Unite Group Sells Nine Properties for £212 Million
Why we think this is good
The disposal of nine properties for £212 million is a positive development for Unite Group. The pricing of the transaction, at a 1% discount to book value and a 6.4% Net Operating Income yield, appears to be fair. The proceeds will be recycled into the company's strongest markets and new investment opportunities, which is a prudent use of capital. Additionally, the disposal is expected to be earnings accretive. While the transaction is not transformational, it aligns with the company's strategy to increase its focus on high and mid-ranked universities with the strongest prospects for sustainable long-term rental growth.
Key Points
- Disposal of nine student accommodation properties for £212 million
- Pricing at 1% discount to December 2024 book value, 6.4% Net Operating Income yield
- Proceeds to be reinvested in the company's strongest markets and new investment opportunities
- Disposal aligns with strategy to focus on high and mid-ranked universities
Summary
Unite Group PLC has announced the disposal of a portfolio of nine student accommodation properties for £212 million (Unite share: £140 million) to an affiliate of Lone Star Funds. The disposal is part of the Group's strategy to increase alignment to high and mid-ranked universities and properties with the strongest prospects for sustainable long-term rental growth. The transaction is priced at a c.1% discount to December 2024 book value and reflects a Net Operating Income yield of 6.4% based on 2025/26 income. Proceeds will be recycled into investment activity in the company's strongest markets, including a recently announced university partnership with Manchester Metropolitan University.