Disposal

Unite Group PLC
04 October 2007

4 October 2007



   UNITE ANNOUNCES SALE OF ASSETS TO THE UNITE UK STUDENT ACCOMMODATION FUND



The UNITE Group plc ('UNITE'), the UK's largest provider of student
accommodation, today announces the sale of three assets to the UNITE UK Student
Accommodation Fund (the 'Fund' or 'USAF') for £81.8 million.



The assets comprise of 1,461 bed spaces and are located in the key student
markets of Bristol, Glasgow and Leeds. The properties are substantially sold out
for the 2007-2008 academic year and are expected to generate an average net
yield of 5.70% over the forthcoming twelve months.  Two of the assets were sold
by wholly owned UNITE entities and one by UNITE's Student Village Joint Venture
with Lehman Brothers ('USV').



The transactions will deliver £1.2 million profit on disposal for UNITE,
including a performance fee crystallising on disposal of the USV asset.
Consideration will be in cash, releasing equity capital after repayment of loans
of approximately £18 million that UNITE will reinvest into its development
activities in due course.



The Fund is acquiring the assets entirely from third party committed equity,
which has the effect of reducing its loan to value gearing to 46%.  In line with
its stated intention to dilute its holding in USAF to approximately 20% over
time, UNITE is not contributing further equity to the Fund as part of this
transaction.  As a result, its co-investment stake in the Fund will reduce to
22.0%.



Mark Allan, Chief Executive of UNITE, commented:



'The transactions we have announced today represent the first sale of assets
from UNITE to the £1 billion UNITE UK Student Accommodation Fund since its
launch and clearly illustrate UNITE's positioning as a developer and
co-investing asset manager.  The three properties transferred are high quality
assets in prime locations.  By leveraging UNITE's proven track record for
developing, delivering and then managing student accommodation, the Fund is able
to offer investors exposure to institutional quality property in a growing asset
class that offers more resilient characteristics than the wider commercial
property market.'



                                      ENDS



For further details please contact:


Tabitha Aldrich-Smith                             Telephone: [phone]
UNITE Group plc                                   Email: [e-mail]


Dido Laurimore/Lauren Mills/ Nicole Marino        Telephone: [phone]
Financial Dynamics                                Email: [e-mail] / [e-mail] /
                                                  [e-mail]









About UNITE



  • UNITE is the UK's leading provider of student accommodation;
  • UNITE currently operates accommodation for 38,000 students in 135
    properties, geographically spread in key university markets across England,
    Wales and Scotland
  • The value of UNITE's completed property portfolio is estimated to be worth
    £1.6 billion.
  • UNITE has a dedicated website for students who are looking to find
    accommodation at www.unite-students.com
  • UNITE is a founding member of the ANUK Code of Standards for Larger
    Developments, all properties are signed up to this code ensuring high
    standards of accommodation, service and security.



UNITE UK Student Accommodation Fund



At the end of 2006, UNITE established the £1 billion UNITE UK Student
Accommodation Fund and sold an initial portfolio to it for £515 million. The
principal objectives of this transaction were:

  • to release capital that was tied up in mature, stabilised investment
    assets for investment into higher added value development activity;
  • to provide UNITE with more growth capital in the medium term; and
  • to diversify UNITE's sources of income by providing a new, valuable
    revenue stream arising from management fees from the Fund.



The Fund helped transform UNITE's business model to that of developer of new
purpose-built student accommodation and manager of funds which own student
accommodation properties operated by UNITE and in which the Group has a
significant minority stake.



UNITE Student Accommodation, designed for students



  • Dedicated on-site hospitality management team offering 24/7 support to
    customers.
  • A wide choice of rooms available from single studio flats for students who
    want to live on their own, or, typically 5/6 bedroom flats to share with
    friends.
  • Common room facilities, including Sky TV and pool tables, are often used
    for social events. A number of properties offer gyms exclusively for
    residents' use.
  • Rents and availability vary in each town/city and a variety of payment
    plans are in place to suit students.



UNITE focuses on the provision and management of high quality, well-located
student accommodation and hospitality services at affordable prices in strong
higher education markets. UNITE undertakes the planning work, development and
management of sites, often working closely with the Universities and Colleges to
deliver accommodation for students across all ages and nationalities. UNITE
developments typically show high occupancy levels as demand continues to rise
for places on UK Higher Education courses and for high-quality, safe
accommodation.




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