Unite says UK Student Accommodation Fund NAV up 8% over 2007

UK student accommodation provider, the Unite Group, has said that the estimated net asset value of its UK Student Accommodation Fund rose to £1.020 ( EUR 1.36) at 31 December 2007. Compared to the value at 31 December 2006 of £0.945 (EUR 1.26) per unit, this represents an increase of 8% for the full year. The fund, which is invested solely in direct let student accommodation, was launched on 15 December 2006 and Unite acts as its manager and retains a co-investment stake.

The fund's property portfolio was independently valued at £834.5 mln (EUR 1.1 mln), representing an increase of 4.4% for the full year. The valuation of the fund's underlying portfolio, however, declined by 2.1% during the fourth quarter and this resulted in a 4.8% decline in the value of the fund's units from their 30 September 2007 valuation of £1.072 (EUR 1.43).

According to the announcement, key factors in the fund's valuation were: a yield expansion of 18 basis points in the fourth quarter; costs relating to the acquisition of a £220.3 mln portfolio of assets from Unite as announced to shareholders on 13 December 2007; negative movements in the market value of interest rate swaps held by the fund; and an allowance for performance fees payable to Unite.

Unite established the £1 bn UK Student Accommodation Fund at the end of 2006, and sold an initial portfolio to it for £515 mln.