Unite Group sells two student accommodation sites for £88.4m

FTSE 250 student accommodation manager Unite Group sold two of its assets to its investment partner Unite UK Student Accommodation Fund (USAF) for a combined £88.4m.

Unite Group retains a 23% stake in USAF, which funded the acquisitions with a £100m five year loan from US bank Wells Fargo.

The company sold Greetham Street in Portsmouth and Gosford Gate in Coventry, which have a combined 1,122 beds and are fully let for the 2016/17 academic year with the towns’ central universities, which generated an income yield of 9.3% for the company.

It also increases sales in the year for Unite Group to over £110m and is part of the company’s strategy to recycle its financial wealth and maintain leverage at its target 30% mid-range level in the market.

The financial, social, and environmental value on the two properties was 5.65%.

Chief executive Joe Lister said: "We are delighted to have sold two assets to USAF, recycling capital from our development programme providing capital to deploy into new development opportunities, while also enhancing USAF's portfolio and returns."

Shares in Unite Group were up 0.4% to 633p at 0807 BST.