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Unite Snaps up Durham Student Accommodation

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

Unite students has announced that its fund, USAF, has snapped up a student accommodation development in Durham.

Currently under construction, the forward funded asset is due to open in September 2018 and consists of 363 beds.

USAF is acquiring the asset for £34 million and it is expected to deliver a yield on cost of 6.4% in its first year of operation. Based on current valuations, the asset will be valued at a yield of 5.5%, resulting in a profit on cost of roughly £5 million, with Unite's share representing £1.1m.

The purchase of the asset will be funded with USAF's share of proceeds from recent disposals.

Commenting on the purchase, Richard Simpson, Group Property Director, said: "This latest acquisition further extends our high-quality development programme in a strong regional location where there is strong demand for purpose-built student accommodation. Our strategy remains focused on high quality Universities like Durham, where we see sustainable growth."