Unite announces Â£342 million disposalSource: RNS
18 June 2021
THE UNITE GROUP PLC
('Unite Students', 'Unite', the 'Group', or the 'Company')
UNITE ANNOUNCES £342 MILLION DISPOSAL TO LSAV JOINT VENTURE
Unite Students, the UK's leading owner, manager, and developer of student accommodation, today announces the disposal of two London properties to its London Student Accommodation joint venture ('LSAV') with GIC for £342 million (Unite share £171 million), in line with book values and reflecting an average net initial yield of 4.0%.
The properties are located in Wembley and Whitechapel and offer 1,358 bed spaces, of which the majority are direct-let to students. The Wembley property, Arch View House, was completed for the 2020/21 academic year under a forward fund contract. The two properties had a gross asset value of £338 million as at 31 December 2020 and are valued based on stabilised net operating income of £14.2 million for the 2020/21 academic year. The disposal to LSAV follows the extension of LSAV to 2032 announced on 4 May 2021.
LSAV will fund the acquisition through £208 million of equity from Unite and GIC and a £140 million 8-year loan facility provided by Barings. Upon completion, the Group's see-through LTV reduces to 30% on a pro forma basis after also adjusting for the £90 million of disposals announced on 30 March 2021. The net disposal proceeds will initially be used to repay Group debt ahead of reinvestment into the development pipeline and further growth opportunities over time. The transaction will result in a small dilution to 2021 EPRA earnings of 0.4 pence per share. Accordingly, the Group retains its EPRA EPS guidance of 27-30 pence for 2021.
Unite will continue to manage and operate the properties under its management agreement with LSAV. Following the transaction LSAV will hold gross property assets valued at £1,677 million and net assets of £1,041 million on a pro forma basis.
Richard Smith, Unite Students Chief Executive, commented:
"I am delighted to announce further growth of our LSAV joint venture with GIC. This follows our announcement of LSAV's 10-year extension in May and reflects a strong endorsement of both our sector-leading operating platform and the purpose-built student accommodation sector from GIC. The transaction means we have now delivered over £260 million of disposals in the year to date on a Unite share basis. This provides us with significant capacity to reinvest in our development pipeline, including opportunities in London."
For further information, please contact:
Richard Smith / Joe Lister / Michael Burt Tel: +44 117 302 7005
Unite press office Tel: +44 117 450 6300
Justin Griffiths / Victoria Heslop Tel: +44 20 7250 1446
About Unite Students
Unite Students is the UK's largest owner, manager and developer of purpose-built student accommodation, serving the country's world-leading Higher Education sector. We provide homes to 73,000 students across 173 properties in 25 leading University towns and cities. We currently partner with over 60 Universities across the UK.
Our people are driven by a common purpose: to provide a 'Home for Success' for the students who live with us. Unite's accommodation is safe and secure, high quality and affordable. Students live predominantly in ensuite study bedrooms, with rents covering all bills, insurance, 24-hour security and high-speed Wi-Fi. We also hold a five-star British Safety Council audit rating.
Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index. Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £3 billion Unite UK Student Accommodation Fund (USAF) and the £2 billion London Student Accommodation Vehicle (LSAV).
For more information, visit:
Unite's corporate website www.unite-group.co.uk
The student site www.unitestudents.com