Student housing group Unite is ploughing ahead with its development pipeline after delivering a bumper set of first-half results.
The firm announced that it is adding a 951-bed development adjacent to the Olympic Park in Stratford, E20, to its 2014 delivery schedule, which also includes a 563-bed scheme in King’s Cross, N1.
The project is being funded with 65% debt from an existing facility from the Royal Bank of Scotland and 35% equity from the student housing developer and manager.
Unite delivered a 5.3% increase in net asset value to 335p a share, and doubled its recurring profits from £7.2m this time last year to £14.4m in the six months to the end of June.
The NAV hike was driven by rental growth of 1.8% delivering capital growth of £20m, and development profits of £3m. It was partially offset by £5m in interest rate swap breakage costs linked to £290m of debt that was refinanced during the period.
For the half year, rental growth added 12p to NAV, retained profit 7p, development 1p and swap close-outs took off 3p.
Good progress was made on costs with the group’s net operating income margin improving to 74.8% from 71.3% this time last year.
Earnings per share increased by 190% to 9p from 3.1p in June last year.
At the end of the period the company’s net debt was £501m, with adjusted gearing at 92%. Its see-through LTV was stable at 54%, and will fall to 52% when post-reporting date sales are completed.
