Unite Group disposes of 14 properties, pockets £84.7m
Student accommodation manager and developer Unite Students has exchanged contracts for the disposal of 14 properties for £180.5m, its share of which is £84.7m, to Singapore Press Holdings.
FTSE 250
19,727.26
10:05 25/04/24
FTSE 350
4,444.40
10:05 25/04/24
FTSE All-Share
4,397.92
10:05 25/04/24
Real Estate Investment Trusts
2,222.23
10:05 25/04/24
Unite Group
922.50p
10:04 25/04/24
The purchase price reflects a net initial yield of 6.3% and is marginally below book value, and completion is due later this month.
The portfolio is made up of a combination of wholly owned, UK Student Accommodation Fund and London Student Accommodation Vehicle properties located in Plymouth, Huddersfield, Sheffield, Birmingham, Bristol and London.
As a result of the disposal, Unite no longer has a presence in Plymouth or Huddersfield and the group the "efficiency and quality" of the portfolio have been enhanced.
The transaction is in line with Unite's strategy to recycle capital through the disposal of assets with lower than average growth prospects and reinvest into developments increasingly focusing on high and mid-ranked universities, which have the best long-term growth prospects.
Upon completion of the pipeline, high and mid-ranked universities will account for 90% of Unite's portfolio. The company’s loan-to-value will fall to 25% after the disposal, providing capacity to add further developments or University Partnerships to the pipeline.
Chief executive Richard Smith said: "This sale is an important part of our ongoing strategy of creating a high-quality portfolio aligned to the Universities with the highest student demand and the best long-term growth prospects.
"The UK's high and mid-ranked Universities are some of the most attractive for both home and international students, ensuring demand for our beds remains high. The transaction provides the investment capacity for our highly accretive development pipeline and target acquisitions that enhance our portfolio and support our earnings growth."