Unite Group’s UK student accommodation fund has raised £250m of new equity from external investors.
The proceeds represent 17% of Unite Student Accommodation Fund’s net asset value as of March 2019.
Unite will also sell three assets to the fund for £111m, at a net initial yield of 5.5%. These are located in Portsmouth and Leeds.
Unite said it was not participating in the raising in order to retain funding capacity for its pipeline or potential investments. Its stake in USAF will reduce to 23% from 25% when the equity is fully drawn.
The sales form part of planned disposals of £100m-£150m during 2019. The group’s loan-to-value ratio stands at 25%.
Unite said USAF had further investment capacity of £250m-£300m and a number of investment assets that are “currently under offer from third parties”, which it expects to acquire over the coming few months.
Joe Lister, chief financial officer at Unite Students, said: “Demand for high quality investment opportunities in the purpose- built student accommodation sector remains strong, with the full allocation of new equity being taken up by investors.
“The equity raised will allow USAF to continue to improve the quality of the portfolio by continuing to invest in the strongest markets.”
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