Unite Group PLC Equity Raise and Acquisition (4580Z)
May 20 2019 - 2:00AM
UK Regulatory
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: +44 117 302
Candice Macdonald, Head of Communications 7005
Tel: +44 7525 592
Powerscourt 521
Justin Griffiths
Victoria Heslop Tel: +44 20 7250
1446
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END
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