Student accommodation firm sells Coventry site as part of £88m deal
STUDENT accommodation provider Unite Students has sold one of its sites in Coventry as part on an £88m deal.
The company, which has also submitted plans for a £40m accommodation scheme serving Birmingham City and Aston Universities, has sold the Gosford Gate site, together with a building in Portsmouth to USAF for a combined value of £88.4m.
Both properties, comprising 1,122 beds, were completed in 2016 and are fully let for the 2016/17 academic year on nominations agreements to Portsmouth University and Coventry University. Together they generate an income yield on cost of 9.3%.
Unite said the disposals increased sales in the year to more than £110m and supported Unite’s strategy to recycle capital and maintain leverage at its target level mid-30% range. The blended valuation yield on the disposals was 5.65%, which the firm said was in line with valuation yields as of June 30, 2016.
The acquisition has been funded by USAF with a new £100m five-year facility provided by Wells Fargo. USAF said the deal strengthened its portfolio and offered positive returns for USAF investors. Unite retains a stake of 23% in USAF.
Joe Lister, Chief Financial Officer of Unite Students, 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.”
