Sheffield PPP Project

Unite Group PLC
13 September 2002

Date:                13 September 2002
On behalf of:        The UNITE Group plc ('UNITE')
Embargoed until:     0700hrs



UNITE AND UNIVERSITY OF SHEFFIELD CEASE PPP PROJECT

The UNITE Group plc, the UK's leading specialist provider of student and NHS key
worker accommodation services, announces that it has been unable to agree final
terms with the University of Sheffield in respect of the proposed 30 year Public
Private Partnership ('PPP') concession to which UNITE had been appointed
preferred bidder. The PPP concession was anticipated to commence with effect
from 1 January 2003. Following detailed due diligence and extensive negotiation
of a revised and reduced bid, UNITE and the University concluded that the level
of risk associated with maintaining and guaranteeing old, less economic bed
stock would be unacceptable against agreed returns and risk profiles.

The termination of these negotiations will result in the costs incurred since
UNITE was nominated preferred bidder in July 2001, totalling £1.3m, now being
written off against profits in the six months to 30 June 2002.  The £4m of
equity that had been allocated for investment into the University of Sheffield
project will now be released and made available for investment into traditional,
organic development schemes.

The University of Sheffield plans to dispose of some 3,000 of its beds and
replace these in partnership with the private sector.  UNITE has already signed
agreements with Sheffield Hallam University over two of its three properties in
the city, representing 874 beds. UNITE continues to see extremely strong demand
in Sheffield with its three residences already100% full for the next academic
year.

In view of its experience on this project and the considerable opportunities
within its core business of providing high quality affordable accommodation
through traditional organic development, the Board intends to adopt a more
selective approach to PPP contracts in the future, restricting its involvement
to those transactions where significant development activity is required and,
consequently, where it can add most value and achieve best returns.  UNITE will
in future approach PPP opportunities through its regional teams and has
therefore disbanded its centralised PPP bid team, resulting in annual savings of
£0.3m. The termination of this transaction and the more selective approach to
PPP does not affect UNITE's ability to deliver on its target of 8,500 beds per
annum.

Since 1 January 2002 UNITE has achieved financial close on two PPP projects,
totalling 1,026 beds, and concluded construction work on a further two projects
totalling 486 beds (where financial close was achieved in 2001). UNITE remains
in negotiations on only one further PPP concession contract in the NHS sector,
on which its costs incurred following the award of preferred bidder status to
date total only £0.2m.


Commenting on the announcement, Nick Porter, Chief Executive of UNITE, said:

'After many months of detailed negotiation with the University of Sheffield we
have been unable to reach a satisfactory agreement that would allow us to
proceed with the PPP concession.  Given our strong depth of pipeline, we have
many other opportunities in which to invest and we believe it is essential that
our target returns are met by every project.'

'Going forward our focus will be  on  schemes where our Company adds value
through the development process.  UNITE already has a very strong presence in
Sheffield with 1,203 beds and will now seek to meet the significant demand for
student accommodation in the City through further organic developments and
agreements with both Universities.'


Vice-Chancellor of the University of Sheffield, Professor Bob Boucher said:

'We have worked closely with our colleagues in UNITE to investigate the best way
of drawing on our respective strengths to provide top-quality accommodation to
our students, particularly those in their first year and international students.
The University is now seeking to enter into an agreement with UNITE for their
residential property in Wellington Street, which provides accommodation for 319
students.'

'We are aware that the outsourcing of student accommodation is an emerging
market with difficult issues inherent for both universities and the private
sector and that others are watching closely the decisions we take here in
Sheffield.  We are convinced that what both parties have learnt over the past
months will ensure the very best in terms of high-quality accommodation for our
students, as well as providing financial benefits which will enhance the
University's core strengths of research and teaching of an international
standing.'


                                      ENDS



Enquiries to:

Nicholas Porter, Chief Executive Officer        Tel:   [phone]
Simon Bernstein, Chief Financial Officer
UNITE Group plc

Emma Kane, Chief Executive                      Tel:   [phone]
Redleaf Communications Ltd                      Mob:   [phone]


Notes to Editors:

•        UNITE was founded in 1991 by Nick Porter

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

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




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