Unite sells €113m of assets to fund for 5.5% yield

UK student housing specialist Unite Group has announced the disposal of two assets for £100 mln (€113 mln) to the £2.3 bn Unite UK student accommodation fund (USAF), representing a net initial yield of 5.5%.

The assets are located in Birmingham and Newcastle and comprise a total of 1,155 beds.

The sales form part of Unite's plan to dispose of £150-200 mln of assets per annum during the next three years following the acquisition of Liberty Living, according to Joe Lister, chief financial officer of the Unite Group. 'These planned disposals will fund our development activity and support our target to reduce LTV to 35% by 2021.'

In addition, USAF - which is 25%-owned by Unite Group - said that it has launched and priced £85 mln of bonds issued under its existing debt funding platform, the 3.921% bond due June 2025.

The new issue is being placed at a premium to par generating total proceeds to USAF of £95 mln, reflecting an implied yield of 1.83%. The proceeds will be used to fund further growth in the fund, the company said in a statement.


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