Disposal of two assets for £100 million to USAF

RNS Number : 5450N

Unite Group PLC

25 September 2019

 

PRESS RELEASE

25 September 2019                                

THE UNITE GROUP PLC

("Unite Students", "Unite", the "Group", or the "Company")

UNITE DISPOSES OF TWO ASSETS FOR £100 MILLION TO USAF

The Unite Group plc, one of the UK's leading owners, developers and managers of student accommodation, today announces the disposal of two assets for £100 million (Unite share £75 million) to the Unite UK Student Accommodation Fund ("USAF"), representing a net initial yield of 5.5%. The assets are located in Birmingham and Newcastle and comprise a total of 1,155 beds.

In addition, USAF announces the launch and pricing of £85 million of bonds issued under its existing debt funding platform, the 3.921% bond due June 2025. The new issue is being placed at a premium to par generating total proceeds to USAF of £95 million, reflecting an implied yield of 1.83%. The proceeds will be used to fund further growth in the fund.

Unite's share of the new debt represents approximately 2% of the Group's total borrowings, on a see-through basis, as at 30 June 2019. The issue supports a further marginal reduction in the Group's cost of debt.

Joe Lister, Chief Financial Officer of the Unite Group plc, commented:

"The disposals by Unite to USAF form part of our plan to dispose of £150-200 million of assets per annum during the next three years following the acquisition of Liberty Living. These planned disposals will fund our development activity and support our target to reduce LTV to 35% by 2021."

ENDS

For further information, please contact:

Unite Students

Richard Smith / Joe Lister / Paul Richmond                                      Tel: [phone]

Powerscourt

Justin Griffiths / Victoria Heslop                                                          Tel: [phone]

About Unite Students

Unite Students is one of the UK's largest owners, managers and developers of purpose-built student accommodation serving the country's world-leading higher education sector. We currently provide homes for over 50,000 students in circa 130 properties across 22 leading university towns and cities in England and Scotland. Unite also has a strong development pipeline, which will deliver around 5,000 beds in the next three years. 

Our 1,400 people are driven by a common purpose: to provide the students who live with us a 'Home for Success' and to be the most trusted brand in the sector.  We do this through quality service, quality people and quality properties, all designed on the basis of an excellent insight into students' needs and preferences.

Unite's accommodation is high quality, safe and secure, and located where students want to live. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning services and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.

Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.

Alongside delivering quality service, our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure.  A key part of this strategy is growing the number of beds let through partnerships with mid and high tariff universities which are experiencing record levels of student demand.  We currently partner with 60 higher education institutions, guaranteeing that approximately 60% of our rooms are let under 'nomination agreements' providing high visibility of forward occupancy and rental growth.

Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £2 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).

Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation annual scholarships. The Foundation has so far provided scholarships for 250 young people working in close collaboration with 29 partner universities.

Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.

For more information, please visit Unite's corporate website www.unite-group.co.uk, the student site www.unite-students.com or the Unite Foundation www.unitefoundation.co.uk

 

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