Unite Group accelerates portfolio streamlining

UK PBSA provider Unite Group is on track to sell off £300-400 mln (€351-468 mln) of assets this year to improve its portfolio quality and focus on stronger university partnerships.

Unite Students

They have already completed or are close to completing £130 mln (€152 mln) in sales, including St Pancras Way, and are actively marketing another £500 mln (€585 mln). This includes selling a portfolio of about 7,000 beds in less strategic locations, which has attracted strong investor interest due to affordable rents and good value. To speed up this process, they've hired Goldman Sachs to explore options for accelerating disposals and repositioning the company.

Their Hawthorne House project in Stratford, London, with 719 beds, is nearing completion and expected to open in June. They are working with the Building Safety Regulator to get approval for occupation by September. Demand for these new beds is strong, with half already secured by the University of the Arts London.

The Unite UK Student Accommodation Fund (USAF) portfolio was valued at £2.79 bn (€3.27 bn), a 1.7% decrease this quarter, with a weighted average yield of 5.4%. It includes 22,361 beds in 56 properties.

The London Student Accommodation Joint Venture (LSAV) portfolio was valued at £2.03 bn (€2.38 bn), a 2.4% decrease this quarter, with a weighted average yield of 4.8%. It comprises 9,710 beds across 14 properties.

Unite Group currently houses 72,000 students across 208 properties in 29 university towns and cities, partnering with over 60 universities.

Joe Lister, Unite Group CEO, commented: "Our strategy is focused on increasing our alignment with the UK's leading universities, where we see the strongest prospects for housing demand and future rental growth. To achieve this, we have already increased our disposal programme and the Board is exploring options to further accelerate our transition to a more focused, higher-quality portfolio, which would release surplus capital for reinvestment into share buybacks or University Partnerships consistent with our capital allocation framework."