USAF £250m equity raise and £111m acquisition – 20 May 2019
The Unite Group plc, the UK’s leading manager and developer of student accommodation, announces the Unite UK Student Accommodation Fund (‘USAF’) has successfully raised £250 million of new equity from external investors. The proceeds represent 17% of USAF’s NAV as of March 2019.
Unite has agreed to sell three assets to USAF for a total consideration of £111 million (Unite share £83 million), representing a net initial yield of 5.5%. The assets are located in Portsmouth and Leeds and total 1,223 beds. On a pro forma basis Unite Group’s LTV falls to 25%.
Unite is not participating in this equity raise in order to retain funding capacity for its secured development and partnerships pipeline and future investment opportunities. Unite’s stake in USAF will reduce from 25% to 23% when the equity is fully drawn. These sales form part of planned disposals of £100-150 million (Unite share) during 2019.
Following the acquisition, USAF has significant further investment capacity of £250-300 million and has a number of further investment assets that are currently under offer from third parties that it expects to acquire over the coming few months.
Joe Lister, Unite Students Chief Financial Officer, commented:
“Demand for high quality investment opportunities in the purpose built student accommodation sector remains strong with the full allocation of new equity being taken up by investors. The confidence shown in both the fund’s ability to deliver consistent returns and Unite’s ability to drive value from its operating platform has allowed USAF to raise £250 million. The equity raised will allow USAF to continue to improve the quality of the portfolio by continuing to invest in the strongest markets.”
For further information, please contact:
Joe Lister, Chief Financial Officer
Tel: +44 117 302 7005
Candice Macdonald, Head of Communications
Tel: +44 7525 592521
Tel: +44 20 7250 1446