Unite: Valuation of the Unite UK Student Accommodation Fund (UK)

The UNITE Group plc, the UK's leading developer and manager of student accommodation, today reports the Estimated Net Asset Value* (‘NAV’) of the UNITE UK Student Accommodation Fund as at 30 June 2013. The NAV as at 30 June was £705.7 mln (approx. €820 million) (£0.944 per unit), reflecting an increase of 2.6% per unit during the second quarter of 2013 (31 March 2013: £685.3 mlm, £0.920 per unit).

In arriving at the value of the Fund, its property portfolio, which comprises 21,673 beds in 59 properties across 19 UK towns and cities, was independently valued at £1,327 mln. The movement during the quarter represents a like-for-like increase of 0.8% (1.0% in the six months to 30 June) in the underlying value of the property portfolio, driven by quarterly rental growth. Valuation yields remained stable at an average of 6.68% (31 March 2013: 6.68%). As in previous years, further rental growth is expected to be achieved as reservations for the forthcoming 2013/14 academic year progress.

Reservations across USAF’s properties for the academic year starting in September 2013 stand at 73% compared to 71% at the same point in 2012. USAF recently completed a 10 year £405m refinancing to replace two loan facilities that were due to expire within the next twelve months. The new finance reduces the average annual interest cost from 4.9% to 3.9% and enhances the Fund’s distribution yield.

Commenting on the Fund’s valuation, Joe Lister, UNITE’s Chief Financial Officer, said: “During the quarter, the portfolio has delivered continued rental growth, with further uplifts anticipated as the 2013/14 academic year lettings cycle completes. Lettings for the forthcoming academic year are progressing well with 73% of the portfolio reserved compared to 71% at the same time in 2012. “We are delighted with the outcome of the new financing, which both extends the maturity profile of USAF’s debt and reduces the average cost of finance. This will flow through to an enhanced distribution yield for investors in the Fund.”

Source: Unite Group

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