UNITE, the UK's leading developer and manager of student accommodation, today announces that it has concluded the sale of four wholly owned properties for a combined total of £116 million (approx. 142 million), in line with latest book values.
Two of the disposals, totaling £39 million (approx. 48 million), have been made to third party purchasers and two have been sold to co-investment vehicles for a combined £77 million (approx. 94.6 million).
Taking into account other disposals made by UNITE and its co-investment vehicles earlier in 2012, a total of £127 million (approx. 156 million) of non-core asset sales have now been completed in the open market, in line with book value, meaning that the Group is on track to achieve its target to reduce leverage to approximately 50% loan-to-value by the end of the year. The £77 million (approx. 94.6 million) of transactions between UNITE and its co-investment vehicles are in addition to this.
Sales to co-investment vehicles
Disposals to co-investment vehicles comprise the sale of North Lodge, Tottenham Hale (528 beds) to the London Student Accommodation Venture ('LSAV'), our 50:50 joint venture with GIC Real Estate, for £46 million and the sale of Kelvin Court, Glasgow (477 beds) to the UNITE UK Student Accommodation Fund ('USAF') for £31 million. The prices achieved represent an average net initial yield of 6.5%.
Sales to third party purchasers
New Carnegie Court, a 520 bed property in Aberdeen, and Camden Road, a 34 bed property in North London, have been acquired by third party purchasers for combined consideration of £39 million.
In the case of New Carnegie Court, UNITE has sold its leasehold interest in the property to PRUPIM for £33 million, representing a net initial yield of 5.5%. The sale has been achieved following extensive work to restructure the underlying ownership and new 25 year lease granted to the University of Aberdeen.
The property on Camden Road has been sold to Elite Property Group for £6 million and is the second asset they have purchased from UNITE this year.
Richard Simpson, Managing Director of Property at UNITE, commented:
"These four transactions secure completion of our targeted disposals of both non-core assets to third party purchasers in 2012 and planned sales to co-investment vehicles, and mean that we are on track to reduce leverage in line with plan.
"The cumulative sales value is in excess of £200 million and is supportive of current valuations demonstrating the continued attractiveness of the purpose built, student accommodation sector to a growing number of UK and international investors."
Source: FTI Consulting