Quarterly valuation update for the Unite UK student accomodation fund and the London student accommodation joint venture

The Unite Group plc, the UK’s leading developer and manager of student accommodation, announces the quarterly property valuation of the Unite UK Student Accommodation Fund (‘USAF’) and the London Student Accommodation Joint Venture (‘LSAV’) as at 31 December 2014. The LSAV valuation incorporates the combined UCC and LSAV portfolios following the merger of the two joint ventures in 2014 and will be reported quarterly going forward.

At 31 December 2014, USAF’s property portfolio was independently valued at £1,573 million representing an increase of 1.2% during the quarter. The portfolio now comprises 24,820 beds in 68 properties across 22 university towns and cities. LSAV’s property portfolio was independently valued at £426 million, up 1.4% in the quarter, and comprises 2,968 beds in 11 properties across London and three properties in Edinburgh.

The USAF property portfolio has increased in value by 3.9% and the LSAV portfolio by 4.6% over the year on a like-for-like basis, with rental growth contributing approximately three-quarters of the movement and modest yield compression making up the remainder.

The USAF portfolio is now valued at an average yield of 6.5% and the LSAV portfolio at an average of 5.9%.

Commenting on the valuations, Joe Lister, Unite Students Chief Financial Officer, said:

“The USAF and LSAV portfolios have both performed well in 2014, with a further year of strong occupancy and rental growth supplemented by modest yield compression. Based on indicative pricing of pending transactions in the market we expect yields to compress meaningfully from December 2014 levels during 2015 as those transactions complete.”