Owner, manager and developer of purpose-built student accommodation (PBSA) – Unite Students – announces the disposal of a portfolio of 11 properties for £306m to an affiliate of Lone Star Funds. Unite Student’s share is £236m.
The disposal portfolio totals 4,488 student beds. Assets in the portfolio include 1,700 beds in Sheffield, 703 beds in Reading, 665 beds in Leicester, 517 beds in Bedford, 390 beds in Liverpool, 337 beds in Birmingham, 99 beds in Bristol and 77 beds in Leeds – and has nomination agreements covering 46% of beds on short-term contracts.
The disposals are priced in line with prevailing book value, which reflects an NOI yield of 5.7%. Properties were treated as held for sale in the balance sheet as at 31 December 2021 and the disposal is incorporated into the Company’s guidance for EPRA EPS of 41-43p for the 2022 financial year, which remains unchanged.
Completion of the disposal of four of the properties for £51m (Unite share: £11m) will take place on 15 March 2022. The remaining properties will complete on 31 August 2022. The disposals reduce see-through LTV to 25% on a pro forma basis, providing the Group with capacity to fund its £1bn development pipeline and explore additional growth opportunities.
“We have now completed the disposal programme set out at the time of our acquisition of Liberty Living in 2019. These disposals have increased the focus of our portfolio in the strongest university cities and ensure our ability to sustain rental growth over a longer time horizon. Our balance sheet is also positioned for growth with the investment capacity to deliver our biggest ever secured development pipeline of £1bn and pursue further opportunities to extend our best-in-class platform“Richard Smith, Chief Executive, Unite Students
The disposal is part of the Group’s proactive portfolio management strategy, resulting in increased alignment to high and mid-ranked universities that deliver the greatest quality and value to students. It also sees the Group exit certain smaller, less operationally efficient assets in cities such as Bristol and Leeds.
List of PBSA properties sold
|Polhill Park||Bedford||Wholly owned||517|
|Calthorpe Court||Birmingham||Wholly owned||337|
|Paddington Park House||Liverpool||Wholly owned||390|
|Kendrick Hall||Reading||Wholly owned||604|
|The Forge 2||Sheffield||Wholly owned||224|
|The Forge||Sheffield||Wholly owned||1,157|