Disposal of two assets to the Unite UK Student Accommodation Fund – 30 September 2016

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.”