of all future development and operating profits from London
schemes

•         immediate full control of 1,553 secured student and key worker beds
in London

•         uniformity of the UNITE brand in the national student and key worker
accommodation services market.



Peabody UNITE, which has been managed by UNITE since its inception in 1998 has
delivered 1,553 secured student and key worker beds in London and developed
long-term partnerships with NHS Trusts and the NHS Executive. The joint venture
had a planned life-span of five years and enabled UNITE, at the time a small
unquoted company, to enter the London market at lower risk and develop its
student and key worker accommodation product and services.  UNITE is now the
leading brand in its sector and both parties, who will continue to work together
on projects in London, have agreed that it is now appropriate for UNITE to
integrate the joint venture into its mainstream operations.



The total consideration of £19.9m represents a payment of £15.1m in respect of
Peabody Trust's shareholdings in Peabody UNITE (satisfied by the issue to
Peabody Trust of 5,095,986 new ordinary shares of 25p each in UNITE, fully paid,
at a price of £2.865 per share, and a cash payment of £0.5m), and £4.8m in
respect of the joint ventures indebtedness to Peabody Trust (which was
capitalised immediately prior to completion) satisfied by the issue to Peabody
Trust of a further 1,687,959 new ordinary shares at 25p each in UNITE, again
fully paid at a price of £2.865 per share.



Peabody UNITE's net asset value at 31 December 2001 was £26.6m. Under the terms
of the agreement with Peabody Trust, UNITE has agreed to issue up to £9.5m of
loan notes should the total value of the consideration shares fall below £9.5m
within 3 months. The consideration shares will rank pari passu in all respects
with the existing issued share capital of UNITE, including entitlement to the
final dividend for the year ended 31 December 2001.  UNITE has applied for the
consideration shares to be admitted to the Official List and to trading on the
London Stock Exchange.




In the 44 months since its inception, the joint venture has delivered total net
asset value uplift of £26.6m and UNITE anticipates the continued generation of
significant development profits in the London region. These will be accounted
for as net asset value uplift whereas previously a proportion was recognised as
management fees in the Group's Profit and Loss account. Consequently the
transaction is expected to be earnings dilutive for the medium term.



In its draft audited accounts for the year ending 31 December 2001, Peabody
UNITE had gross assets of £102.4m, indebtedness of £74.9m and profits after tax
for the year of £0.5m.



Commenting on the transaction, Nicholas Porter, Chief Executive of UNITE, said:



'The Peabody UNITE joint venture has been a tremendous success for both UNITE
and Peabody Trust.  Whilst Peabody UNITE is a strong and growing company in its
own right, the next logical step is to fully integrate the operation to maximise
the development of the London region under the banner of the UNITE brand,
leveraging  full operating and development profits as the demand for quality
accommodation continues to grow. We look forward to continuing our excellent
relationship with Peabody Trust.'



Peabody Trust Chief Executive Richard McCarthy said:



'Peabody is justifiably proud of its reputation for innovation as a developer of
affordable housing. This highly successful joint venture with a private sector
company shows that we can also be innovative in generating financial returns to
further Peabody's wider charitable objectives. It has also delivered much needed
affordable, high quality accommodation to key workers in London.'



                                     -ENDS-





Press Enquiries



The UNITE Group plc
Nicholas Porter,   Chief Executive Officer               T:   020 7902 5055
Simon Bernstein, Chief Financial Officer

Redleaf Communications Ltd
Emma Kane, Chief Executive                               T:   020 7955 1210
                                                         M:   07876 338339

Peabody Trust
Richard McCarthy, Chief Executive                        T:   020 7922 5758
Paul Harbard, Director of Finance                        T:   020 7922 5740

Karen Crawshaw, Head of Communications                   T:   020 7922 5759



Editors Notes



UNITE



•          UNITE was founded in 1991 by Nicholas Porter

•          UNITE is fully listed on the London Stock Exchange

•          UNITE is the UK's leading specialist provider of accommodation
services for students and key workers.

•          Further information is available at the Company's website at
www.unite-group.co.uk



Peabody Trust

•          Peabody Trust is one of London's largest housing associations and a
leading regeneration agency in the capital.

•          The Trust has more than 19,000 homes for social rent



Peabody UNITE

•          Peabody UNITE plc, was a joint partnership between Peabody Trust
and The UNITE Group plc founded in June 1998. The joint venture has undertaken
public sector projects within the M25 London area and is effectively UNITE's
London region.  The emphasis has been on the provision of 'key worker'
accommodation for NHS Trusts, although future student accommodation projects
have also been secured.







                      This information is provided by RNS
            The company news service from the London Stock Exchange
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