Unite Group, the London-listed developer and manager of student accommodation, has announced the completion of the planned sale of assets to the Unite UK Student Accommodation Fund for £143.9 mln (about EUR 169 mln).
Unite Group, the London-listed developer and manager of student accommodation, has announced the completion of the planned sale of assets to the Unite UK Student Accommodation Fund for £143.9 mln (about EUR 169 mln).
The assets sold comprise 1,679 bed spaces across four well located properties in London, Leeds and Bath. The portfolio is 97% let for the 2010/11 academic year.
The consideration for the transaction, based on an independent valuation performed by CBRE, represents a net initial yield of 6.44% and when compared to the open market value, which is used to calculate the group's adjusted net asset value, is 1.8% lower than the valuation undertaken at 30 June 2010.
Unite Group said that this shortfall relates to an asset specific factor and is not indicative of broader movements of valuation across the portfolio. The disposal crystallises £9.3 mln of development profits.
The gross proceeds of £143.9 mln will be used to pay down related debt of £104.5 mln. The remaining £39.4 mln will be used to reduce gearing further in the near term and 'to invest into development as appropriate opportunities emerge'.
Following completion of this transaction, based on current gearing and liquidity targets, the fund is now effectively fully invested.
