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Unite Disposes of Newcastle and Birmingham Assets

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

Unite Group has disposed of two student accommodation assets for £100 million to the Unite UK Student Accommodation Fund (USAF).

Located in Birmingham and Newcastle the sites contain 1,155 beds, whilst Unite's share of £75 million represents a net initial yield of 5.5%.

USAF has also announced the launch and pricing of £85 million of bonds issued under its existing debt funding platform, with the 3.921% bond due June 2025. The new issue is being placed at a premium to par generating total proceeds to USAF of £95 million, reflecting an implied yield of 1.83%.

Money raised from the bonds will go towards further growth in the fund.

Commenting on the transaction, Joe Lister, Chief Financial Officer of Unite Group said: "The disposals by Unite to USAF form part of our plan to dispose of £150-200 million of assets per annum during the next three years following the acquisition of Liberty Living. These planned disposals will fund our development activity and support our target to reduce LTV to 35% by 2021."