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UK Student Housing Group Unite Sells Two Assets to USAF.


30 September 2016 - UK-based student accommodation developer and manager Unite Students Group plc (LON: UTG) has sold Greetham Street, Portsmouth and Gosford Gate, Coventry to real estate fund USAF for a combined value of GBP 88.4m (USD 114.74m), the company said.

Both properties, comprising 1,122 beds, were completed in 2016 and are fully let for the 2016/17 academic year on nominations agreements to Portsmouth University and Coventry University, generating an income yield on cost of 9.3%.

The disposals increase sales in the year to over GBP 110m on a see-through basis and support Unite's strategy to recycle capital and maintain leverage at our target level in the mid-30% range.

Unite Students said that the blended valuation yield on the disposals was 5.65%, in line with valuation yields at the 30 June valuation date.

The acquisition has been funded in USAF with a new GBP 100m five-year facility provided by Wells Fargo. The acquisitions further strengthen the quality of USAF's portfolio and are accretive to returns for USAF investors. Unite retains a stake of 23% in USAF.

Unite Students is the UK's largest and most established manager and developer of purpose-built student accommodation.

It provides a home for around 50,000 students, in more than 140 properties, across 28 leading university cities in England and Scotland. Unite works in partnership with more than 60 Higher Education institutions and also lets rooms directly to students.

Established in December 2006, USAF has raised equity capital totalling over GBP 950m from UK and European institutional property investors on a periodic basis to raise funds for acquisitions and to manage leverage.

USAF has over 100 investors. Unite is the largest investor with a current co-investment stake of approximately 22%. Unite also acts as manager of USAF and operates its properties.

Country: UK

Sector: Construction/Real Estate

Target: Greetham Street, Portsmouth and Gosford Gate, Coventry

Buyer: USAF

Vendor: Unite Students Group

Deal size in USD: 114.74m

Type: Divestment

Financing: Cash

Status: Closed

Buyer advisor: , ,


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Publication:M & A Navigator
Geographic Code:4EUUK
Date:Sep 30, 2016
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