Unite Students has sold a portfolio of 11 properties, comprising 4,488 beds, for £306m (Unite share: £236m) to an affiliate of Lone Star Funds.
The disposal portfolio includes assets in Sheffield (1,700 beds), Reading (703 beds), Leicester (665 beds), Bedford (517 beds), Liverpool (390 beds), Birmingham (337 beds), Bristol (99 beds) and Leeds (77 beds), and has nomination agreements covering 46% of beds on short-term contracts.
The disposal is part of the group’s portfolio management strategy to increase alignment to high and mid-ranked universities. The group said that it also allows it to exit certain smaller, less operationally efficient assets in cities such as Bristol and Leeds.
The disposals are priced in line with prevailing book value, which reflects a yield of 5.7%. The properties were treated as held for sale in the balance sheet as at 31 December 2021 and the disposal is incorporated into the company’s guidance for EPRA earnings per share (EPS) of 41-43p for the 2022 financial year, which remains unchanged.
The disposals reduce see-through loan to value (LTV) to 25% on a pro forma basis, which it said provides it with the capacity to fund its £1bn development pipeline and explore additional growth opportunities.
Richard Smith, chief executive, said: “We have now completed the disposal programme set out at the time of our acquisition of Liberty Living in 2019. These disposals have increased the focus of our portfolio in the strongest university cities and ensure our ability to sustain rental growth over a longer time horizon. Our balance sheet is also positioned for growth with the investment capacity to deliver our biggest ever secured development pipeline of £1bn and pursue further opportunities to extend our best-in-class platform“
UTG : Unite sells digs portfolio for £306m