Unite Seeks REIT Approval

Posted by Richard Ward in

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Unite Group is seeking approval for various amendments to the Company's Articles of Association in regards to its proposed conversion to a Real Estate Investment Trust (REIT), with effect from 1 January 2017.

As a result, the company has given notice of a General Meeting, which is to be held on Wednesday 30 November 2016.

The company's latest trading update for the period ending 7 November 2016 shows that its portfolio is currently 98% utilised for the 2016/17 academic year with average rental growth for the full year of 3.8%. Due to the high occupancy and rental growth, Unite is expecting to deliver an EPS yield of around 4.5% in 2016.

In particular, Unite noted that growth in student numbers was strongest at the upper (+3%) and mid-tariff Universities (+1%), which is where the majority of their portfolio is concentrated. In comparison, lower tariff Universities reported a slight reduction in numbers.

Looking forward the student property specialist reported that 1,500 students have already re-booked for the next year, while 17,000 university nominated beds have taken occupancy levels to 37%. This compares to a utilisation of 35% at the same point last year.

The strong start to the year has supported Unite's view of 3.0-3.5% rental growth for the 2017/18 academic year.

Unite currently hold a development pipeline of over 5,500 beds and remain confident it will secure planning consents on its remaining 2018 and 2019 pipeline. The company said: "The development market in our target regional locations remains attractive and we are reviewing a number of schemes in line with our target returns. We are also reviewing a small number of development opportunities in London which are approaching our target returns of 7.0-7.5%."

Unite Group Plc will hold an investor and analyst day on 1 December 2016 and release its preliminary results on 22 February 2017.