Unite announces £342 million disposal
Unite Students, the UK’s leading owner, manager, and developer of student accommodation, today announces the disposal of two London properties to its London Student Accommodation joint venture (‘LSAV’) with GIC for £342 million (Unite share £171 million), in line with book values and reflecting an average net initial yield of 4.0%.
The properties are located in Wembley and Whitechapel and offer 1,358 bed spaces, of which the majority are direct-let to students. The Wembley property, Arch View House, was completed for the 2020/21 academic year under a forward fund contract. The two properties had a gross asset value of £338 million as at 31 December 2020 and are valued based on stabilised net operating income of £14.2 million for the 2020/21 academic year. The disposal to LSAV follows the extension of LSAV to 2032 announced on 4 May 2021.
LSAV will fund the acquisition through £208 million of equity from Unite and GIC and a £140 million 8-year loan facility provided by Barings. Upon completion, the Group’s see-through LTV reduces to 30% on a pro forma basis after also adjusting for the £90 million of disposals announced on 30 March 2021. The net disposal proceeds will initially be used to repay Group debt ahead of reinvestment into the development pipeline and further growth opportunities over time. The transaction will result in a small dilution to 2021 EPRA earnings of 0.4 pence per share. Accordingly, the Group retains its EPRA EPS guidance of 27-30 pence for 2021 …