London-listed Unite Group, the largest provider developer and manager of student accommodation in the UK, has expanded its partnership with GIC Real Estate, part of the Government of Singapore Investment Corporation.

London-listed Unite Group, the largest provider developer and manager of student accommodation in the UK, has expanded its partnership with GIC Real Estate, part of the Government of Singapore Investment Corporation.

The pair said in a statement that they are targeting a £1 bn (EUR 1.2 bn) London portfolio. Their current joint venture, Unite Capital Cities, is being extended from March 2013 to September 2022.

About £100 mln of UCC's existing assets, equivalent to around 25% of its total portfolio at end-June 2012, will be sold over the next four years. 'The disposals will be targeted so as to focus UCC's remaining holdings on its highest quality London locations and the majority of proceeds will then be applied to de-leveraging in the JV,' Unite said in a statement.

UCC's existing senior debt facility of £236 mln, provided by a syndicate of lenders headed by HSH Nordbank, matures in September 2014 and will need to be replaced with a new facility. Unite intends to have the replacement facility arranged and in place during 2013.

In addition, Unite and GIC RE have established a separate joint venture, the London Student Accommodation Joint Venture (LSAV), which will seek to invest £330 mln in development activity in London over the coming years. The commitment equates to between 3,500 and 4,000 new bed spaces.

Both Unite and GIC will have a 50% stake and LSAV will have the same maturity date as UCC (September 2022). It will be the primary vehicle through which Unite undertakes development activity in London and will have a right of first refusal over Unite's London development projects until the capital investment commitments are met.

LSAV has contracted to buy, on a forward commitment basis, two of London development projects from Unite for about £129 mln. The assets are the 951-bed Stratford City project and a recently completed 528-bed North Lodge scheme at Tottenham Hale.

Unite and GIC have also agreed a mechanism which could potentially lead to a merger of the UCC and LSAV joint ventures by 2016.

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