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Valuation of the UNITE UK student accommodation fund as at 31 December 2013 delivering 12.6% total return – 09 January 2014

The UNITE Group plc, the UK’s leading developer and manager of student accommodation, today reports the Estimated Net Asset Value* (“NAV”) of the UNITE UK Student Accommodation Fund (the “Fund”, “USAF”).

The NAV as at 31 December 2013 was £727.2 million, reflecting an increase of 2.0% during the fourth quarter (30 September 2013: £713.3 million), and an uplift of 6.8% over the 12 months to 31 December 2013 (31 December 2012: £678.5 million). The total return for the year including the payment of income distributions was 12.6%.
The principal components of the movement in NAV were as follows:

Effect on NAV:

Q4 2013

2013

Movement in property values 1.8% 4.3%
Movement in swap values 0.1% 1.9%
Partial Landsbanki recovery 0.2%
Other factors 0.1% 0.4%
Increase in NAV 2.0% 6.8%
Increase in underlying gross property 1.1% 3.2%
portfolio value on a like for like basis
In arriving at the value of the Fund, USAF’s property portfolio comprising 21,673 beds in 59 properties across 19 UK towns and cities, was independently valued at £1,355 million.
The value of the property portfolio increased by 1.1% in the fourth quarter, and by 3.2% in the 12 months to 31 December 2013. The increase was driven principally by rental growth of 2.6% over the year and 3bps of yield compression in the final quarter. The portfolio is valued at an average yield of 6.64% at 31 December 2013 (30 September 2013: 6.67%).
Commenting on the Fund’s valuation, Joe Lister, UNITE’s Chief Financial Officer, said: “USAF has delivered another strong performance in 2013 with a total return of 12.6%. The Fund’s consistently strong results, driven by steady rental growth and high occupancy levels and in the current quarter a small compression in average valuation yields, demonstrate the continued attractiveness of USAF and the UK student accommodation sector to investors.”
“In December the Government announced the removal of the student number cap from 2015, which is expected to lead to an increase in enrolments of up to 12%. USAF’s portfolio is very well positioned to benefit from this expected increase in demand and, together with its low average cost of debt following extensive refinancing, the Fund is well placed to continue to outperform in the coming years.”

ENDS

For further information, please contact:

The UNITE Group plc 

Tel: 0117 302 7004

Joe Lister, Chief Financial Officer
Sally Quigg, Head of Corporate Communications Tel: 0117 302 7070

Bell Pottinger

Tel: 020 7861 3925

Victoria Geoghegan
Nick Lambert
Elizabeth Snow

About The UNITE Group  

UNITE is the UK’s leading developer and manager of student accommodation, with a business model that focuses on two core areas:
1.  Development and Asset Management: UNITE undertakes the acquisition, planning and development of purpose-built student accommodation in the UK. Through the continuous assessment of quality and location of its investment portfolio, UNITE is well positioned to deliver value-adding strategies to those assets where further opportunities are identified. Working on behalf of its partners, UNITE acts as Fund Manager for the UNITE UK Student Accommodation Fund in which it owns a 16.3% share. UNITE also manages a number of Joint Venture partnerships.
2.  Professional property management: UNITE is home to 42,000 students in over 120 properties across 23 of the UK’s strongest university cities, and has consistently proven high occupancy levels across its portfolio.
UNITE works closely with higher education institutions in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets. In May 2013 UNITE was awarded Student Accommodation Provider of the Year at Property Week’s RESI Awards. UNITE has also been recognised by the Global Real Estate Sustainability Benchmark (GRESB) as a European sector leader for sustainability.
Founded in 1991, UNITE is a FTSE 250 company listed on the London Stock Exchange (UTG). For more information, please visit www.unitegroup.com  or www.unite-students.com.