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Unite raises £300m in placing

Unite to take 16%-20% hit on income this academic year

Student accommodation specialist Unite has raised £300m in an equity raise.

A total of 34,482,759 new ordinary shares were placed at a price of 870 pence per share, representing a discount of 3.1% to the closing price on 24 June 2020 of 897.5 pence.

Concurrently with the placing, certain directors of the company subscribed for an aggregate of 20,113 new ordinary shares in the capital of the company at the placing price, raising gross proceeds of around £175,000.

In all, the issued shares represent around 9.5% of Unite’s issued ordinary share capital prior to the placing.

The company said it intends to use the proceeds to commit to new schemes under offer and capitalise on new university partnership and development opportunities in key cities to enhance future returns.

The group is currently under offer to buy three schemes that have a total development cost of around £250m.

Due to pressures put on universities by covid-19, some are under financial and operational constraints, which Unite says will present new university partnership opportunities.

The group also announced a trading update. It said reservations for the 2020/21 academic year, starting in September, was at 80% (2019/20: 88%) of which half are underpinned by contracted nomination agreements. It said 97% of universities plan to provide in-person teaching in the Autumn term of 2020/21.

Dividend payments are expected to be reinstated following the start of the 2020/21 academic year, it added.

A total of 94% of rent had been collected under nomination or lease agreements for the summer term of 2019/20. It said it anticipates a 15% reduction in income for the 2019/20 year after forgoing rents for students that did not return for the summer term.

Its guidance for EPRA earnings per share for full year 2020 is 22p to 25p, reflecting the impact of lower rents and its 90% target occupancy for 2020/21.

UTG : Unite raises £300m in placing

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