UNITE announces sale of Oasis Capital joint venture assets – 07 April 2014
UNITE, the UK’s leading developer and manager of student accommodation, announces that its Oasis Capital (OCB) joint venture has exchanged unconditional contracts to sell its three assets in line with stated strategy. The agreed sale price, at £174 million, is both supportive of existing book value and in line with expectations. Completion is scheduled within the next two months and UNITE will have no operational involvement beyond this point.
The five year OCB joint venture was formed in 2009 to develop and manage three London properties. The three developments within the portfolio, Woodland Court, Wedgwood Court and Great Suffolk Street total 1,129 beds, and UNITE holds a 25% stake.
The joint venture will use the proceeds to repay outstanding debt and the net proceeds will be distributed to UNITE and the other joint venture partner. UNITE intends to recycle its share of the net proceeds of £18 million into its London-focused UNITE Capital Cities (UCC) joint venture with GIC, in order to increase its share to a 50:50 holding. This equalisation is a pre-condition to the merger of UCC and LSAV (London Student Accommodation Vehicle), a development joint venture with GIC, to form a single investment vehicle.
The sale of the OCB joint venture assets and the subsequent merger of the Group’s two GIC joint ventures will deliver UNITE’s plan to simplify its co-investment vehicles by reducing the number from four to two.
Richard Simpson, Managing Director of Property for UNITE, said:
“The strength and depth of interest in this portfolio demonstrates the continued growth in appetite from the investment market for good quality purpose built student accommodation.
“Our OCB joint venture was nearing maturity and this transaction is a very logical time for the Group to seek an exit. The proceeds will be used to equalise our share in UCC to maintain our current exposure to the London market and support of our longer term strategy to simplify our investment vehicles.”