9th Feb 2007 07:01
Unite Group PLC09 February 2007 9 February 2007 The UNITE Group plc UNITE SECURES £114.5 MILLION STUDENT ACCOMMODATION PORTFOLIO The UNITE Group plc, the UK's leading student hospitality company, todayannounces the securing of a £114.5 million portfolio of student accommodationfrom Base Limited, a student accommodation operator, which adds further strengthin a number of the Group's key markets. The transaction comprises theacquisition of a portfolio of five operational student accommodation propertiesfor a total cash consideration of £76.4 million, as well as the exchange ofcontracts on an option to buy the shares of a company controlled by BaseLimited, which is developing student accommodation in Manchester for a totalfuture cash consideration of £38.1 million. Details of the transaction are as follows: • UNITE has exchanged unconditionally on the acquisition of fiveproperties for £76.4 million, four of which will be acquired through units inIsle of Man Unit Trusts. Completion is scheduled for 28 February 2007 and atleast 75% of the consideration will be funded through the arrangement ofadditional debt facilities. The completed portfolio has a total of 1,502 bedspaces over 5 properties in Liverpool, Leicester and Sheffield and currentlygenerates an estimated net annual income of £3.7 million. The properties areall currently over 98% occupied and UNITE will manage them on an ongoing basis.Three of the assets are located adjacent to existing UNITE properties and theGroup plans to operate these as enlarged schemes. Taking synergy benefits intoaccount the Group considers rental growth prospects across the acquiredportfolio to be strong. • UNITE has also exchanged contracts on an option to buy the shares ofa company controlled by Base Ltd, which is developing a 717 bed property inManchester. UNITE will pay a nominal fee of £170,000 on exchanging the option,which needs to be exercised by 31 July 2007. On exercising the option, UNITEwill pay a cash deposit of £1.9 million and on completion of the transaction, atpractical completion of the development scheduled in 2008, UNITE will pay theremaining £36.0 million cash consideration. UNITE anticipates that the net rentfrom this property for the 2008/09 academic year will be approximately £2.2million and plans to fund the future acquisition through a combination ofretained equity and bank finance. The new development is located immediatelyadjacent to an existing 671 bedroom UNITE property and, if acquired, would offercompelling synergetic benefits. Reflecting the complementary nature of the acquired portfolio to existing UNITEowned properties all of the assets will be owned and operated by UNITE outright.They will not be acquired by the recently launched UNITE UK StudentAccommodation Fund. Mark Allan, Chief Executive of UNITE, commented: "We are very excited about the acquisition of these properties, which arecomplementary to our existing portfolio and offer a number of opportunities interms of marriage value. We anticipate managing these assets long-term and planto align the funding of the properties with the adjacent sites over time. Thiswill enable UNITE to leverage synergies and increase its presence in key studentmarkets. In particular, the visibility of the Manchester site, adjacent toMancunian Way, and the opportunities in the Liverpool portfolio will give UNITEa clear long-term strategic advantage." ENDS Enquiries: The UNITE Group plcMark Allan / Tabitha Aldrich-Smith Tel: 0117 302 7000 Financial DynamicsStephanie Highett / Dido Laurimore Tel: 020 7831 3113 Notes to Editors: UNITE is the UK's leading student hospitality company. Listed in the FTSE 250index of the London Stock Exchange, and with a property portfolio undermanagement valued at some £1.4 billion located across the United Kingdom, theGroup focuses on the provision and management of high quality, well-locatedstudent accommodation and hospitality services in strong higher educationmarkets. UNITE delivers the real student experience, whilst at the same time helping toregenerate cities as part of the community and contributing to the improvementof the country's housing. It undertakes the planning, development andmanagement of sites, often working closely with the universities and colleges,to deliver accommodation for students across all ages and nationalities. UNITEdevelopments typically show high occupancy levels and robust rental growth asdemand continues to rise for places in UK Higher Education and for safe, highquality accommodation for students. Further information on UNITE is available at www.unite-group.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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