Unite Share Discussion Threads

[bigmike100] 29/4/2013 19:38

Weekly exponential moving average still well up good sign

[rochdae] 29/4/2013 17:29

No I'm still a fan, so that's 4. Been a strange old story here. I think as ever the market is reluctant with this sort of investment, but now that proerty values are on the up I would expect a return to previous highs, as this is a much better company than 5 years ago.

Roch

[maddox] 29/4/2013 09:35

Well, three of us it would appear:-)

[woody33] 26/4/2013 14:25

Yes there are others out there. Been thinking about buying these for a few years but only just had the confidence to do so.

[bigmike100] 26/4/2013 09:12

By the way the weekly exponential moving average is well and truly up which is a good sign

[bigmike100] 26/4/2013 09:08

Cheers Maddox i picked this up following a big thumbs up in Investors Chronicle onwards and upwards. Keep up the good work.

[maddox] 25/4/2013 22:17

Hi Bigmike,

Thanks. I thought I was alone on here! I've no info on the current rise and no particularly large deals that might indicate a significant buyer in the market.

However, Unite's solid performance has continued As reported on the 9th Apr the Unite Student Accommodation Fund's NAV rose 1% in the first quarter. This record of continual growth against a backdrop of double dip recession and stagnation is very attractive. Perhaps more investors are deciding to buy into this success story. It's a mystery to me why I appear to be Unite's only fan in a country obsessed with property.

Are there any more followers of Unite out there?

Regards, Maddox

[bigmike100] 24/4/2013 15:44

Maddox you are doing a great job keep it up great rise today anyone know why?

[maddox] 11/3/2013 21:22

Investors Chronicle Share tip update:
Unite's share price is up 13 per cent since our latest buy tip (23 November 2012). But the company's growth profile means the shares still trade on a 20 per cent discount to expected NAV - an attractive entry point for a group with further self-help potential in a buoyant market. BUY.

[maddox] 06/3/2013 11:05

A very strong set of finals from Unite today, highlights posted below. Despite the rise in the share price the adj. NAV at 350p is 14% ahead of today's share price (305p as I post). Also, very pleasing to see the acceleration in earnings coming through (up 280%) leading to an 128% increase in dividends (from 1.75p to 4p).

With a sound strategy and evidently competent execution in a growing market - the future looks very positive for Unite.

HIGHLIGHTS

Strong financial performance

Net Portfolio Contribution ("NPC") up 74% to £19.1 million (2011: £11.0 million); Adjusted earnings per share up 280% to 9.9 pence (2011: 2.6 pence), representing a yield on opening adjusted NAV of 3.1%;

Adjusted net asset value ("NAV") per share up 10% to 350 pence (2011: 318 pence), equating to a total return on equity (including dividends) of 11.3%;

Final dividend increased to 3.0 pence per share (2011: 1.25 pence), making 4.0 pence for the full year (2011: 1.75 pence).

Portfolio quality enhanced further

£209 million development programme completed on time and to budget;

£128 million of non-core assets sales target achieved;

90% of the UNITE investment portfolio (including share of co-investment vehicles) is now classified as core (2011: 82%);

London weighting of 45% increasing to over 50% when portfolio built-out.


Capital structure strengthened

Adjusted loan-to-value ratio reduced to 52% from 54% at December 2011;

Weighted average loan maturity extended to 4.9 years (2011:2.9 years) and average cost of debt reduced to 5.5% (2011: 5.7%);

Strategically important joint venture with GIC extended (to 2022) and expanded (to £1 billion), providing greater visibility of development pipeline financing and returns and allowing UNITE to accelerate London development activity while returns remain compelling.



Positive outlook

Student numbers for 2013/14 academic year likely to increase by 25,000 to 30,000 following positive Government policy announcements and 3.5% growth in applications;

Net positive demand/supply movement of approximately 18,000 after taking into account 9,500 new beds in the market for 2013/14;

Reservations for 2013/14 at 62% as at 5 March 2013 (2012: 59%);

Three developments secured for delivery in 2014 and 2015, expected to contribute a further 19 pence per share of NAV uplift;

Good progress with LSAV London development plans, with first project secured (759 beds) and a second scheme (950 beds) under lock-out.

Rental growth expected to be in line with recent years.

[maddox] 14/12/2012 13:13

It would appear that the 'apparent' lack of capital to fund student accommodation developements may no longer be such a problem....

"China lowered the dam last week. Billions in capital will now be allowed to flow into western assets. New rules allow Chinese funds to invest 15% of their cash abroad.

That tots up to £90 billion from the top four insurers alone. Every commercial property agent in London is getting terribly excited. All are jockeying for position to provide bricks-and-mortar investment advice."

"Beijing-based Ginkgo Capital has been reported as looking hard to invest in student accommodation."

"The Chinese have been looking at offices in London," says Jonathan Baines of Colliers. "But the next wave will be looking at investing in residential and student accommodation.""

[maddox] 05/12/2012 10:37

Unite has sold four properties for £116m - in line with latest book values. Two of the disposals, totalling £39m, have been made to third party purchasers and two have been sold to co-investment vehicles for a combined £77m.

This provides further evidence that the market for student accommodation is performing well and that values are being maintained. The reduction in gearing will please some analysts but seeing as Unite has had no apparent problem in raising capital this just gives further reassurance and hopefully access to even cheaper bank finance in the future.

[maddox] 24/11/2012 09:40

Espirito Santos analyst Michael Burk expects NAV of 348p by 31 Dec.

[maddox] 22/11/2012 23:25

Investors Chronicle tip Unite as a Buy at 271p. Key reasons given are the large discount to NAV, strong market and growth potential.

[maddox] 16/10/2012 09:54

Hi northernlass,

Richard Watts has just increased Old Mutuals stake in UTG:

NOTIFIABLE INTEREST

The Company has been informed, by notice received today, that Old Mutual Asset Managers (UK) Ltd has voting rights in respect of 8,575,390 shares in the Company, representing 5.34% of the total voting rights in the Company.

Regards, Maddox

[maddox] 13/10/2012 08:05

Onwards and upwards.

UTG's sale today of one of their smaller properties at a price 'supportive' of its 30th June 335p NAV valuation (and thus its share price discount) has gone down well. The share price closing above 270p.

This is one of a number of sales that UTG will make this year in order to recycle funds into new developments. Let's hope that each sale RNS has the same effect on the share price.

[maddox] 09/10/2012 22:54

Thanks northernlass,

Getting a bit fed up talking to myself on here. Good to get some corroboration of the attractions of Unite. The interesting factoid from Richard Watts is the circa 15% annual growth in 'book value' that he foresees. I assume that book value equates to NAV.

Regards, Maddox

[northernlass] 08/10/2012 06:03

OLD MUTUAL'S RICHARD WATTS PICKS UNITE GROUP

In a video interview, Morningstar journalist Alanna Petroff spoke with fund manager Richard Watts from Old Mutual about his favourite stock picks. One of his choices was real estate company Unite:

PETROFF: Okay. We have UNITE, that's in the housing and, well, residential sector. Tell me a little bit about UNITE.

WATTS: UNITE is a real estate company. UNITE owns and operates student accommodations. So you think when students go to university, the typical accommodation here would be provided by someone like UNITE. UNITE builds the accommodation and rents the rooms out. I mean it's that simple.

The story here is that UNITE trades at a substantial discount to its net asset value. So this is the book value of the company. It's roundabout 30% discount today. Now, looking at the company and looking at the prospects, we think net asset value will grow at roundabout 15% per annum. So what you have here is a re-rating story as the discount-to-book value unwinds through time and the fact that that book value should grow at roundabout 15% per annum. So in our view, this is actually very attractive.

PETROFF: Why was everyone ignoring this stock? I mean trading at a discount that seems remarkable.

WATTS: Yeah. I mean, when we bought into the share, it was trading at roundabout a 50% discount. So 30% today but really substantial discount when we first bought in. There was a lot of fear around basically. Looking at the student market in the UK with the tuition fee increase from £3,000 to £9,000, and many people out there thought that would put a lot of students going off to university. Clearly, obviously, if your business is renting rooms out, the fear was ithat actually your occupancy levels would fall. And it's not proven to be the case. Actually there has been a little bit of an impact on student numbers but for UNITE, occupancy levels are currently 98% to 99%. So, not really much of an impact at all.

PETROFF: And no discounting their rooms for rent, or anything like that?

WATTS: No. Rental growth has been pretty good. We think rental growth will be something in the range of 3% to 4% this year. When you actually sort of compare that with other real estate stocks, 3% rental growth is pretty attractive at the current point in time. So, it really does stack up on a number of measures for this company.

You can watch the video here:


P.S.
Here's some links about SCLP, one of the hottest stocks at the moment:

[maddox] 02/10/2012 17:10

The re-rating continues on the back of strong volume and has closed just shy of 270p. I'll leave the technicals to others but UTG is looking pretty solid above 240p.

With the last reported adj. NAV of 335p there is still a good discount on offer at this price.

[maddox] 14/9/2012 18:23

More excellent news from Unite.

The extension of the UCC JV and new finance underpins Unite's London focused development strategy. It will allow Unite to expand its development activities without increasing its gearing. This looks like a great deal that de-risks Unite and under rights its prospects for the next two years at the least.

[maddox] 04/9/2012 15:22

Student Accommodation as an investment asset has been pioneered in the UK by Unite. What was initially regarded as an obscure niche of the Investment Property Sector is now the star performer. The Unite UK Student Accommodation Fund is the top-performing UK pooled property fund this year in the AREF/IPD Property Fund Index. The USAF produced a return of 8.5% in the first half-year, including 5.7% in the second quarter.

As the Ft reports in an article yesterday:

This has encouraged new entrants into the market and thus some competition but has also served to legitimize the asset class. For Unite this should mean that raising new capital and disposing of assets will be far easier, and the prices obtained will be better. It should also make Unite as a business appear less risky and the discount to NAV to continue to shrink. It was 42% prior to these recent results but is still 34% today.

[maddox] 31/8/2012 17:09

Hi ben,

Yes, I like to see a management team respond well to a crisis - its the acid test for me. Once you see that the management team are competent you can sleep at night!

Unite did come up with a x-graduate offering call 'Cityocity' or similar - but that I think got shelved in response to the credit crunch.


Regards, Maddox

[ben gunn] 31/8/2012 16:49

Hi Maddox

yes a holder (and cautious ramper on the Naked Trader discussion board before the results were issued).
I have held on and off for 10 years so capital GAINS are quite an adventure. Their new block in Southwark is right in the way of my son's view from his 5th floor flat on Southwark Bridge Rd.
I dont see 25% as a progressive dividend policy but with their "see through" gearing I imagine its all we get for now. I have some confidence in the management team, I am impressed that they did good work on the balance sheet to avoid being rubbed out in the recession.

The underlying product is excellent so I expect to hold for the next 25 years.

When will they learn that students are "not the only fruit"?

[maddox] 30/8/2012 13:16

Hi Ben,

I take your point regarding dividend yield - but surely you wouldn't be looking at Unite for income? At this stage in the business development capital gain is what's on offer currently. Although, as the rental management business scales up we should see more profit and the Company has now declared a progressive dividend policy. Even so, I doubt UTG would feature in a share portfolio aimed at income.

Are you a holder Ben?

Regards, Maddox