Student housing provider Unite Group has raised £300m in a placing.
A total of 32,693,930 new ordinary shares were placed with institutional investors at a price of 905p, raising £296m. Retail investors subscribed via the PrimaryBid platform for a total of 441,989 new ordinary shares, raising £4m.
The issue price of 905p represents a discount of 4.2% to the middle market closing price on 24 July 2023 of 945p.
The proceeds will be used to develop two new purpose built student accommodation (PBSA) schemes and accelerate asset management initiatives to enhance future returns.
The development schemes are in Bristol and London with a total of 1,566 beds, and have a total development cost of £277m. The blended forecast yield on cost is 6.7%, with the schemes expected to complete in 2025 and 2027.
A further £50m has been earmarked for asset management initiatives on its existing portfolio to refurbish and upgrade accommodation for delivery in 2024 and 2025 at yields on cost of over 8%.
UTG : Unite Group raises £300m in placing