Unite Students has exchanged on the purchase of a 22-bed development in Durham and a 418-bed scheme in Selly Oak, Birmingham on behalf of its Unite Students Accommodation Fund.
The combined cost of the developments is £56m, with Unite’s share at £12.9m. The acquisitions are expected to generate a yield of 6.3% in their first full year of operation.
Unite Students Accommodation Fund has also sold a 128-bed studio scheme in central London for £42m, with Unite’s share at £9.7m, providing the majority of the funding for the acquisitions.
The remainder will be funded by cash. The disposal price reflects a value of £320,000 per bedroom – a yield of 4.25%. Disposals in 2017 now total £180m, on a Unite share basis, against a target of £150m-£200m.
The transactions support Unite’s strategy of concentrating its portfolio alongside high-ranking universities with a structural demand and supply imbalance and focusing on cluster-flat accommodation rather than single-occupancy studios.
Richard Simpson, group property director, said: “We will continue to deploy funds from the disposals made at the start of the year to further improve the quality of the portfolio and to extend our highly accretive development programme in strong regional locations with top-ranked universities like Durham or Birmingham, where we see the most sustainable growth.”
To send feedback, e-mail Shekha.Vyas@egi.co.uk or tweet @shekhaV or @estatesgazette
