The biggest UK student accommodation developer, Unite Group PLC, has sold off £181m worth of student accommodation blocks as it goes through a changes of strategy, now focusing on “high and mid-rank universities”, mostly in major UK cities.
The company, which is listed on the FTSE 250 index, has agreed the sale of 14 of its properties which in total provides 3,436 rooms for the Asian media giant, Singapc Press Holdings, which has been looking to expand its own property investment portfolio.
Five large blocks of student flats have been sold in Plymouth as the city sees student demand still rising. Unite, the UK’s leading manager and developer of student accommodation, has sold its entire Plymouth portfolio, and a similar situation existed in Hunddersfield.
Unite builds and manages private student halls, some in collaboration with universities and joint venture partners, will pocket around £85m. With these proceeds it intends to set up joint ventures for further developments in the high and mid-rank university towns and cities.
Unite sees the strategy as selling off those properties with low growth potential, using the released funds to boost investment in those areas with better prospects.
Richard Smith, Unite’s chief executive, told The Daily Telegraph:
“The UK’s high and mid-ranked universities are some of the most attractive for both home and international students, ensuring demand for our beds remains high.”
Although this sell off will in the short-term weaken Unite’s earnings by around £2.5m per year, they see it as improving the overall quality of its earnings potential in the longer run.
With 50,000 beds in its student portfolio the Bristol based company recently announce a 70% increase in half year pre-tax profits to £142.5million.
Unite Group PLC – annual report here