Unite Students sells six properties to PGIM Real Estate for £184m

Unite Students, a prominent figure in the UK’s purpose-built student accommodation (PBSA) sector, has successfully completed the sale of six properties, encompassing a total of 2,948 beds, to PGIM Real Estate for a substantial sum of £184 million, of which Unite’s share amounts to £76 million. This strategic move reflects the company’s ongoing efforts to streamline its portfolio, targeting institutions with robust student demand projections.

Strategic Disposal Aligns with Market Demand

Located in Birmingham, Cardiff, Leicester, Liverpool, Nottingham, and Sheffield, these properties have an average age of 18 years and were part of a calculated shift in Unite Students‘ asset management strategy. Approximately 31% of these beds are under short-term nomination agreements, a contrast to the company’s usual term agreements, highlighting a flexible approach to meet market needs. The disposal was executed at book value, presenting a net operating income (NOI) yield of 6.2%, indicative of a stable investment climate.

Unite Students announces the strategic sale of six properties to PGIM Real Estate for £184 million, aiming to realign and reinvest in high-demand university locations.

Capital Recycled for Future Growth

The proceeds from this sale are earmarked for reinvestment into asset management initiatives and to fulfill redemption requests in the Unite Students Accommodation Fund (USAF). This strategic reinvestment underscores Unite Students’ commitment to enhancing its offerings and aligning more closely with high and mid-ranked universities, which are expected to see sustained student demand.

Leadership’s Vision for Expansion

Joe Lister, Chief Executive Officer of Unite Students, remarked on the sale: “These disposals continue our disciplined approach of recycling capital for reinvestment and further increases our alignment to the strongest universities. The growth outlook for purpose-built student accommodation remains compelling and we are tracking a number of new investment opportunities at attractive returns.” His statement emphasizes the company’s proactive stance on capitalizing on new growth avenues within the sector.

Property Breakdown

The sold properties varied in size and location, offering a wide range of options for student accommodations across several major university cities in the UK.

Future Prospects

This deal is expected to have no immediate impact on the company’s financial guidance for the 2024 financial year, maintaining the adjusted earnings forecast of 45.5-46.5 pence per share. Unite Students continues to play a pivotal role in providing high-quality housing to a large demographic of over 70,000 students, partnering with more than 60 universities across the UK.