UNITE continues regional development programme with acquistion of prime Edinburgh site
The UNITE Group plc, the UK’s leading developer and manager of student accommodation, today announces the acquisition of a 1.8 acre development site on St Leonard’s Street in central Edinburgh, subject to planning and funding agreements. The property will have a total development cost of around £38 million and is expected to deliver returns in line with UNITE’s targets for regional development. It is anticipated that this wholly owned scheme will be completed in time for the 2016/17academic year.
The site is in a prime location, just a few minutes’ walk to the University of Edinburgh. It is currently occupied by an 8,000 square foot retail unit which will be refurbished within the plans. The property design will be in keeping with surrounding buildings.
This is the third project to be funded from the proceeds of the Group’s June 2013 share placing following the acquisition of sites in Newcastle and Aberdeen earlier in 2014. Together, these three developments account for approximately 70% of the capital raised. Additionally, UNITE is in exclusive negotiations to acquire a further site in a similarly strong regional location. When contractually secure, this further project will account for the remainder of the June 2013 share placing proceeds and is also supportive of the Group’s target returns.
As reported in June 2013 at the time of the share placing, UNITE expects shareholders to benefit from NAV accretion from 2014 onwards as capital is deployed into regional developments and from earnings per share accretion from 2015 onwards as projects are completed and let, thereby supporting the Company’s key strategic objective of increasing recurring earnings.
Richard Simpson, Managing Director of Property for UNITE said:
“We are delighted to announce the acquisition of this new site in the Scottish capital, presenting a rare chance to develop student accommodation in a prime central location.
“There are 41,000 full time students seeking accommodation in Edinburgh with only 12,500 corporate and university bed spaces available. This structural shortage and the strong central location of this site mean the property is well located for University of Edinburgh students and will also appeal to students from other Edinburgh institutions such as Napier University, Herriot Watt University and Queen Margaret University. This development will add to our existing portfolio of five properties in Edinburgh, where we currently provide a home for 717 students.”
The scheme, which is subject to planning, is anticipated to be made up of shared flats with communal living and kitchen spaces, and self-contained studios, over five storeys. The development will be built to UNITE’s new specification room design, which provides a modern, high quality look and feel, at a very competitive price point and will include common areas, Wi-Fi throughout the building, and environmental features such as LED lighting designed to enhance students’ living and learning experience.”