Unite Students is on the lookout for new buys for its £814m joint venture with GIC, it said this morning, as it announced that the two would extend the partnership for another decade.
The university housing developer is to continue the London Student Accommodation Joint Venture until September 2032, extending the original term, which ran from 2012 until next year.
Both parties will keep a 50% stake in the venture, with Unite paying out the remaining £20m-30m share of its performance fee in the final quarter of this year. The company had already included £9.2m of the fee in its results for the year ending 31 December 2021.
“As part of the extended relationship, Unite and GIC will explore opportunities to expand LSAV, through potential acquisitions of investment assets,” it said.
Unite will be entitled to a performance fee equivalent to 12.5% of returns from LSAV in excess of 8% a year until 2032. Its Aston Student Village will be merged with the jv to simplify its funding structure, it added.
Unite Students CEO Richard Smith said: “The transaction provides a strong endorsement of our sector-leading operating platform from GIC, a high-calibre investment partner with whom Unite has enjoyed a successful relationship since 2005.
“The realisation of the LSAV performance fee in 2021 reflects a combination of strong development returns and rental growth by LSAV’s London portfolio since 2012.”
Unite, whose share equates to £407m, will continue acting as the jv’s asset manager until the end of the 10-year term.
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