UNITE Reports ?116 Million of Asset Sales

RNS Number : 7406S

Unite Group PLC

05 December 2012

 



Press Release 5 December 2012

THE UNITE GROUP PLC

('UNITE', the 'Group', or the 'Company')

£116 MILLION OF ASSET SALES SECURE UNITE'S DISPOSAL TARGETS FOR 2012

UNITE, the UK's leading developer and manager of student accommodation, today announces that it has concluded the sale of four wholly owned properties for a combined total of £116 million, in line with latest book values. Two of the disposals, totalling £39 million, have been made to third party purchasers and two have been sold to co-investment vehicles for a combined £77 million.

Taking into account other disposals made by UNITE and its co-investment vehicles earlier in 2012, a total of £ 127 million of non-core asset sales have now been completed in the open market, in line with book value, meaning that the Group is on track to achieve its target to reduce leverage to approximately 50% loan-to-value by the end of the year. The £77 million of transactions between UNITE and its co-investment vehicles are in addition to this.

Sales to co-investment vehicles

Disposals to co-investment vehicles comprise the sale of North Lodge, Tottenham Hale (528 beds) to the London Student Accommodation Venture ("LSAV"), our 50:50 joint venture with GIC Real Estate, for £46 million and the sale of Kelvin Court, Glasgow (477 beds) to the UNITE UK Student Accommodation Fund ("USAF") for £31 million. The prices achieved represent an average net initial yield of 6.5%.

Sales to third party purchasers

New Carnegie Court, a 520 bed property in Aberdeen, and Camden Road, a 34 bed property in North London, have been acquired by third party purchasers for combined consideration of £39 million.

In the case of New Carnegie Court, UNITE has sold its leasehold interest in the property to PRUPIM for £33 million, representing a net initial yield of 5.5%. The sale has been achieved following extensive work to restructure the underlying ownership and new 25 year lease granted to the University of Aberdeen.

The property on Camden Road has been sold to Elite Property Group for £6 million and is the second asset they have purchased from UNITE this year.

Richard Simpson, Managing Director of Property at UNITE, commented: 

"These four transactions secure completion of our targeted disposals of both non-core assets to third party purchasers in 2012 and planned sales to co-investment vehicles, and mean that we are on track to reduce leverage in line with plan.  The cumulative sales value is in excess of £200 million and is supportive of current valuations demonstrating the continued attractiveness of the purpose built, student accommodation sector to a growing number of UK and international investors."

- Ends -

For more information, please contact:

The UNITE Group plc Sophie Joyce, [e-mail] Ian Morris, [e-mail]  FTI Consulting Stephanie Highett Dido Laurimore Faye Walters

Tel: [phone] Tel: [phone] Tel: [phone]

Notes to Editors:

About The UNITE Group

The UNITE Group 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 42,000 students in over 130 properties across 23 of the UK's strongest university cities, and has consistently proven high occupancy levels across its portfolio.

The Group 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 2012 UNITE won the South West Business in the Community Carbon Reduction Award for its environmental initiatives and the Global Real Estate Sustainability Benchmark (GRESB) named UNITE as a 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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