Unite Acquires Paddington Site in London

Unite has announced the acquisition of an 800-bed development site in Paddington, London on a subject to planning basis.

The student specialist has exchanged contracts to acquire the site from Travis Perkins pls, with total development costs estimated at c.£150 million. The project will be funded from proceeds from a recent equity raise, with the company committed to only limited development costs at this stage, and with the optionality over a development start date.

The scheme is being earmarked for a 2023-24 delivery and will deliver a development yield in line with the company's targets for central London. Unite is already discussing possible partnerships with universities to help support the scheme through planning.

The company has also provided an update on the 2020-21 season, stating that 88% of beds across the portfolio are now let (2019: 98%). Rental arrears are reportedly in line with previous years, whilst check-in occupancy is at 80%, reflecting those students due to occupy the building in January.

Rental income for 2020-21 is expected to be down 20% compared to 2019-20, excluding the impact of cancellations in 2019-20 due to Covid-19.

Commenting on the release, Richard Smith, Chief Executive of Unite Students, said: "Our latest land acquisition means we have now secured c.£175 million of new development opportunities since our recent placing. This is a rare opportunity to acquire a zone 1 central London site in an excellent location, which will help to meet the growing accommodation needs of our London-based University partners. We remain confident in the growth outlook for London over the next decade, reflecting the global reputation of its Universities and a positive outlook for growth in UK and international student numbers."

"We have continued to welcome students to our properties over the past month, reflecting the value they place on the learning, socialising and independence that University provides. We know from our recent student survey that the majority of students are committed to continuing their studies and returning to their current student accommodation in the New Year and we look forward to welcoming them back in January. For those students that want to stay over the Christmas period, we will be fully operational. We will continue doing all we can to help keep students and our staff safe throughout this challenging period."