13th Dec 2007 07:01
Unite Group PLC13 December 2007 Date: 13 December 2007 On behalf of: The UNITE Group plc UNITE ANNOUNCES £242 MILLION SALE OF ASSETS The UNITE Group plc ('UNITE'/ Company), the UK's largest provider of studentaccommodation, today announces that it has successfully concluded the plannedsale of £220.3 million of assets to the UNITE UK Student Accommodation Fund(USAF/ the Fund) and £21.4 million of leased assets to Morley, purchased onbehalf of its Lime Property Fund. These transactions follow the redemption ofthe UNITE Finance One Plc ('UFO') bonds announced in October. Sale of Assets to USAF The assets sold to USAF comprise 4,426 bed spaces and are located in primelocations within the important student markets of Manchester, Liverpool,Sheffield, Bristol, Plymouth and Aberdeen. The majority of these properties arefully let for the 2007-2008 academic year and are expected to generate anaverage net yield of 5.60% over the forthcoming twelve months. The transaction will deliver a £0.3 million profit on disposal over the assets'30 June 2007 valuations and UNITE will also expense further costs of £4.0m,predominantly relating to the amortisation of costs associated with theestablishment of USAF in 2006. Amortisatation of these costs has beenaccelerated in line with the rapid deployment of investor equity into the Fund.Consideration will be in cash, releasing equity capital of £46 million afterrepayment of loans and UNITE's co-investment into USAF. UNITE will reinvestthis capital into its development activities over time. The Fund is financing the acquisition through a combination of debt and equity.Following the acquisition, USAF's loan to value gearing will be 47% and, in linewith its stated strategy, UNITE's co-investment stake in the Fund will reduce toapproximately 20%. Sale of Leased Assets The assets sold comprise 419 bed spaces across four properties in Bath and thesale is in line with UNITE's stated strategy of exiting from certain leasedproperties following the redemption of the UFO bonds. The properties are let tothe University of Bath on leases expiring between 2023 and 2029 on FullRepairing and Insuring terms. The price achieved on the sale of these leasedassets is 7% below the 30 June 2007 valuations and reflects an average net yieldof 5.25%. Mark Allan, Chief Executive of UNITE, commented: "We are delighted to have concluded this planned sale of assets and furtherprogressed the transition of our business model to that of a developer andco-investing asset manager. In a challenging market environment, thesedisposals demonstrate investors' continued appetite for the resilientcharacteristics of student accommodation and provide valuable transactionbenchmarks for the sector." ENDS For further details please contact: Tony Harris Telephone: 020 7902 5054Tabitha Aldrich-Smith Telephone: 020 7902 5057UNITE Group plc Email: [email protected] Dido Laurimore / Nicole Marino Telephone: 020 7831 3113Financial Dynamics Email: [email protected] /[email protected] About UNITE • UNITE is the UK's leading provider of student accommodation; • UNITE currently operates accommodation for 38,000 students in 135 properties, geographically spread in key university markets across England, Wales and Scotland • The value of UNITE's completed property portfolio is estimated to be worth £2 billion. • UNITE has a dedicated website for students who are looking to find accommodation at www.unite-students.com • UNITE is a founding member of the ANUK Code of Standards for Larger Developments, all properties are signed up to this code ensuring high standards of accommodation, service and security. UNITE UK Student Accommodation Fund At the end of 2006, UNITE established the £1billion UNITE UK StudentAccommodation Fund and sold an initial portfolio to it for £515 million. Theprincipal objectives of this transaction were: • to release capital that was tied up in mature, stabilised investment assets for investment into higher added value development activity; • to provide UNITE with more growth capital in the medium term; and • to diversify UNITE's sources of income by providing a new, valuable revenue stream arising from management fees from the Fund. The Fund helped transform UNITE's business model to that of developer of newpurpose-built student accommodation and manager of funds which own studentaccommodation properties operated by UNITE and in which the Group has asignificant minority stake. UNITE Student Accommodation, designed for students • Dedicated on-site hospitality management team offering 24/7 support to customers. • A wide choice of rooms available from single studio flats for students who want to live on their own, or, typically 5/6 bedroom flats to share with friends. • Common room facilities, including Sky TV and pool tables, are often used for social events. A number of properties offer gyms exclusively for residents' use. • Rents and availability vary in each town/city and a variety of payment plans are in place to suit students. UNITE focuses on the provision and management of high quality, well-locatedstudent accommodation and hospitality services at affordable prices in stronghigher education markets. UNITE undertakes the planning work, development andmanagement of sites, often working closely with the Universities and Colleges todeliver accommodation for students across all ages and nationalities. UNITEdevelopments typically show high occupancy levels as demand continues to risefor places on UK Higher Education courses and for high-quality, safeaccommodation. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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