Unite Students (UTG) has sold six properties to PGIM Real Estate for £184m (UTG share: £76m), as it continues to focus on student accommodation close to highly ranked universities.
The properties, comprising 2,948 beds, are located in Birmingham, Cardiff, Leicester, Liverpool, Nottingham and Sheffield and have an average age of 18 years. 53% of UTG’s beds are let on short-term nomination agreements with the universities, on an average 5.8 years remaining term.
The company said that the disposal is part of its portfolio management strategy to increase alignment to high and mid-ranked universities which have the strongest outlook for student demand and support sustainable rental growth.
The disposals were priced in line with book value, reflecting a net operating income (NOI) yield of 6.2%. Proceeds will be recycled into asset management activity and used to meet redemption requests in its USAF fund. The properties were held for sale at December 2023 and the disposal was incorporated into the company’s guidance for adjusted earnings of 45.5p-46.5p in the 2024 financial year, which remains unchanged.
Joe Lister, chief executive, commented: “These disposals continue our disciplined approach of recycling capital for reinvestment and further increases our alignment to the strongest universities. The growth outlook for purpose-built student accommodation remains compelling and we are tracking a number of new investment opportunities at attractive returns.”