USAF Valuation

RNS Number : 3081Y

Unite Group PLC

04 July 2008

 



Date:                    4 July 2008

On behalf of:         The UNITE Group plc

Embargoed until    0700hrs

30 JUNE 2008 VALUATION OF THE UNITE UK STUDENT ACCOMMODATION FUND

0.5% rise in portfolio valuation over the quarter demonstrates resilience of

student property 

The UNITE Group plc ('UNITE') today reports the Estimated Net Asset Value* as at 30 June 2008 of the UNITE UK Student Accommodation Fund (the 'Fund'). The Fund, which is invested solely in provincial direct let student accommodation, was launched on 15 December 2006 and UNITE acts as its manager as well as retaining a co-investment stake.

The Fund's Estimated Net Asset Value as at 30 June 2008 was £1.053 per unit (31 March 2008: £1.002 per unit, 31 December 2007: £1.020 per unit), representing an increase of 5.1% in the quarter (3.2% year to date).

In arriving at the value of the Fund's units, its property portfolio was independently valued at £833 million, representing an increase of 0.5% for the quarter and the portfolio is now broadly in line with the 31 December 2007 valuation. Valuations continue to perform strongly, outperforming the wider UK property market and are supported by asset sales undertaken by the Fund during the quarter. The impact of 11 basis points of yield expansion in the second quarter was offset by quarterly rental growth relating to the forthcoming 2008/09 academic year, driven by the continuing strong reservations performance. 

As at 30 June 2008, reservations for the forthcoming 2008/09 academic year have been received for 14,534 bed spaces, representing 82% of the Fund's portfolio. This represents a significant increase compared to the same time in 2007 when reservations had been received for 69% of the same bed spaces.

A positive movement in the market value of interest rate swaps held by the Fund contributed to the balance of the increase in value of the units. 

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

'The Fund's performance in the second quarter of 2008 demonstrates the ongoing resilience of the student accommodation sector and its strong relative performance against the broader real estate market based on its ability to generate consistent rental growth in the face of challenging broader economic conditions. Anticipated pressure on yields has again been offset by further quarterly rental growth underpinned by the strong reservations performance of the Fund's portfolio for the forthcoming academic year.' 

Notes:

* Estimated Net Asset Value excludes any non-capital profits accruing during the period.

ENDS

For further details please contact:

Joe Lister                                                                        Telephone: [phone]

The UNITE Group plc

Stephanie Highett / Dido Laurimore / Laurence Jones          Telephone: [phone]

Financial Dynamics

Email: [e-mail] / [e-mail] / laurence.jones @fd.com

About the UNITE Group

UNITE is the UK's leading provider of student accommodation, with a business model that focuses on being a developer and co-investing asset manager. It operates accommodation for some 38,000 students across 129 properties throughout 29 key university towns and cities across England, Wales and Scotland.  UNITE Group undertakes the planning, development and management of sites, often working closely with the universities and colleges, in order to deliver high quality, well-located student accommodation and hospitality services at affordable prices in strong higher education markets.

Together with its development pipeline, UNITE Group has a property portfolio under management valued at c. £2.9 billion on completion. UNITE Group's strategy, set out at the beginning of 2007, aims to double the size of its UK business by 2012. In 2007 UNITE Group expanded into the new field of graduate housing in London, by opening a 62 studio project in Regents Park. It has a further three projects planned in London for 2008/09.

With student rents resilient to economic cycles, and the continued growth in student numbers, especially from overseas, UNITE Group developments typically show high occupancy levels in a market where there is a general shortage of quality supply.

Founded in 1991, UNITE is listed on the London Stock Exchange (UTG) and is a FTSE 250 company.

UNITE UK Student Accommodation Fund

At the end of 2006, UNITE established the £1billion UNITE UK Student Accommodation Fund and sold an initial portfolio to it for £515 million. The principal objectives of this transaction were:

• to release capital that was tied up in mature, stabilised investment assets for investment into higher added value development activity;

• to provide UNITE with more growth capital in the medium term; and

• to diversify UNITE's sources of income by providing a new, valuable revenue stream arising from management fees from the Fund.

The Fund helped transform UNITE's business model to that of developer of new purpose-built student accommodation and manager of funds which own student accommodation properties operated by UNITE and in which the Group has a significant minority stake.

The Fund has invested in direct let assets in provincial markets in the UK.

 

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