Disposal of two assets to the Unite UK Student Accommodation Fund (USAF)

Unite Students, the UK’s leading developer and manager of student accommodation, announces the disposal of Greetham Street, Portsmouth and Gosford Gate, Coventry to USAF for a combined value of £88.4 million. Both properties, comprising 1,122 beds, were completed in 2016 and are fully let for the 2016/17 academic year on nominations agreements to Portsmouth University and Coventry University, generating an income yield on cost of 9.3%.

The disposals increase sales in the year to over £110 million on a see-through basis and support Unite’s strategy to recycle capital and maintain leverage at our target level in the mid-30% range. The blended valuation yield on the disposals was 5.65%, in line with valuation yields at the 30 June valuation date

The acquisition has been funded in USAF with a new £100 million 5-year facility provided by Wells Fargo. The acquisitions further strengthen the quality of USAF’s portfolio and are accretive to returns for USAF investors. Unite retains a stake of 23% in USAF.

Joe Lister, Chief Financial Officer of Unite Students, commented:

“We are delighted to have sold two assets to USAF, recycling capital from our development programme providing capital to deploy into new development opportunities, while also enhancing USAF’s portfolio and returns.”