Valuation of the UNITE UK student accommodation fund as at 30 September 2014 – 08 October 2014
The Unite Group plc, the UK’s leading manager and developer of student accommodation, announces the estimated net asset value* (“NAV”) of the Unite UK Student Accommodation Fund (the “Fund”, “USAF”) as at 30 September 2014.
At the end of the third quarter, NAV was £903.8 million, reflecting an underlying increase in value during the third quarter of 2.1% (5.1% in the nine months to September) together with the impact of £17.8 million of new equity issued during the period.
In arriving at the value of the Fund, USAF’s property portfolio, comprising 24,955 beds in 69 properties across 22 UK towns and cities, was independently valued at £1,561 million. The movement during the quarter represents a like for like increase of 1.7% in the value of the portfolio. In the nine months to 30 September, the value of the portfolio has increased by 3.2% on a like for like basis with rental growth contributing 2.1% of the movement and yield compression 1.1%. The overall portfolio is valued at an average yield of 6.53% at 30 September 2014 representing four basis points of yield compression on a like for like basis during the quarter.
In July, USAF completed the acquisition of a 2,904 bed student accommodation portfolio from the Cordea Savills Student Hall Fund for £137 million, and separately an asset comprising 378 beds in Huddersfield from Unite for £20 million in September. Unite received consideration in the form of £11 million in cash and the remainder in USAF units increasing its stake in the Fund to 21.6% from 20.7%.
The lettings cycle for the 2014/15 academic year is now largely complete and the Fund’s portfolio has achieved high occupancy levels, with 98% of bed spaces let for the academic year.
Commenting on the Fund’s valuation, Joe Lister, Unite Student’s Chief Financial Officer, said:
“USAF has delivered a further robust performance in the third quarter of 2014 and has deployed the capital it raised earlier this year through the acquisition of an additional 3,282 beds which complement and enhance the portfolio. We are delighted to report a strong lettings performance with 98% of the Fund’s portfolio occupied for the 2014/15 academic year.”