USAF Valuation

RNS Number : 0628H

Unite Group PLC

06 July 2012

 



6 July 2012

THE UNITE GROUP PLC

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

30 JUNE 2012 VALUATION OF

THE UNITE UK STUDENT ACCOMMODATION FUND

The UNITE Group plc, the UK's leading developer and manager of student accommodation, today reports the Estimated Net Asset Value* ("NAV") of the UNITE UK Student Accommodation Fund (the "Fund") as at 30 June 2012.

The NAV as at 30 June 2012 was £660.0m, reflecting an increase of 3.8% during the second quarter of 2012 (31 March 2012: £635.6m).

The principal components of the movement in net asset value were as follows:

Effect on Estimated NAV:	Q2 2012	Q2 2011
Movement in property values	1.8%	2.0%
Movement in swap values	-0.1%	-1.1%
Partial Landsbanki recovery	2.0%	-
Other factors	0.1%	0.2%
Increase in Estimated NAV	3.8%	1.1%
Increase in underlying gross property portfolio value	1.0%	1.0%

In arriving at the value of the Fund, its property portfolio, which comprises 21,280 beds in 59 properties across 20 UK towns and cities, was independently valued at £1,270m. During the quarter the Fund sold a portfolio of four assets in Manchester comprising 437 beds for £21m, in line with their carrying value. The movement during the quarter represents a like-for-like increase of 1.0% (1.5% in the year to date) in the underlying value of the property portfolio, driven by strong quarterly rental growth against a stable valuation yield during the quarter of 6.67% (31 March 2012: 6.67%). In line with previous years, further rental growth is expected to be achieved as reservations for the forthcoming 2012/13 academic year progress.

Reservation levels for the forthcoming academic year stand at 71% of the Fund's bed spaces reserved. This is slightly behind the 73% achieved at the same point in 2011, when applications were accelerated as students looked to enter university prior to the tuition fee increases, but in line with the 71% achieved at the same point in 2010.

In June, the Fund received a £12.5m payment from Landsbanki, representing the first instalment of repayment of the £30m deposit it placed with the bank in 2008. The Fund provided for the full amount of the deposit in 2008 and, therefore, the recovery added to the growth in NAV by 2.0% in the quarter. UNITE's share of the recovery is £2.6m. The Fund's status as a priority creditor is now unencumbered, meaning further payments will be received over time as Landsbanki continues to liquidate its assets. The Winding-up Board of Landsbanki has estimated that 100% of the deposit will be repaid, although has not provided a clear indication of timescales. Due to the inherent uncertainty in the timing of recovery, future receipts will be accounted for when received.

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

"The Fund's portfolio has delivered further rental uplift, with continued growth anticipated in the third quarter of 2012 as the 2012/13 academic year lettings cycle completes. Recovery of the first tranche of the Fund's Landsbanki deposit during June is a very positive development, adding £2.6m to the Group's net asset value and creating acquisition capacity for the Fund."

* Estimated Net Asset Value represents the capital position of the Fund and does not include undistributed income.

ENDS

For further information, please contact:

The UNITE Group plc Joe Lister, Chief Financial Officer Paul Harris, Communications Director Sally Quigg, Head of Corporate Communications	Tel: [phone]
FTI Consulting Stephanie Highett Dido Laurimore Toyah Simpson	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 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 addition to being 16.3% shareholders. UNITE also manages a number of Joint Venture partnerships.

2.    Professional property management: UNITE is home to some 40,000 students and has consistently proven high occupancy levels across its portfolio.

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).

www.unite-group.co.uk

www.unite-students.com

 

END

 

 

MSCEAXXSEDNAEFF