The Unite Group PLC – USAF and LSAV quarterly valuation update

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 2015.

At 31 December 2015, USAF’s property portfolio was independently valued at £2,074 million representing a like-for-like increase of 2.3 per cent during the quarter and 13.9 per cent over the full year. The portfolio comprises 26,813 beds in 75 properties across 24 University towns and cities in the UK.

LSAV’s investment portfolio was independently valued at £738 million, up 2.5 per cent on a like-for-like basis in the quarter and 17.4 per cent over the full year. LSAV’s investment portfolio comprises 4,636 beds across 12 properties in London and three properties in Edinburgh.

These increases in valuations have been driven primarily by rental growth and six basis points of yield compression in USAF and 10 basis points of yield compression in LSAV on a like-for-like basis in the quarter (65 and 81 basis points respectively over the full year). The overall USAF portfolio is now valued at an average yield of 5.7 per cent and LSAV’s portfolio at 5.0 per cent.

As a result of the strong total return in USAF during 2015, Unite expects to earn a net performance fee in the region of £20 million. The fee will be paid in units in the first quarter of 2016.

Joe Lister, Unite Students Chief Financial Officer, commented:

“USAF and LSAV have performed well during 2015 with property valuation growth of 14 per cent and 17 per cent respectively. Returns have been delivered through levels of high occupancy, rental growth and have been enhanced by yield compression.

The strong performance in 2015 has resulted in Unite Students receiving a net performance fee in the region of £20 million.”