Student accommodation group disposes of six properties for £184m

Student accommodation provider, The Unite Group, is disposing of six of its UK properties, for a combined total of £184m.

It said some of the proceeds would be used to to acquire new investment opportunities.

The Bristol-based group is selling sites in Birmingham, Cardiff, Leicester, Liverpool, Nottingham and Sheffield to the global PGIM Real Estate business.

Unite will receive £76m from the overall proceeds, with the rest attributable to Unite Students Accommodation Fund (USAF).

The properties comprise 2,948 beds and have an average age of 18 years (Unite average: 13 years).

Thirty one per cent of beds are let on short-term nomination agreements (Unite: 53%, 5.8 years average remaining term).

The disposal is part of the group’s 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 are priced in line with book value, reflecting an NOI (net operating income) yield of 6.2%.

Proceeds will be recycled into asset management activity and used to meet redemption requests in USAF.

The properties were held for sale at December 2023 and the disposal was incorporated into the company’s guidance for adjusted earnings of 45.5-46.5p in the 2024 financial year, which remains unchanged.

Unite Students CEO, Joe Lister, said: “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.”

The six properties are: Jennings Court in Birmingham (596 beds); North Court, Cardiff (253 beds); The Grange, in Leicester (219 beds); Prospect Point in Liverpool, which is wholly owned by Unite Group (635 beds); St Peter’s Court, Nottingham (808 beds); and Exchange Works, in Sheffield (437 beds).