Unite Group PLC Equity Raise and Acquisition (4580Z)

TIDMUTG

RNS Number : 4580Z

Unite Group PLC

20 May 2019

 
 
   Press release 
 
   20 May 2019 
 

THE UNITE GROUP PLC

('Unite Students', 'Unite', the 'Group', or the 'Company')

UNITE UK STUDENT ACCOMMODATION FUND GBP250M EQUITY RAISE AND GBP111M ACQUISITION

The Unite Group plc, the UK's leading manager and developer of student accommodation, announces the Unite UK Student Accommodation Fund ('USAF') has successfully raised GBP250 million of new equity from external investors. The proceeds represent 17% of USAF's NAV as of March 2019.

Unite has agreed to sell three assets to USAF for a total consideration of GBP111 million (Unite share GBP83 million), representing a net initial yield of 5.5%. The assets are located in Portsmouth and Leeds and total 1,223 beds. On a pro forma basis Unite Group's LTV falls to 25%.

Unite is not participating in this equity raise in order to retain funding capacity for its secured development and partnerships pipeline and future investment opportunities. Unite's stake in USAF will reduce from 25% to 23% when the equity is fully drawn. These sales form part of planned disposals of GBP100-150 million (Unite share) during 2019.

Following the acquisition, USAF has significant further investment capacity of GBP250-300 million and has a number of further investment assets that are currently under offer from third parties that it expects to acquire over the coming few months.

Joe Lister, Unite Students Chief Financial Officer, commented:

"Demand for high quality investment opportunities in the purpose built student accommodation sector remains strong with the full allocation of new equity being taken up by investors. The confidence shown in both the fund's ability to deliver consistent returns and Unite's ability to drive value from its operating platform has allowed USAF to raise GBP250 million. The equity raised will allow USAF to continue to improve the quality of the portfolio by continuing to invest in the strongest markets."

ENDS

About USAF

USAF is a non-listed open-ended fund focused on acquiring high quality student accommodation in university towns and cities across the UK. In March 2019, the fund was independently valued at GBP2,266 million, making it the country's largest specialist student accommodation fund for non-direct investors.

Launched in 2006, USAF has established a track record of successful long term investment in locations where demand for accommodation is consistently high. With a portfolio of 24,771 beds in 67 properties and 21 cities, it is among the top performing funds in the MSCI/AREF UK Specialist Fund Index. All of USAF's profits are paid out in the form of cash distributions.

All of USAF's properties are managed by Unite according to an exacting set of brand standards, focused on the things that students value most. For Unite, the fund provides additional investment capacity and represents an important component of the company's balance sheet. This funding flexibility in turn delivers scale which, when combined with Unite's market leading operating platform, helps drive operating efficiencies.

USAF's strategy remains focused on providing a vehicle for long term institutional investors to access a diversified portfolio of high quality student accommodation, managed by the UK's leading operator, which delivers sustainable earnings. All investments are determined on the basis of strict criteria focused on aligning the fund with high and mid-ranked universities in the best locations.

For further information, please contact:

 
 Unite Students 
  Joe Lister, Chief Financial Officer           Tel: [phone] 
  Candice Macdonald, Head of Communications     7005 
                                                Tel: [phone] 
  Powerscourt                                   521 
  Justin Griffiths 
  Victoria Heslop                               Tel: [phone] 
                                                1446 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

MSCSFMFLWFUSEEI

(END) Dow Jones Newswires

May 20, 2019 02:00 ET (06:00 GMT)