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Unite and GIC Extend Joint Venture

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

Unite has announced the extension of its London Student Accommodation (LSAV) joint venture with GIC by ten years to September 2032. Both companies will retain a 50% equity stake, with the JV's net assets valued at £814 million at the end of last year.

The two companies also announced an agreement to settles its performance fee in cash during Q4-2021, which is expected to be approximately £30-40 million. Around £9.2 million was already recognised in Unite's balance sheet, with the remaining share of £20-30 million to be recognised in 2021.

Looking ahead, Unite will be entitled to receive a performance fee from LSAV equal to 12.5% of returns in excess of 8% per annum in the period from 2021 to 2032.

The two businesses decided to extend the JV following a successful partnership that has delivered strong development returns and growth in rental income.

The Aston Student Village JV with GIC will also be merged with LSAV helping to simplify the group's funding structure, with Unite continuing to act as property and asset manager. As part of the extended relationship, Unite and GIC will explore opportunities to expand LSAV through acquisitions of investment assets.