Disposal

Unite Group PLC
13 December 2007

Date:                          13 December 2007

On behalf of:                  The UNITE Group plc



                  UNITE ANNOUNCES £242 MILLION SALE OF ASSETS


The UNITE Group plc ('UNITE'/ Company), the UK's largest provider of student
accommodation, today announces that it has successfully concluded the planned
sale of £220.3 million of assets to the UNITE UK Student Accommodation Fund
(USAF/ the Fund) and £21.4 million of leased assets to Morley, purchased on
behalf of its Lime Property Fund. These transactions follow the redemption of
the UNITE Finance One Plc ('UFO') bonds announced in October.


Sale of Assets to USAF


The assets sold to USAF comprise 4,426 bed spaces and are located in prime
locations within the important student markets of Manchester, Liverpool,
Sheffield, Bristol, Plymouth and Aberdeen. The majority of these properties are
fully let for the 2007-2008 academic year and are expected to generate an
average net yield of 5.60% over the forthcoming twelve months.


The transaction will deliver a £0.3 million profit on disposal over the assets'
30 June 2007 valuations and UNITE will also expense further costs of £4.0m,
predominantly relating to the amortisation of costs associated with the
establishment of USAF in 2006.  Amortisatation of these costs has been
accelerated in line with the rapid deployment of investor equity into the Fund.
Consideration will be in cash, releasing equity capital of £46 million after
repayment of loans and UNITE's co-investment into USAF.  UNITE will reinvest
this capital into its development activities over time.


The Fund is financing the acquisition through a combination of debt and equity.
Following the acquisition, USAF's loan to value gearing will be 47% and, in line
with its stated strategy, UNITE's co-investment stake in the Fund will reduce to
approximately 20%.


Sale of Leased Assets


The assets sold comprise 419 bed spaces across four properties in Bath and the
sale is in line with UNITE's stated strategy of exiting from certain leased
properties following the redemption of the UFO bonds. The properties are let to
the University of Bath on leases expiring between 2023 and 2029 on Full
Repairing and Insuring terms. The price achieved on the sale of these leased
assets is 7% below the 30 June 2007 valuations and reflects an average net yield
of 5.25%.


Mark Allan, Chief Executive of UNITE, commented:


'We are delighted to have concluded this planned sale of assets and further
progressed the transition of our business model to that of a developer and
co-investing asset manager.  In a challenging market environment, these
disposals demonstrate investors' continued appetite for the resilient
characteristics of student accommodation and provide valuable transaction
benchmarks for the sector.'



                                      ENDS



For further details please contact:

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


Dido Laurimore / Nicole Marino    Telephone: [phone]
Financial Dynamics                Email: [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
    £2 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 £1billion 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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