TIDMUTG
RNS Number : 5451W
Unite Group PLC
10 February 2017
Press release
10 February 2017
THE UNITE GROUP PLC
("Unite Students", "Unite", the "Group", or the "Company")
UNITE ACQUIRES 3,067 BED ASTON STUDENT VILLAGE FOR GBP227
MILLION IN FIRST MAJOR ON-CAMPUS ACQUISITION WITH GIC
Unite Students, the UK's leading manager and developer of
student accommodation, announces that it has acquired Aston Student
Village ("ASV") for GBP227 million in a 50:50 joint venture with
GIC, Singapore's sovereign wealth fund. ASV, which represents
Unite's first major on-campus acquisition, comprises 3,067 beds
across five large, detached properties on Aston University's campus
in central Birmingham.
ASV is currently the only accommodation offered to students at
Aston University, which has a student population of 11,000, with no
additional accommodation available either under direct ownership or
through nominations agreements. The modern, high quality
accommodation is fully occupied.
Aston University has consistently achieved strong league table
positions and is currently ranked 33(rd) in The Times' Good
University Guide. The acquisition provides Unite Students and Aston
University with the opportunity to establish a long-term strategic
partnership, including nominations, in due course. ASV takes
Unite's presence in Birmingham to over 5,000 beds, providing the
opportunity to deliver efficiencies across the whole portfolio in
the city.
Unite is planning to invest in the accommodation over the summer
to provide the next intake of students with the Unite customer
experience. By enhancing the experience and product for customers
and integrating the buildings into our PRISM operating system, we
will drive rental growth opportunities as well as cost and
operational efficiencies. The acquisition creates an excellent
opportunity to demonstrate the benefits of our scale, operational
capability and reputation, and open up further opportunities across
the sector.
The purchase price represents an acquisition yield of 5%, in
line with recent transactions in the student accommodation sector.
This yield will grow to over 6% following investment into the
portfolio and the implementation of the Unite Students platform.
ASV will generate gross annual income of around GBP17 million for
the 2017/18 academic year and will be immediately accretive to
earnings and NAV.
ASV has been acquired into Unite and GIC's LSAV 50:50 joint
venture. Unite will receive management and acquisition fees and the
acquisition is expected to add approximately 1-2p to the Group's
annual EPRA Earnings on a recurring basis.
LSAV is funding the acquisition with 40% equity and 60% debt
(provided by TH Real Estate under a 10-year facility). Unite will
initially fund its share of the acquisition through additional
borrowings, with disposals planned for later in the year offsetting
this increase in net debt. Following the transaction, LSAV's LTV
ratio is 39% and Unite's see-through LTV (on a pro-forma basis) is
38%.
Birmingham is a thriving metropolitan city with the second
largest student population in the UK, with over 70,000 students
resident in the city during term time. The city is home to two
other leading UK universities: the University of Birmingham and
Birmingham City University.
Richard Smith, Unite Students Chief Executive Officer,
commented:
"I am delighted to announce this acquisition, our first on
campus. Birmingham is one of the top cities for students and this
acquisition demonstrates the value of our strong relationships with
Universities and also the benefit of our position as market leader,
both by scale and efficiency and the service that we are able to
offer to students as a result of our PRISM operating system.
"I look forward to strengthening our relationship with Aston
University, working within the campus, helping to support their
growth and providing their students with great accommodation and a
service experience that will support their personal and academic
achievements."
Madeleine Cosgrave, Regional Head, Europe, GIC Real Estate,
said:
"GIC is pleased to strengthen our partnership with Unite, a
leading manager and developer of student accommodation in the UK,
through this acquisition. ASV is a high-quality asset uniquely
located both on-campus and in the city centre. We are confident in
the long-term growth potential of this asset and the student
housing sector which we find attractive for its resilient income
streams."
-ENDS-
For further information, please contact:
Unite Students
Richard Smith, Chief Executive Tel: +44 117
Officer 302 7005
Joe Lister, Chief Financial Officer
Bell Pottinger
Victoria Geoghegan Tel: +44 20
Nick Lambert 3772 2562
Elizabeth Snow
Notes to editors:
About Unite Students
Unite Students is the UK's largest and most established manager
and developer of purpose-built student accommodation. It provides a
home for around 50,000 students, in more than 140 properties,
across 28 leading university cities in England and Scotland. Unite
works in partnership with more than 60 Higher Education
institutions and also lets rooms directly to students.
Unite's purpose is to provide a home to its culturally-diverse
customers, offering them a strong foundation for academic and
personal success. The accommodation is high quality, safe and close
to university campuses, transport links and local amenities.
Students live in ensuite study bedrooms with rents covering all
bills, insurance, 24-hour security, fortnightly cleaning of
communal kitchens and bathrooms and high speed Wi-Fi.
Founded in 1991 in Bristol, The Unite Group plc is a FTSE250
company, listed on the London Stock Exchange, employing more than
1,250 people. It pursues a sustainable growth strategy, designed to
make the most of the resilient nature of the student accommodation
sector. Unite is focused on maintaining its position as the leading
provider of student accommodation in the UK, by having the best
brand, operating the highest quality portfolio and maintaining the
strongest capital structure in the sector. This is achieved with
consistent investment in, and improvement to, the operating
platform; highly selective development activity and asset
management initiatives.
Unite is invested in and operates a two specialist funds and
joint ventures with institutional investment partners, the GBP2
billion Unite UK Student Accommodation Fund (USAF) and the GBP1
billion London Student Accommodation Vehicle (LSAV).
Unite is the founder and major donor of the Unite Foundation.
Since 2012 this has provided free student accommodation and
financial support to 160 young people in the UK who lack family
support.
For more information you can visit Unite's corporate website
www.unite-group.co.uk, the student site www.unite-students.com or
the Unite Foundation www.unitefoundation.co.uk.
About GIC
GIC is a leading global investment firm with well over $100
billion in assets under management. Established in 1981 to secure
the financial future of Singapore, the firm manages Singapore's
foreign reserves. A disciplined long-term value investor, GIC is
uniquely positioned for investments across a wide range of asset
classes, including real estate, private equity, equities and fixed
income. GIC has investments in over 40 countries and has been
investing in emerging markets for more than two decades.
Headquartered in Singapore, GIC employs over 1,300 people across 10
offices in key financial cities worldwide. For more information
about GIC, please visit www.gic.com.sg.
About TH Real Estate
TH Real Estate, an investment affiliate of Nuveen, is one of the
largest real estate investment managers in the world. Managing a
suite of nearly 80 funds and mandates spanning both debt and equity
across diverse geographies, sectors, investment styles and vehicle
types, the firm provides access to every aspect of real estate
investing. With offices in 18 cities throughout the U.S., Europe
and Asia Pacific, over 400 professionals and 60 years of investing
experience, the platform offers deep local expertise coupled with a
sophisticated global perspective. TH Real Estate's investment,
asset management and corporate strategies grow from a deep
understanding of the structural trends that will shape the future
of real estate and responsible investing beyond market cycles. This
'Tomorrow's World' approach sits at the core of our investment
process and business operations, informing our long-term view of
real estate investments for the enduring benefit of both clients
and society. For more information, please visit
www.threalestate.com.
LEI: 213800BBUUWVDH9YI827
This information is provided by RNS
The company news service from the London Stock Exchange
END
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