USAF Disposal

RNS Number : 9300W

Unite Group PLC

29 November 2010

 



29 November 2010

THE UNITE GROUP PLC

("UNITE" the "Group")

UNITE ANNOUNCES £144M SALE OF ASSETS TO THE UNITE UK STUDENT ACCOMMODATION FUND

The UNITE Group plc, the UK's leading developer and manager of student accommodation, today announces the completion of the planned sale of assets to the UNITE UK Student Accommodation Fund (the "Fund"), for a cash consideration totalling £143.9 million.

The assets sold comprise 1,679 bed spaces across four well located properties in London, Leeds and Bath. The portfolio is 97% let for the 2010/11 academic year.

The consideration for the transaction, based on an independent valuation performed by CBRE, represents a net initial yield of 6.44% and when compared to the open market value, which is used to calculate the Group's adjusted net asset value, is 1.8% lower than the valuation undertaken at 30 June 2010. This shortfall relates to  an asset specific factor and is not indicative of broader movements of valuation across the portfolio. The disposal crystallises £9.3million of development profits.

UNITE will receive gross proceeds of £143.9 million which will be used to pay down related debt of £104.5million leaving net proceeds of £39.4 million. UNITE will use the net proceeds to reduce gearing further in the near term and to invest into development as appropriate opportunities emerge.

As noted in our Interim Management Statement on 5 November 2010, following completion of this transaction, based on current gearing and liquidity targets, the Fund is now effectively fully invested.

Commenting on the transaction, Joe Lister, UNITE's Chief Financial Officer, said:

"The planned sale of stabilised assets to the UNITE UK Student Accommodation Fund is in line with UNITE's ongoing developer and co-investing fund manager business model. The sale supports the pricing of quality investment assets underpinned by UNITE's ability to continue to deliver rental growth and strong occupancy levels. UNITE will use the net proceeds from the sale to strengthen its balance sheet and invest into attractively priced development opportunities as they arise."

ENDS

For further information, please contact:

The UNITE Group plc Mark Allan, Chief Executive Joe Lister, Chief Financial Officer	Tel: [phone]
Financial Dynamics Stephanie Highett Dido Laurimore Laurence Jones	Tel: [phone]

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 four core areas;

1.  Development: UNITE undertakes the acquisition, planning and development of purpose-built student accommodation in the UK.

2.  Professional property management: UNITE is home to some 38,300 students and has consistently achieved high occupancy levels across its portfolio.

3.  Proactive asset management: Through the continuous assessment of quality and location of its investment portfolio, UNITE are well positioned to deliver value adding strategies to those assets where further opportunities are identified.

4.  Co-investing asset management: Working on behalf of its partners, UNITE acts as Fund Manager for the UNITE UK Student Accommodation Fund in addition to holding a 16.3% stake.  UNITE also manages a number of Joint Venture partnerships.

UNITE works closely with universities and colleges, in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets.

Founded in 1991, UNITE is listed on the London Stock Exchange (UTG).

The UNITE UK Student Accommodation Fund

UNITE established the UNITE UK Student Accommodation Fund at the end of 2006.  The Fund helped transform UNITE's business model to that of a developer of new purpose-built student accommodation and manager of funds which own student accommodation properties operated by UNITE and in which the Company has a significant minority stake.

The Fund's portfolio comprises 19,994 bed spaces in 59 properties across 19 UK markets.  The number of unitholders in the Fund is over 100.

www.unite-group.co.uk

www.unite-students.com

 

END

 

 

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