20th May 2019 08:57
LONDON (Alliance News) - Unite Group PLC on Monday said the Unite UK Student Accommodation Fund has raised GBP250 million of new equity from external investors, and Unite Group has agreed to sell three assets to the fund.
Student accommodation manager and developer Unite Group is not participating in the equity raise and its stake in USAF will fall to 23% from 25% once the equity is fully drawn. Unite said its decision not to join in the fundraise is based on a need to "retain funding capacity for its secured development and partnerships pipeline and future investment opportunities".
In addition, Unite Group has agreed to sell three assets to USAF for GBP111 million in total, of which Unite Group's share is GBP83 million. This represents a 5.5% initial yield. The assets are located in Portsmouth and Leeds.
Once the asset acquisition is complete, USAF will have further investment capacity of GBP250 million to GBP300 million. The fund has more investment assets under offer from third parties that it is looking to acquire in the next few months.
Unite Group Chief Financial Officer Joe Lister said: "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."
Shares in Unite Group were up 0.3% at 970.50 pence on Monday morning.
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