Site Acquisition

RNS Number : 5536X

Unite Group PLC

14 January 2014

 



14 January 

THE UNITE GROUP CONTINUES REGIONAL DEVELOPMENT WITH ACQUISITION OF CENTRAL NEWCASTLE SITE

The UNITE Group plc, the UK's leading developer and manager of student accommodation, today announces that it has exchanged contracts to acquire a student accommodation development project in Newcastle city centre, subject to achieving planning consent. The 200,000 square foot scheme will have a total development cost of £31 million and is expected to deliver a 9.5-10% yield on cost, in line with UNITE's target returns. The prime city centre site will be transformed into a home for approximately 600 students, close to the city's two universities and is targeted to open in 2016.

The wholly owned scheme will be the first project to be funded from the proceeds of the Group's June 2013 share placing and accounts for approximately 25% of the capital raised. UNITE is also in exclusive negotiations to acquire three further projects in similarly strong regional locations and which are expected to exchange later in the first quarter of 2014. When contractually secure, these three further projects will account for the remainder of the June 2013 share placing proceeds and are supportive of the Group's target returns.

As reported in June 2013 at the time of the share placing, UNITE expects shareholders to benefit from NAV accretion from 2014 onwards as capital is deployed into regional developments and from earnings per share accretion from 2015 onwards as projects are completed and let, thereby supporting the Company's key strategic objective of increasing recurring earnings.

Richard Simpson, Managing Director of Property for UNITE said:

"This acquisition marks good progress with UNITE's selective regional development programme and is a prime example of how we are investing the proceeds from our 2013 share placing; it is in an excellent central location, well positioned for both Newcastle's universities and in a market we expect to experience continued growth. 

"The fundamentals of the student accommodation market remain strong and will potentially be bolstered further by the Government's plans to remove the student number cap in 2015, which could itself lead to an increase in enrolments of up to 12%. UNITE is well positioned for continued growth both through its existing, strong portfolio and new regional developments."

The new property will expand UNITE's existing presence in Newcastle, where the Group has four properties comprising over 1,000 beds. The property will include communal space designed to enhance students' living and learning experience, UNITE's latest specification en-suite cluster rooms, WiFi internet throughout the property and environmental features, such as LED lighting. 

ENDS

For further information, please contact:

The UNITE Group plc Sally Quigg, Head of Corporate Communications	Tel: [phone]
Bell Pottinger Victoria Geoghegan Nick Lambert Elizabeth Snow	Tel: [phone]

About The UNITE Group 

UNITE is the UK's leading developer and manager of student accommodation, with a business model that focuses on two core areas:

1.       Development and Asset Management: UNITE undertakes the acquisition, planning and development of purpose-built student accommodation in the UK. Through the continuous assessment of quality and location of its investment portfolio, UNITE is well positioned to deliver value-adding strategies to those assets where further opportunities are identified. Working on behalf of its partners, UNITE acts as Fund Manager for the UNITE UK Student Accommodation Fund in which it owns a 16.3% share. UNITE also manages a number of Joint Venture partnerships.

2.       Professional property management: UNITE is home to 41,000 students in over 120 properties across 23 of the UK's strongest university cities, and has consistently proven high occupancy levels across its portfolio.

UNITE works closely with higher education institutions in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets. In May 2013 UNITE was awarded Student Accommodation Provider of the Year at Property Week's RESI Awards. UNITE has also been recognised by the Global Real Estate Sustainability Benchmark (GRESB) as a European regional sector leader for sustainability.

Founded in 1991, UNITE is a FTSE 250 company listed on the London Stock Exchange (UTG). For more information, please visit www.unite-group.co.uk  or www.unite-students.com   

 

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