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Unite Disposes of £295 million Portfolio

Posted by Richard Ward

Image courtesy of Flickr, Creative Commons

Unite Students has disposed of 13 student properties, comprising 4,175 beds, to a Brookfield-managed fund for a total of £295 million.

Unite's share of the portfolio is valued at £102 million and completion of the deal is expected in Q2 2017.

Unite said the disposal is part of the company's strategy to provide the capital needed to fund further growth in its high-quality development pipeline which is focused on mid to high ranked University locations with the most secure long-term growth prospects.

The deal represents the first stage in Unite's plan to recycle around £150-£200 million of assets during 2017 so it can take advantage of the ongoing strength in the investment market for well let student accommodation.

The sold portfolio consists of a combination of wholly owned, USAF and LSAV properties situated in Aberdeen, Birmingham, Bournemouth, Edinburgh, Glasgow, Liverpool and York.

Proceeds of the sale will be used to fund Unite's recent 3,100 bed on-campus acquisition at Aston University and the remainder will be put towards its development activity and investment properties.

The resulting sale will offset any changes in gearing and earnings impact expected from the Aston University acquisition and ensures proforma LTV is at 34% and in-line with the Group's target level.

Commenting on the sale, Richard Smith, Chief Executive of Unite Students, said: "This sale is an important part of our strategy to recycle capital to fund our ongoing investments, focused on the strongest university towns and cities, where we have deep university relationships and where we can provide the best accommodation and services for our students. Our development pipeline supports further earnings growth as we continue to invest in strong student markets."