FIRM PLACING AND PLACING AND

RNS Number : 2098Z

Unite Group PLC

17 September 2009

 



This announcement is not for distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or South Africa or to US Persons.

17 September 2009

The UNITE Group plc

('UNITE' / 'Company' / 'Group')

PROPOSED FIRM PLACING AND PLACING AND OPEN OFFER

Fundraising to take advantage of compelling acquisition opportunities in London

The Board of The UNITE Group plc today announces the details of a proposed share issue to raise gross proceeds of £82.0 million (approximately £77.8 million net of expenses) by the issue of 32,819,972 New Ordinary Shares in aggregate through a Firm Placing and Placing and Open Offer at 250 pence per New Ordinary Share (the 'Issue Price').

UNITE will shortly be publishing a Prospectus in relation to the Firm Placing and Placing and Open Offer and will convene a General Meeting to approve matters necessary to implement the proposed fundraising.

Summary:

• Fundraising totalling £82.0 million (gross) by way of a Firm Placing and Placing and Open Offer

• 9,845,991 New Ordinary Shares will be issued through the Firm Placing and 22,973,981 New Ordinary Shares will be issued through the Placing and Open Offer at the Issue Price, representing an 11.8 per cent. discount to the Closing Price of 283.5 pence per Existing Ordinary Share on 16 September 2009. The Firm Placing and Placing and Open Offer are being fully underwritten by J.P. Morgan Cazenove and Numis

• The proceeds of the fundraising will be used to fund the Group's planned acquisition of new development sites between now and early 2011 in London, which are intended to be developed for delivery from 2012 onwards. The Board believes that the opportunity in London at this time is compelling and that there is potential to acquire well-located sites at attractive prices which can then be developed to meet the ongoing shortage of modern purpose-built student accommodation in the city 

• The Firm Placing and Placing and Open Offer follows a number of measures undertaken by the Group to strengthen its financial position, including:

  • the creation of a joint venture with Oasis Capital Bank ('OCB') in respect of its entire 2010 development pipeline

  • the reduction of net debt and release of cash proceeds, primarily through the creation of and subsequent sale of assets to co-investment vehicles or the disposal of non-core assets to third parties resulting in sales totaling £1.2 billion over the last three years

  • delivering record occupancy of 99% in the 2008/2009 academic year and anticipated like-for-like rental growth of between 10% and 11% for the 2009/2010 academic year

  • scaling back development activity and reducing operating costs and overheads, whilst improving service quality 

  • securing new debt and amending existing terms.

The Board believes that these actions, combined with the Group's ongoing robust trading performance in the year to date, demonstrate the continuing attraction and resilience of student accommodation as an asset class.

Details of the proposed Firm Placing and Placing and Open Offer:

• The transaction comprises:

 

o       The issue of 9,845,991 New Ordinary Shares through the Firm Placing at the Issue Price (representing gross proceeds of £24.6 million). The Firm Placed Shares are not subject to clawback and are not part of the Placing and Open Offer

 

o       The issue of 22,973,981 New Ordinary Shares through the Placing and Open Offer at the Issue Price (representing gross proceeds of £57.4million)

 

• Under the terms of the Open Offer:

 

o       Qualifying Shareholders will have a Basic Entitlement of 2 Open Offer Shares for every 11 Existing Ordinary Shares registered in the name of the relevant Qualifying Shareholder on the Record Date

 

o       In addition, Qualifying Shareholders may also apply, under the Excess Application Facility, for a maximum number of Excess Shares equal to 0.1 times the number of Ordinary Shares held by them at the Record Date. Applications under the Excess Application Facility may be allocated in such manner as the Directors determine, in their absolute discretion

 

o        In the event that valid acceptances are not received in respect of any of the Open Offer Shares under the Open Offer, unallocated Open Offer Shares may be allotted to Qualifying Shareholders to meet any valid applications under the Excess Application Facility and, to the extent that there remain any unallocated Open Offer Shares, they will be placed under the Placing 

• The Firm Placing and the Placing and Open Offer are conditional, inter alia, upon the passing of the Resolutions at a General Meeting expected to be held on 5 October 2009

• The Directors currently beneficially own, in aggregate, 1,564,489 Existing Ordinary Shares representing approximately 1.2 per cent. of the issued ordinary share capital of the Company as at 16 September 2009 (the latest practicable date prior to publication of this announcement). The Directors who hold Existing Ordinary Shares intend to apply for an aggregate of 14.5 per cent. of their combined Basic Entitlement under the Open Offer. In addition, certain Directors have agreed to subscribe for an aggregate of 26,210 New Ordinary Shares in the Firm Placing

• The Firm Placing and Placing and Open Offer are being fully underwritten by J.P. Morgan Cazenove and Numis, subject to, and in accordance with, the terms of the Placing Agreement

• If the resolutions are passed at the General Meeting, and all other conditions are satisfied, it is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. (London time) on 6 October 2009.

Mark Allan, Chief Executive of UNITE, said:

'In recent years, UNITE has successfully evolved its business model to become the UK's leading developer and co-investing manager of high quality student accommodation. Against a challenging market backdrop, we have also taken active steps to strengthen our balance sheet. This has been achieved through the reduction of net debt and release of cash, primarily through a programme of disposals and cost reductions, scaling back our development activity and securing new debt and third party co-investment. These measures, combined with the Group's ongoing robust trading performance, place the business on a solid foundation for future growth. 

'The Board believes that current conditions in the real estate market present an opportunity to acquire well located development sites at attractive prices in London between now and early 2011. Consequently, the Company is now seeking to undertake this fundraising to pursue these opportunities.'

Phil White, Chairman of UNITE, added:

'The supply of good quality, well-located student accommodation continues to lag behind demand. Across the UK, there is only sufficient purpose-built accommodation to house two out of three first year or overseas students, but there is only one bed space for every three students from these groups in London. In this context, the Board believes that London represents a particularly attractive market for expansion, with over 250,000 full time students but only 42,000 purpose-built bed spaces.

'Consequently, we intend to use the proceeds of the Firm Placing and Placing and Open Offer to acquire sites which will form the core of the Company's development programme for completion from 2012 onwards. We believe that the Company is well positioned to take advantage of these opportunities while the current market conditions prevail.'

A conference call for analysts and institutional investors will take place today at 11.30 a.m.  Please contact Dido Laurimore or Laurence Jones at Financial Dynamics on [phone] to obtain the details of the conference call. 

For further information, please contact:

The UNITE Group plc Mark Allan / Joe Lister Tel: [phone]	Financial Dynamics Stephanie Highett / Dido Laurimore / Rachel Drysdale / Laurence Jones Tel: [phone] Email: [e-mail]
J.P. Morgan Cazenove (Joint Sponsor, Joint Financial Adviser, Joint Bookrunner and Joint Broker) Robert Fowlds / Bronson Albery / Shona Graham Tel: [phone]
Numis (Joint Sponsor, Joint Financial Adviser, Joint Bookrunner and Joint Broker) Heraclis Economides / Simon Blank / Alex Ham Tel:  [phone]

Notes to Editors:

The UNITE Group plc

UNITE is the UK's leading developer and manager of student accommodation. It operates in 23 key university towns and cities across England and Scotland and will be operating approximately 38,500 bed spaces for the 2009/10 academic year taking into account anticipated new project deliveries and asset sales to third parties.

In recent years, UNITE has successfully evolved its business model to become a developer and co-investing manager of high quality student accommodation. UNITE's strategy is to grow its national portfolio of purpose-built, professionally-managed, branded student accommodation through the development of properties either itself or through co-investment vehicles. Once completed and stabilised, assets are typically sold to specially created co-investment vehicles in which the Group retains a significant minority stake.

J.P. Morgan Cazenove

J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for UNITE and no one else in connection with the Firm Placing and Placing and Open Offer and will not regard any other person (whether or not a recipient of the Prospectus) as its client in relation to the Firm Placing and Placing and Open Offer and will not be responsible to anyone other than UNITE for providing the protections afforded to its clients or for providing advice in connection with the Firm Placing and Placing and Open Offer or any other matter referred to herein.

Numis

Numis, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for UNITE and no one else in connection with the Firm Placing and Placing and Open Offer and will not regard any other person (whether or not a recipient of the Prospectus) as its client in relation to the Firm Placing and Placing and Open Offer and will not be responsible to anyone other than UNITE for providing the protections afforded to its clients or for providing advice in connection with the Firm Placing and Placing and Open Offer or any other matter referred to herein.

This announcement has been issued by, and is the sole responsibility of, UNITE. No representation or warranty, express or implied, is made or given by, or on behalf of, the Company, J.P. Morgan Cazenove or Numis Securities or any of their affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings or any of their respective directors, officers, employees or advisers or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this announcement and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors or omissions.

IMPORTANT NOTICE: 

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Firm Placing and Placing and Open Offer or otherwise. This announcement is not a prospectus and investors should not subscribe for or purchase any New Ordinary Shares referred to in this announcement except on the basis of information in the Prospectus expected to be published today. 

The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or South Africa. This announcement is not an offer of securities for sale in the United States. The securities discussed herein have not been and will not be registered under the US Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. No public offering of the securities discussed herein is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Australia, Canada, Japan, New Zealand or South Africa. This announcement is not for distribution directly or indirectly in or into the United States, Australia, Canada, Japan, New Zealand or South Africa or to US Persons. The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: 

This announcement contains certain forward-looking statements which may include reference to one or more of the following: the Group's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters. Statements in this announcement that are not historical facts are hereby identified as 'forward-looking statements'. Such forward-looking statements, including, without limitation, those relating to future business prospects, revenue, liquidity, capital needs, interest costs and income, in each case relating to UNITE, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of UNITE and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, the terms and conditions of UNITE's financing arrangements, foreign currency rate fluctuations, competition in UNITE's principal markets, acquisitions or disposals of businesses or assets and trends in UNITE's principal industries.

These forward-looking statements speak only as at the date of this announcement. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, UNITE does not have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules and any law, UNITE expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in UNITE's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur. 

Appendix I contains an expected timetable of principal events. 

Appendix II contains the definitions of certain terms used in this announcement.

This summary should be read in conjunction with the full text of the following announcement.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR TO US PERSONS.

  FIRM PLACING AND PLACING AND OPEN OFFER

INTRODUCTION

UNITE today announces a share issue to raise gross proceeds of £82.0 million (approximately £77.8 million net of expenses) by way of a Firm Placing and Placing and Open Offer. The Firm Placing and Placing and Open Offer will comprise a total of 32,819,972 New Ordinary Shares at a price of 250 pence per New Ordinary Share, representing an 11.8 per cent. discount to the Closing Price of 283.5 pence per Existing Ordinary Share on 16 September 2009 (being the last Business Day prior to the date of the announcement of the Firm Placing and Placing and Open Offer). 9,845,991 New Ordinary Shares will be issued through the Firm Placing and 22,973,981 New Ordinary Shares will be issued through the Placing and Open Offer.

The purpose of the Firm Placing and Placing and Open Offer is to fund the acquisition of new development sites in London, which are intended to be developed for delivery from 2012 onwards. The Board believes that the opportunity in London at this time is compelling, as they believe that there is potential to acquire well-located sites at attractive prices which can then be developed to meet the ongoing shortage of modern purpose-built student accommodation in the city.

BACKGROUND TO AND REASONS FOR THE FIRM PLACING AND PLACING AND OPEN OFFER

An innovative and resilient business model

UNITE is the UK's leading developer and manager of student accommodation. It operates in 23 key university towns and cities across England and Scotland and will be operating approximately 38,500 bed spaces for the 2009/10 academic year taking into account new project deliveries and asset sales to third parties.

As market leader in the UK student accommodation sector, the Group has developed a number of key strengths which the Board believes position the Group well for the future:

• A proven business model which enables UNITE, with a strong track record of developing purpose-built student accommodation, to recycle the equity released on sales of stabilised assets, whilst retaining an interest in such stabilised assets and receiving management fees

• A proven ability to attract co-investment partners to invest in the UK student accommodation sector (both in stabilised assets and, as recently demonstrated by the OCB joint venture described in detail below, in sites under development), thereby increasing the Group's financial resources

• Strong brand perception and reputation amongst student customers, as well as sales and marketing expertise (particularly the development of the Group's proprietary on-line booking system) which helps to maximise occupancy levels (99 per cent. for the 2008/09 academic year) and like-for-like rental growth (anticipated to be between 10 per cent. and 11 per cent. for the 2009/10 academic year, based on bookings received at 10 September 2009) which underpins the Group's financial performance as well as the valuation of the Group's property portfolio

• A professional, profitable and scalable operating platform, built around investment in technology, that has led to enhancements in both service quality and efficiency

• Specialist site identification and acquisition expertise, as well as integrated design, planning and development management expertise, with dedicated in-house teams experienced in managing the entire acquisition and development process

• Well-established relationships with developers, contractors and land agents, as well as universities and local authorities, built up over many years of developing and operating student accommodation and which assist in the development of new accommodation.

In recent years, UNITE has successfully evolved its business model to become a developer and co-investing manager of high quality student accommodation. UNITE's strategy is to grow its national portfolio of purpose-built, professionally-managed, branded student accommodation through the development of properties either itself or through co-investment vehicles. Once completed and stabilised, assets are typically sold to specially created co-investment vehicles in which the Group retains a significant minority stake.

  The evolution of this business model has been achieved through a number of key transactions:

• UNITE has successfully established a number of co-investment vehicles to which it has sold a substantial proportion of its completed investment assets, and some development assets, whilst retaining significant minority stakes and an ongoing management role. The most significant of these are UNITE UK Student Accommodation Fund ('USAF') (established in December 2006), the UNITE Capital Cities ('UCC') joint venture with the Government of Singapore Investment Corporation ('GIC') (established in March 2005) and the joint venture with OCB (established in August 2009). In total, the Group has raised over £500 million of third party equity for such co-investment vehicles;

• In September 2007 UNITE redeemed £265 million of fixed rate asset-backed bonds issued by UNITE Finance One plc ('UFO'), following which it sold the majority of the assets that had been the security for such bonds to USAF; and

• Since 2006, UNITE has sold approximately £228 million of non-core investment properties to third parties, thereby improving the quality of its operational portfolio and increasing the Group's financial resources.

As a result of the steps outlined above, the Group has firmly established the investment market for student accommodation and secured a diversified range of capital sources. In addition, through the sale of completed investment assets, both to third parties and to USAF, UNITE has substantially reduced borrowing whilst generating a valuable new source of revenue in the form of management fees and releasing cash for reinvestment into growth opportunities. The Board believes that these measures have enhanced the resilience of the Group's business model and left it better able to withstand the current challenging economic conditions.

Following this progress, the Group has been able to focus its capital investment in activities where the Board believes returns will be most attractive, most notably development projects in London. UNITE is the largest private sector operator in the capital, with over 5,000 bed spaces in its operational portfolio in the city for the 2009/10 academic year, representing 31 per cent. of UNITE's bed spaces (by value). The Board believes that London continues to represent an attractive opportunity for UNITE.

Measures to strengthen financial position

In the annual report for the year ended 31 December 2008, the Group reported record occupancy across its operational portfolio of 99 per cent. and year on year rental growth of 9.5 per cent. Despite the resilience of the student accommodation market and the Group's strong operational performance, UNITE has not been immune to the severe deterioration in valuations across the commercial property market. In recognition of this and the impact of the current economic downturn, the Company has accelerated or initiated a number of important measures to strengthen its financial position:

• In response to the Board's concerns over escalating land prices, the Group's development activity was scaled back in 2007. This was further reduced in 2008 to conserve cash and restrict future borrowing

• A programme of asset disposals commenced in 2008 has continued in 2009. Sales totalling £325 million were completed by the Group in 2008, of which £154 million were non-core assets sold to third parties and the remainder were core operational properties sold to USAF. UNITE set a target of £150 million of property disposals in 2009. It has already exchanged or completed asset sales in 2009 as at the date of this announcement to a value of £136 million (including the sale of the three properties into the joint venture with OCB (as described below), with a further £55 million in solicitors' hands (although there is no guarantee that any of these sales will complete). The completed or exchanged sales are at an average discount of 2 per cent. to the 31 December 2008 book valuations

• Proactive measures have been taken to improve service efficiency and quality and to reduce operating costs and overheads, including the creation of a joint venture with Connaught Plc which is now providing all planned, reactive and lifecycle maintenance services across UNITE's operational portfolio. The programme that led to these measures commenced in late 2007 and is now substantially complete, and the Board expects that, in total, this programme will result in annualised cash savings of £12 million

• In common with many property companies, the Group's portfolio has suffered declines in value and as a result, the Company has been monitoring its loan to value covenant headroom. In order to improve covenant headroom, management have focused on targeting the delivery of asset sales and rental growth as outlined above and on amending banking facilities with the tightest LTV covenants. Since 31 December 2008, the Group has been successful in renegotiating three banking facilities to extend maturity dates and relax covenants

• Since early December 2008 the Company has secured new debt facilities totalling £250 million either on its own behalf or on behalf of its co-investment vehicles, including a £35 million development facility with Barclays and a £100 million facility with Nationwide which will be used to refinance debt falling due at the end of 2009. Therefore the Group will have no significant debt maturities before September 2012

• As part of UNITE's strategy of moving to a co-investing manager business model, the Company announced on 12 August 2009 that it had entered into an agreement with OCB to establish a development joint venture into which UNITE will sell its 2010 development programme 

• As a result of the asset disposals and the OCB joint venture, Group net debt has been reduced by £54 million since December 2008 and cash of £21 million has been released, giving significant extra strength to the Group's balance sheet.

In addition to the above, the current trading position of the Group remains robust. As at 10 September 2009, reservations had been received for 95 per cent. of the Group's portfolio for the 2009/10 academic year, compared to 97 per cent. at the same point in 2008. Taking into account the prices at which these reservations have been secured, the Group anticipates reporting like-for-like rental growth of between 10 per cent. and 11 per cent. for the 2009/10 academic year.

Well positioned to take advantage of development opportunities

The number of students studying in UK higher education continues to grow and this, coupled with the ongoing shortage of good quality purpose-built accommodation, continues to underpin UNITE's current performance and prospects. Although there is some uncertainty as to the longer term impact of the inevitable pressure on funding for Higher Education, the Board does not believe this is likely to materially impact UNITE's prospects while the current supply-demand imbalance remains.

In the 2007/08 academic year there were 2.4 million students studying in the UK, and there was an increase of 43,000 in the number of students accepted for the 2008/09 academic year. This trend looks set to continue with the number of applications for the 2009/10 academic year up a further 9.9 per cent. year on year (source: UCAS 8 September 2009) and the Government confirming funding for an increase of a further 10,000 places in the 2009/10 intake. In addition, the number of overseas applicants has again grown this year, by 9.9 per cent. compared to the same point in 2008, and funding pressures are encouraging universities to increase overseas intake still further.

London, in particular, is a key market for student accommodation with approximately 250,000 students, which is more than the next five largest UK student markets combined. The Board believes that London represents a particularly attractive market, with only 42,000 purpose-built bed spaces meaning that there is a shortage of purpose-built accommodation. In addition, London has a large international student population (approximately 90,000 students) with high accommodation requirements and expectations.

The supply of good quality, well-located student accommodation continues to lag behind demand. Across the UK, there is only sufficient purpose-built accommodation to house two out of three first year or overseas students. The shortage of accommodation is even more marked in London where there is only one bed space for every three students from these groups.

Whilst the level of demand to study at university continues to grow, conversely the rate of supply of new purpose-built beds is slowing sharply and the Group estimates that the level of net new supply being delivered for 2009 and 2010 will be only approximately 6,500 beds and 4,000 beds respectively, compared to 9,200 beds delivered in 2008. This drop is likely to be largely attributable to economic conditions and the sharp contraction in finance available to all developer/operators in the sector.

Against this background, site values in London have fallen by approximately 50 per cent. since their peak in 2007. In addition, the Group has seen construction costs fall in the same period by approximately 15 per cent.

Whilst it is appropriate for the Group to maintain meaningful cash balances in the event of covenant headroom declining from current levels, the Group now has sufficient financial resources and debt capacity available to recommence a certain level of development activity. The Board believes that the scale of the opportunity to acquire London development sites at attractive prices is likely to be significant between now and early 2011. UNITE has continued to track potential sites closely over the past year and has an identified list of opportunities on which it has already opened discussions with agents.

Subject to receipt of the net proceeds from the Firm Placing and Placing and Open Offer, UNITE plans to acquire sites for development to deliver 1,200 to 1,500 bed spaces a year from 2012 to 2014. The Group expects to enter into agreements to secure the first site acquisitions within the next three to six months. The Group is targeting a development margin in the region of 35 per cent. for these developments, based on an assumed cost (including site acquisition, construction and other costs) of approximately £85,000 to £100,000 per bed, an assumed development yield of 9.5 to 10.0 per cent. and an investment yield of 6.75 per cent. However, there can be no guarantee as to the accuracy of these assumptions (which are based, inter alia, on the Group achieving rents in line with its current anticipated market rates and yields remaining at current levels, amongst other things), nor that the Group will achieve the targeted values on sale of completed assets. In addition, the achievement of the Group's targeted development margin is subject to the risk factors set out in the Prospectus.

The student accommodation market is highly fragmented. The Group's competitors are generally smaller, privately funded businesses that may not benefit from the same diverse capital sources enjoyed by UNITE. As a result, the Board believes that the Group may be better placed than some of its competitors in the current economic environment and that competition for student accommodation development sites could therefore be reduced for the next couple of years.

Further, UNITE's strong relationships with contractors and its track record of development and management make it a partner of choice for many universities. This close working relationship with universities and its track record of completing high quality investments also assist in the planning permission application process, with the result that the Group has an excellent record of securing planning consents in London.

The Board considers that low land prices combined with the Group's recent measures to strengthen its financial position present a compelling opportunity for the Group to acquire well located development sites at attractive prices, particularly in London, between now and early 2011. Consequently the Company is now seeking to undertake the Firm Placing and Placing and Open Offer to pursue these opportunities.

USE OF PROCEEDS

The Directors intend to use the proceeds of the Firm Placing and Placing and Open Offer to acquire sites in London which will form the core of the Company's development programme for completion from 2012 onwards. The Board believes that the Group is well positioned to take advantage of these opportunities while the current market conditions prevail.

CURRENT TRADING AND PROSPECTS

On 25 August 2009, the Group announced its unaudited interim results for the six months ended 30 June 2009. The highlights of these results are as follows:

• Recurring profits before tax increased to £3.5 million (30 June 2008: loss of £2.9 million). Adjusted loss of £13.3 million (30 June 2008: £12.2 million) and IFRS loss of £29.7 million principally due to writedowns in the value of the Group's investment and development portfolio and restructuring costs

• Property investment portfolio outperformance, with a valuation fall for the first six months of 2009 of only -1.9 per cent., compared to the industry average decline as measured by IPD of -13.2 per cent. for the same period, as a result of the Group's robust reservations performance and strong rental growth. Adjusted fully diluted net asset value per share fell by 12 per cent. to 286 pence (31 December 2008: 325 pence)

• UNITE set a target of £150 million of property disposals in 2009. The Group has already exchanged or completed asset sales of £136 million during the 2009 financial year to date, at an average discount to December 2008 valuations of 2.0 per cent. An additional £55 million of asset sales are in solicitors' hands (although there is no guarantee that any of these sales will complete)

• £194 million five year joint venture created with OCB in August 2009 to develop the Group's entire 2010 development pipeline

• Adjusted net debt of £584 million (31 December 2008: £531 million), reducing to £509 million after adjusting for the development joint venture completed since the period end. Net debt has reduced by over £350 million since its peak in November 2006 and, save for two facilities maturing in 2009 that will be refinanced from a recently completed Nationwide facility, the Group has no significant debt maturities before September 2012

• Delivery of the final phases of the Group's operational change programme, with resulting expected annualised savings of £12 million from the 2009/10 academic year.

Following the 2009 A-Level results, the Group has experienced the usual high level of activity and, as at 10 September 2009, reservations across the Group's portfolio for the 2009/10 academic year stood at 95 per cent. compared to 97 per cent. at the same point in 2008. Taking into account the rental levels at which these reservations have been secured, the Group anticipates reporting like-for-like rental growth of between 10 per cent. and 11 per cent. for the 2009/10 academic year.

The Group's continued strong reservations performance and strong rent levels provide a solid foundation for future revenue growth and also underpin the continued resilience in asset valuations expected by the Board (including where USAF's valuations are next announced in early October). Consequently the Board looks to the future with confidence.

JOINT VENTURE WITH OASIS CAPITAL BANK

On 12 August 2009, UNITE announced the formation of a five year joint venture with OCB, to develop three student accommodation properties in London with an estimated value on completion of £194 million. OCB has bought a 75 per cent. stake in the joint venture, investing £39.0 million, with UNITE holding the remaining 25 per cent.

UNITE's three properties under development, amounting to 1,119 beds and representing its entire 2010 pipeline, were sold to the joint venture for consideration of £88.2 million, reflecting an anticipated development yield on cost of approximately eight per cent. As part of the financing for the transaction, UNITE's existing banking facilities relating to each property were reduced by an aggregate of £14 million and transferred into the joint venture. As a result, the joint venture has access to total debt facilities of £109 million, of which £51 million is currently drawn with the remainder available to fund costs to complete.

The estimated value of the three properties on completion is expected to be £194 million, and the anticipated costs to complete them are £69 million. UNITE recorded a loss on disposal of £0.4 million as a result of the transaction, equivalent to 0.2 per cent. of estimated final value.

The completion of the joint venture had a significant immediate positive impact on UNITE's balance sheet:

• The Group's net debt was reduced by £75.2 million (being the £88.2 million cash proceeds received from the joint venture, less UNITE's £13 million re-investment for a 25 per cent. stake) 

• Committed net debt (taking into account costs to complete) was reduced by £144.2 million

• £21 million of cash was released to the Company, providing it with further flexibility in the management of its balance sheet and enabling it to take advantage of future opportunities, where appropriate.

The joint venture has appointed UNITE to undertake the development of the three properties, and to provide ongoing management on completion, leveraging the strong UNITE brand, its specialist development skills and operational platform. In addition, all three properties will benefit from UNITE's modular construction methodology. UNITE will be paid for its services as follows:

• A development management fee equivalent to five per cent. of build cost, payable during development

• An asset management fee, payable from completion of the projects, calculated as 70 bps of gross asset value per annum.

Modules will be supplied by UMS at market value and direct operating costs of the three properties will be borne by the joint venture. This transaction builds on UNITE's strong track record of attracting co- investment, as set out above.

  PROPERTY PORTFOLIO VALUATION

The gross asset value as at 30 June 2009 of the properties in UNITE's portfolio held as at 17 September 2009 (including the full value of properties held indirectly by UNITE through its various co-investment vehicles) was £2,147 million. UNITE's share of these assets was £1,077 million of which £749 million were wholly owned. The valuation reports are set out in Part 7 (Property Valuation Reports) of the Prospectus. The figures in this paragraph have been extracted without material adjustment from the valuation reports.

SUMMARY OF THE PRINCIPAL TERMS OF THE FIRM PLACING AND PLACING AND OPEN OFFER

Structure

The Directors have given careful consideration as to how to structure the proposed fundraising and have concluded that the Firm Placing and Placing and Open Offer are the most suitable options available to the Company and its Shareholders at this time.

9,845,991 New Ordinary Shares will be issued through the Firm Placing and 22,973,981 New Ordinary Shares will be issued through the Placing and Open Offer at 250 pence per New Ordinary Share (to raise gross proceeds of £82.0 million). The Issue Price represents a discount of 11.8 per cent. to the Closing Price of 283.5 pence per Ordinary Share on 16 September 2009 (being the last Business Day prior to the announcement of the Firm Placing and Placing and Open Offer). The Firm Placing and Placing and Open Offer are being fully underwritten by J.P. Morgan Cazenove and Numis subject to, and in accordance with, the terms of the Placing Agreement.

As the Issue Price represents a discount of more than 10 per cent. to the Closing Price of the Ordinary Shares on the last Business Day prior to the announcement of the Firm Placing and Placing and Open Offer, the Listing Rules require that the Company obtain the Shareholders' approval. Accordingly, Resolution 1 (as set out in the notice of General Meeting at the end of the Prospectus) is intended to approve this discount. This discount has been determined based on the Directors' assessment of market conditions following discussions with a number of institutional investors and has been decided upon in order to obtain the level of funds required by the Company under the Firm Placing and Placing and Open Offer.

Firm Placing

The Firm Placees required the Firm Placing in order to give them certainty as to the size of their shareholding following the fundraising. The Firm Placees have agreed to subscribe for 9,845,991 New Ordinary Shares at the Issue Price (representing gross proceeds of £24.6 million). The Firm Placed Shares are not subject to clawback and are not part of the Placing and Open Offer.

Placing and Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 22,973,981 of the New Ordinary Shares proposed to be issued by the Company are being offered to Existing Shareholders by way of the Open Offer (representing gross proceeds of £57.4 million). The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability.

Qualifying Shareholders will have a Basic Entitlement of:

2 Open Offer Shares for every 11 Existing Ordinary Shares

registered in the name of the relevant Qualifying Shareholder on the Record Date.

Qualifying Shareholders may also apply, under the Excess Application Facility, for a maximum number of Excess Shares equal to 0.1 times the number of Ordinary Shares held by them at the Record Date. Applications under the Excess Application Facility may be allocated in such manner as the Directors determine, in their absolute discretion.

The Conditional Placees have agreed to subscribe for the Conditional Placed Shares pursuant to the Placing.

Subject to the obligations of the parties under the Placing Agreement becoming unconditional and it not having been terminated and to the terms of its Placing Letter, each Conditional Placee will be entitled to receive a commission equal to 1.75 per cent. of the Issue Price multiplied by the number of Conditional Placed Shares which have been conditionally placed with the respective Conditional Placee, such commission to be paid by (or on behalf of) the Company.

In the event that valid acceptances are not received in respect of any of the Open Offer Shares under the Open Offer, unallocated Open Offer Shares may be allotted to Qualifying Shareholders to meet any valid applications under the Excess Application Facility and, to the extent that there remain any unallocated Open Offer Shares, they will be placed under the Placing.

Excess Application Facility

Subject to availability, the Excess Application Facility enables Qualifying Shareholders who have taken up their Basic Entitlement in full to apply for any whole number of Excess Shares in addition to their Basic Entitlement up to a maximum number of Excess Shares equal to 0.1 times the number of Ordinary Shares they held at the Record Date. Qualifying Non-CREST Shareholders who wish to apply to subscribe for more than their Basic Entitlement should complete the relevant sections on the Non-CREST Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4.2 of Part 2 (Terms and Conditions of the Open Offer) of the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Excess applications may be allocated in such manner as the Directors determine, in their absolute discretion, and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full or in part or at all.

Application procedure under the Open Offer

Qualifying Shareholders may apply for any whole number of Open Offer Shares subject to the limit on applications under the Excess Application Facility referred to above. The Basic Entitlement, in the case of Qualifying Non-CREST Shareholders, is equal to the number of Basic Entitlements as shown in Box 2 on their Non-CREST Application Form or, in the case of Qualifying CREST Shareholders, is equal to the number of Basic Entitlements standing to the credit of their stock account in CREST.

Qualifying Shareholders with holdings of Existing Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Entitlements.

Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Basic Entitlement and also in respect of their Excess CREST Open Offer Entitlement at 8.00 a.m. on 18 September 2009.

Application will be made for these Basic Entitlements and Excess CREST Open Offer Entitlements to be admitted to CREST. It is expected that these Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 18 September 2009. These Basic Entitlements and Excess CREST Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 18 September 2009. Applications through the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying CREST Shareholders should note that, although their Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that their Non-CREST Application Form is not a negotiable document and cannot be traded.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part 2 (Terms and Conditions of the Open Offer) of the Prospectus and, where relevant, on the Non-CREST Application Form.

Conditionality

The Firm Placing and Placing and Open Offer are conditional, inter alia, upon the following:

• the passing of the Resolutions to be proposed at the General Meeting to be held on 5 October 2009

• Admission of the New Ordinary Shares becoming effective by not later than 8.00 a.m. on 6 October 2009

• the Placing Agreement becoming unconditional in all respects.

If the Resolutions are not passed or Admission does not take place at 8.00 a.m. on 6 October 2009 (or such later time and/or date as J.P. Morgan Cazenove and Numis may determine, not being later than 8.00 a.m. on 20 October 2009), the Firm Placing and Placing and Open Offer will lapse, any Basic Entitlements and Excess CREST Open Offer Entitlements admitted to CREST will, after that time and date be disabled and application monies received under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

Application for Admission

Application will be made to the UK Listing Authority for the New Ordinary Shares to be listed on the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Subject to, among other things, the Resolutions being passed, it is expected that Admission will become effective at 8.00 a.m. on 6 October 2009 and that dealings for normal settlement in the New Ordinary Shares will commence at 8.00 a.m. on the same day. No temporary documents of title will be issued.

The New Ordinary Shares to be issued pursuant to the Firm Placing and Placing and Open Offer will, following Admission, rank pari passu in all respects with the Ordinary Shares in issue at the date of the Prospectus and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

In connection with the applications for Admission and the Firm Placing and Placing and Open Offer, the Company has entered into the Placing Agreement with J.P. Morgan Cazenove and Numis. 

Important notice

Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike with a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders under their Basic Entitlements will not be sold in the market on behalf of, or placed for the benefit of, Qualifying Shareholders who do not apply under the Open Offer, but may be allotted to Qualifying Shareholders to meet any valid applications under the Excess Application Facility or will be placed under the Placing and that the net proceeds will be retained for the benefit of the Company.

Any Qualifying Shareholder who has sold or transferred all or part of its or his registered holding(s) of Existing Ordinary Shares prior to the close of business on 15 September 2009 is advised to consult his stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from it or him under the rules of the London Stock Exchange by those who purchased its or his holding(s) (or part thereof).

DIVIDEND POLICY

The New Ordinary Shares, when issued and fully paid, will be identical to and rank in full for all dividends or other distributions declared, made or paid after Admission and in all respects will rank pari passu with the Existing Ordinary Shares.

In light of market conditions and the opportunity to invest in attractive development opportunities in the coming months, the Board believes it appropriate to conserve the Group's capital. Consequently, UNITE has suspended the payment of a dividend. The Board believes that the funds are currently better used in the operation of the business, until market conditions are clearer and move positive, at which point the Company's intention, subject to compliance with the Companies Acts, is to resume a progressive dividend policy.

GENERAL MEETING

A notice convening the General Meeting, to be held at 9.30 a.m. on 5 October 2009 at the offices of Osborne Clarke, One London Wall, London EC2Y 5EB is set out at the end of the Prospectus. The General Meeting is being convened for the purpose of considering and, if thought fit, passing the Resolutions. The full text of the Resolutions is set out in the notice at the back of the Prospectus.

  DIRECTORS' INTENTIONS

The Directors currently beneficially own, in aggregate, 1,564,489 Existing Ordinary Shares representing approximately 1.2 per cent. of the issued ordinary share capital of the Company as at 16 September 2009 (the latest practicable date prior to publication of this announcement). The Directors who hold Existing Ordinary Shares intend to apply for an aggregate of 14.5 per cent. of their combined Basic Entitlement under the Open Offer. In addition, certain Directors have agreed to subscribe for an aggregate of 26,210 New Ordinary Shares in the Firm Placing.

  Appendix I

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for entitlement to participate in the Open Offer	5.00 p.m. on 15 September 2009
Announcement of the Firm Placing and Placing and Open Offer, publication of the Prospectus and posting of the Prospectus, Form of Proxy and the Non-CREST Application Form	17 September 2009
Ex-entitlement date for the Open Offer	8.00 a.m. on 17 September 2009
Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	8.00 a.m. on 18 September 2009
Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 25 September 2009
Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 29 September 2009
Latest time and date for splitting Non-CREST Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 30 September 2009
Latest time and date for receipt of Forms of Proxy or CREST Proxy Instructions	9.30 a.m. on 1 October 2009
Latest time for receipt of completed Non-CREST Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 2 October 2009
General Meeting	9.30 a.m. 5 October 2009
Admission of, and commencement of dealings in, the New Ordinary Shares	8.00 a.m. on 6 October 2009
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST	by 8.00 a.m. on 6 October 2009
Expected date of despatch of definitive share certificates for New Ordinary Shares in certificated form	within seven days of Admission

Notes:

(1) Each of the times and dates set out in the above timetable and mentioned in the Prospectus is subject to change by the Company (with the agreement of J.P. Morgan Cazenove and Numis), in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, to Shareholders.

(2) References to times in this announcement and the Prospectus are to London times.

  Appendix II

SCHEDULE OF DEFINITIONS

The definitions set out below apply throughout this announcement, unless the context requires otherwise.

'Admission'	the admission of the New Ordinary Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the main market for listed securities of the London Stock Exchange becoming effective in accordance with the Admission and Disclosure Standards;
'Admission and Disclosure Standards'	the requirements contained in the publication 'containing, inter alia, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities;
'Basic Entitlement'	the pro rata entitlement of Qualifying Shareholders to subscribe for 2 Open Offer Shares for every 11 Existing Shares registered in their name as at the Record Date;
'Board'	the board of Directors of the Company from time to time;
'Business Day'	any day on which banks are generally open in London for the transaction of business other than a Saturday or Sunday or public holiday;
'certificated' or 'in certificated form'	a share or other security which is not in uncertificated form (that is, not in CREST);
'Closing Price'	the closing, middle market quotation of an Existing Ordinary Share, as published in the Daily Official List;
'Companies Acts'	the Companies Act 1985, as amended or the Companies Act 2006, as amended, as the context may require;
'Conditional Placees'	any persons who have agreed to subscribe for Conditional Placed Shares;
'Conditional Placed Shares'	the 22,973,981 Open Offer Shares to be allotted and issued by the Company under the Placing subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer or Excess Application Facility pursuant to the Placing Agreement;
'CREST'	the system for the paperless settlement of trades in securities and the holding of uncertificated securities in accordance with the CREST Regulations operated by Euroclear;
'CREST Manual'	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear UK on 15 July 1996 and as amended since);
'CREST member'	a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations);
'CREST participant'	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
'CREST Proxy Instruction'	the appropriate CREST message made to appoint a proxy, properly authenticated in accordance with Euroclear's specifications;
'CREST Regulations'	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended form time to time;
'CREST sponsor'	a CREST participant admitted to CREST as a CREST sponsor;
'CREST sponsored member'	a CREST member admitted to CREST as a sponsored member;
'Daily Official List'	the daily official list of the London Stock Exchange;
'Director'	a director of the Company;
'Disclosure and Transparency Rules'	the disclosure and transparency rules made under Part VI of the FSMA (as set out in the FSA Handbook), as amended;
'EU'	the European Union first established by the treaty made at Maastricht on 7 February 1992;
'Euroclear'	Euroclear UK & Ireland Limited;
'European Economic Area'	the EU, Iceland, Norway and Liechtenstein;
'Excess Application Facility'	the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlement (up to a maximum number of Open Offer Shares equal to 0.1 times the number of Ordinary Shares held by them at the Record Date) in accordance with the terms and conditions of the Open Offer;
'Excess CREST Open Offer Entitlement'	in respect of each Qualifying CREST Shareholder who has taken up his Basic Entitlement in full, the entitlement (in addition to his Basic Entitlement) to apply for Open Offer Shares up to the number of Open Offer Shares comprised in his Open Offer Entitlement, credited to his stock account in CREST, pursuant to the Excess Application Facility, which may be subject to scaling back in accordance with the provisions of the Prospectus;
'Excess Shares'	Open Offer Shares which are not taken up by Qualifying Shareholders pursuant to their Basic Entitlement and are offered to Qualifying Shareholders under the Excess Application Facility;
'Executive Directors'	the executive directors of the Company, being Mark Allan, Joe Lister and John Tonkiss;
'Existing Ordinary Shares'	the Ordinary Shares in issue at the Record Date;
'Firm Placing'	the placing by J.P. Morgan Cazenove and Numis of the Firm Placed Shares with the Firm Placees pursuant to the Placing Agreement;
'Firm Placed Shares'	the 9,845,991 New Ordinary Shares to be allotted and issued by the Company under the Firm Placing;
'Firm Placees'	any persons who have agreed to subscribe for Firm Placed Shares;
'Form of Proxy'	the form of proxy for use at the General Meeting which accompanies the Prospectus;
'FSA' or 'Financial Services Authority'	the Financial Services Authority of the United Kingdom;
'FSMA'	Financial Services and Markets Act 2000, as amended;
'General Meeting'	the general meeting of the Company to be convened pursuant to the notice set out at the end of the Prospectus (including any adjournment thereof);
'GIC'	the Government of Singapore's real estate investment arm;
'IFRS'	International Financial Reporting Standards;
'Interim Report and Accounts'	the unaudited interim report and accounts prepared by the Company for the six months ended 30 June 2009;
'IPD'	the UK IPD Index as published by Investment Property Databank;
'Issue Price'	250 pence per New Ordinary Share;
'J.P. Morgan Cazenove'	J.P. Morgan Cazenove Limited, 20 Moorgate, London EC2R 6DA;
'Listing Rules'	the listing rules made under section 73A of the FSMA (as set out in the FSA Handbook), as amended;
'London Stock Exchange'	London Stock Exchange plc or its successor(s);
'LTIP'	the UNITE Group Long Term Incentive Plan;
'LTV'	loan to value;
'Memorandum'	the memorandum of association of the Company;
'New Ordinary Shares'	the new Ordinary Shares to be issued by the Company pursuant to the Firm Placing and Placing and Open Offer;
'Non-CREST Application Form'	the application form for use by Qualifying Non-CREST Shareholders relating to applications for Open Offer Shares (including in respect of Excess Shares under the Excess Application Facility);
'Non-executive Directors'	the non-executive Directors of the Company, being Philip White, Nigel Hall, Stuart Beevor and Richard Walker;
'Numis'	Numis Securities Limited, The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT;
'OCB'	Oasis Capital Bank B.S.C. (c);
'Official List'	the Official List of the FSA pursuant to Part VI of the FSMA;
'Open Offer'	the invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares on the terms and conditions set out in the Prospectus, and in the case of Qualifying Non-CREST Shareholders, in the Non-CREST Application Form;
'Open Offer Entitlement'	an entitlement to subscribe for Open Offer Shares allocated to a Qualifying Shareholder under the Open Offer;
'Open Offer Shares'	the 22,973,981 New Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer;
'Ordinary Shares'	ordinary shares of 25 pence each in the capital of the Company;
'Overseas Shareholders'	holders of Ordinary Shares with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK;
'Placing'	the conditional placing by J.P. Morgan Cazenove and Numis of the Open Offer Shares pursuant to the Placing Agreement;
'Placing Agreement'	the conditional agreement dated 17 September 2009 between (1) the Company (2) J.P. Morgan Cazenove and (3) Numis;
'Prospectus'	the document dated 17 September 2009, comprising a prospectus relating to the Company for the purpose of the Firm Placing and Placing and Open Offer and the admission of the New Ordinary Shares to the Official List and to trading on the main market for listed securities of the London Stock Exchange;
'Prospectus Directive'	Directive 2003/71/EC and includes any relevant implementing measures in each Member State of the European Economic Area that has implemented Directive 2003/71/EC;
'Prospectus Rules'	the prospectus rules made under Part VI of the FSMA (as set out in the FSA Handbook), as amended;
'Qualifying CREST Shareholders'	Qualifying Shareholders holding Ordinary Shares in uncertificated form;
'Qualifying Non-CREST Shareholders'	Qualifying Shareholders holding Ordinary Shares in certificated form;
'Qualifying Shareholders'	holders of Existing Ordinary Shares on the register of members of the Company on the Record Date with the exception (subject to certain exceptions) of persons with a registered address or located or resident in any Restricted Jurisdiction;
'Record Date'	5.00 p.m. on 15 September 2009;
'Registrar'	Computershare Investor Services PLC;
'Regulation S'	Regulation S promulgated under the Securities Act; one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information from listed companies;
'Regulatory Information Service'	one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information from listed companies;
'Remuneration Committee'	the remuneration committee of the Board;
'Resolutions'	the resolutions to be proposed at the General Meeting;
'Restricted Jurisdiction'	each of Australia, Canada, Japan, New Zealand, South Africa and the United States;
'Restricted Share Award'	a restricted share award made under the terms of the LTIP;
'SAYE Scheme'	The UNITE Group plc Savings-Related Share Option Scheme;
'Scheme'	the Approved Company Share Option Scheme 1999;
'SDRT'	stamp duty reserve tax;
'SEC'	United States Securities and Exchange Commission;
'Securities Act'	the US Securities Act of 1933, as amended;
'Shareholder(s)'	holder(s) of Ordinary Shares;
'stock account'	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
'subsidiary undertaking'	a subsidiary undertaking as that term is defined in section 1162 of the Companies Act 2006;
'subsidiary'	a subsidiary as that term is defined in section 1159 of the Companies Act 2006;
'UCC'	UNITE's Capital Cities joint venture with GIC in which it has a 30 per cent. interest;
'UFO'	UNITE Finance One plc;
'UK Listing Authority'	the Financial Services Authority acting in its capacity as the competent authority in the UK for the purposes of the FSMA;
'UMS'	UNITE Modular Solutions Limited;
'Unapproved Scheme'	the Unapproved Share Option Scheme;
'uncertificated' or 'in uncertificated form'	a share or other security recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which by virtue of the CREST Regulations, may be transferred by means of CREST;
'UNITE' or the 'Company'	The UNITE Group plc, registered in England and Wales with registered number 3199160;
'UNITE Group' or the 'Group'	the Company together with its subsidiaries and subsidiary undertakings;
'UNITE Share Option Schemes'	the LTIP, the Scheme, the SAYE Scheme and the Unapproved Scheme;
'United Kingdom' or 'UK'	the United Kingdom of Great Britain and Northern Ireland;
'United States' or 'US'	the United States of America, its territories and possessions, any State of the United States and the District of Columbia;
'USAF'	the UNITE UK Student Accommodation Fund in which UNITE currently has an 18.6 per cent. interest;
'USV'	UNITE Student Villages Limited, the joint venture with Lehman Brothers in which UNITE has a 51 per cent. interest;
'US persons'	has the meaning ascribed to it under Regulation S; and
'US Shareholder'	a Shareholder (i) whose address appears on the register of members of the Company as being in the United States, (ii) who is a US person or (iii) any other Shareholder to the extent such Shareholder holds Existing Ordinary Shares on behalf of a person located within the United States or a US person.

All references to 'pounds', 'pounds sterling', '£', 'pence' and 'p' are to the lawful currency of the United Kingdom.

All references to 'euro' and '€' are to the lawful currency of the member shares of the EU that adopt a single currency in accordance with the treaty establishing the European Community as amended by the treaty on European Union.

All references to '$' and 'US$' are to the lawful currency of the United States.

All references in this announcement to times are, unless the context otherwise appears, references to the time in London, UK.

 

END

 

 

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