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Ahead of the half-year results, due on the 26th July, today we have the Quarterly Fund Valuation Report that gives a good early indication of performance. As well as Unite’s wholly owned student digs Unite run a couple of student property funds of which they own a percentage: The two funds are: USAF – Unite own 23% LSAV – Unite own 50% These funds are independently valued for their large financial institution investors, and the good news is that USAF is up 0.9% and LSAF up 0.5% during the quarter. Also, ‘Reservations for Unite's portfolio stand at 89% for the coming 2017/18 academic year, compared to 87% at the same time last year, and is supportive of achieving target occupancy of 98% across the portfolio and rental growth of 3.0% - 3.5% for the full year.’ So solid progress is likely to be reported on the 26 July with strong demand and the outlook is positive for the full year. I note Mr Market likes the news and has marked the shares up 11p to 651p as I post. Regards Maddox
Unite Students, the UK's leading manager and developer of student accommodation, announces that USAF has exchanged contracts for the acquisition of two assets: a 222-bed development in Durham and a 418-bed scheme in Selly Oak, Birmingham. The combined cost of the developments is £56 million (Unite share £12.9 million). The acquisitions are expected to generate a yield on cost of 6.3% in their first full year of operation. hard Simpson, Group Property Director, said: "These transactions demonstrate our strategy of investing in new, larger and more efficient properties with cluster flat accommodation, available at a lower price point for students. We will continue to deploy funds from the disposals made at the start of the year to further improve the quality of the portfolio and to extend our highly accretive development programme in strong regional locations with top-ranked universities like Durham or Birmingham, where we see the most sustainable growth."
For those asking for more information: http://www.unite-group.co.uk/sites/default/files/2017-03/annual-report-2016.pd
Just received the latest dividends (includes an unexpected extra), which is 10p per share in total or about 1.5%. Probably why the price dropped. I've never quite got my head round why shareholders sell after an extra dividend, but they do. Obviously it is to do with unsatisfied greed...
the late collapse ?
need a tust
i can the infor for this comp
i work for uiite group ... and thery said if i invest £1000 p and the sp go down down i woulg get my money back and if the sp go up i can keep the money i will get the infor
Another solid three month upward trend. Will unite now Stop and Drop or continue back up to previous heights. I watch with interest as a holder for some 10 years.
Investors Chronicle have tipped Unite in this week, following the results: Bull points: >> Record reservation levels >> Strong earnings visibility >> Solid rental growth >> Reit status boosting the dividend Bear points: >> Uncertainty over foreign student numbers >> Strong competition for land IC View: 'Earnings growth in the next few years is likely to be significant. And while there may be doubts about the number of overseas students arriving, there is still a huge shortage of purpose-built space.' 'And yet the shares are trading at a noteworthy discount to forecast net asset value. Buy.' HTTP://www.investorschronicle.co.uk/2017/03/02/tips-and-ideas/share-tips/tips-of-the-week/unite-making-more-beds-HFw1JGvRVMXAsAfT4KfiYJ/article.html
Extremely solid full year results from Unite the highlights being: >> Final dividend up 26% to 12p (2015: 9p) making 18p for the year up 20%overall; >> EPRA Net Asset Value up 12% to 646p per share; >> Like-for-like rental growth 3.8% for the full year (2015: 3.8%); >> The statutory reported profit is £201.4 million (2015: £388.4 million), down on 2015 due to the large property revaluation gain taken into the 2015 figures; and >> Conservatively financed loan-to-value LTV of 34%. The outlook for Unite is positive as well: >> Current reservations at record levels for 17/18 academic year at 73%; >> No material impact seen or anticipated from Brexit; >> Supply/Demand imbalance continues with 185k more applicants than uni places in 16/17; >> Unite rental growth of 3-3.5% in 2017. Mr Market appears to like Unite's prospects with the share price at 629p up from 611p the night prior to the results.. Regards, Maddox
I don't know about the penny starting to drop but the price is...... rgds
Hi rugs, I think that Mr Market may be awakening to the strategic significance of this last deal. Unite is strategically best placed to compete in the secondary market for developed student property. Welcome aboard. Maddox
Thanks Maddox. Your posting sums up why I bought back in today.
Unite have made a substantial £227m acquisition of Aston Student Village comprising 3067 beds over five properties on the campus of Aston University in central Birmingham. Although it doesn't say so I presume bought from Aston University. HTTP://www.investegate.co.uk/unite-group-plc--utg-/rns/acquisition/201702100700065451W/ Reflecting this hot sector of the property market and quality of the asset the yield on purchase is 5% - but Unite intend to grow this to over 6%. I'd pick out a couple of points of significance: >> The yield of 5% is pretty good as it's as good as guaranteed as these properties are the only accommodation offered to Aston's c. 11,000 students; >> The deal reflects UTG's access to substantial funding; >> UTG's existing scale of operation and infrastructure puts it in a strategically strong position in the likely consolidation of the sector; and >> This deal will put Unite as prime candidate for similar deals by other universities looking to realize the value in their student accommodation assets. Whilst, we're foregoing the 3% development yield gain on this new approach we'll be seeing the benefit far earlier in NAV and EPRA earnings. It's also worth noting that Unite is still very conservatively financed with loan-to-value (LTV) rising to 38% from 35% previously; and with the ability to sell its developed properties into either of its two managed funds (USAF or LSAF). Unite has unique advantages to compete effectively in this attractive sector of the property market. Regards, Maddox
As well as its fully owned property Unite run a couple of student property funds of which they own a percentage. As well as earning management fees from these funds, there is also the possibility for a performance based bonus. So great news, as announced today, rental growth is continuing to drive the property fund portfolio values up – and Unite will receive a £6m bonus! The two funds are: USAF – Unite own 23% – up 4% on an annual basis LSAV – Unite own 50% -up 5% on an annual basis These funds are independently valued - and so provide an excellent indication of Unites' coming results. Regards Maddox
Having owned Unite shares for many years I have great faith in the management of Unite Group and really think that 2017 will see us racing towards £7.
Hi Courtier, Yep the crucial passage in your posted link is: 'REITs are required by law to maintain dividend payout ratios of at least 90%, making them a favorite for income-seeking investors. REITs can deduct these dividends and avoid most or all tax liabilities, though investors still pay income tax on the payouts they receive.' Unite has tax losses that have been used to off-set against corporation tax - but these will be all used up in 2016. So converting to a REIT then becomes an attractive means of reducing tax and consequently providing a higher tax free (at source) income for shareholders. Unite's payout ratio was 65% in 2015 and so we can expect a nice rise in dividends for f/y 2017 if REIT conversion is approved. The 1H 2016 interim dividend was increased by 9% and I am expecting to see a higher increase for the full year. So as Unite matures and cash generation grows this will pass through to shareholders in growing dividends and also translate into a higher NAV and share price. As Unite is currently trading at a discount to the independently valued 620p Net Asset Value per share - it looks a very attractive investment from here IMHO. Regards, Maddox
Look in investopedia here. http://www.investopedia.com/terms/r/reit.asp
Thank you Maddox for a considered report. The occupancy numbers and growth in student numbers are what we have come to expect as Unite shareholders. I don't know why the market seems to expect something weaker... The continued investment, planning and renovations are good news. I think the recent fall in the share price is either an anomaly or a bad dream. I do not really understand the (tax?) advantages to being a Real Estate Investment Trust.
Another positive trading update from Unite this morning covering the current 2016/17 academic year. Key points: >> Occupancy 98% >> Rental growth + 3.8% >> On track for EPS yield growth of 4.5% for 2016. >> Market - 2016/17 sees record student numbers up c.40k The growth in student numbers is further exacerbating the existing under-supply of student accommodation. Another positive point is that the growth has been strongest in Unite's target locations. With a positive outlook and development pipeline of a further 5,500 beds transparency of future growth in NAV and income is excellent and with REIT conversion will be seeing a likely 10% increase in the payout ratio. The future is of course uncertain but it's difficult to find any points of concern that would explain the recent fall in the share price. As I post the sp is 566p against last reported NAV of 620p as at 30 June. Regards, Maddox
Will the dividend payable now make further difference? I automatically reinvest my dividends because I get such a low investment charge. So at least I might get a good price this time.
....and as I've said previously - for anyone tracking UTG - the shorters are presenting a great opportunity to get into UTG at a good price. But you'll probably need to be quick. The trading pattern of Unite, and the lack of RNSs suggest that the shares are tightly held by FIs. When the shorters look to buy-back the shares to close their positions the sp might shoot back up pretty rapidly.
A tip for Unite investors.... The hedgies have to borrow stock in order to sell short. Typically, the Nominees holding investors' shares will lend the stock to shorters for a fee. If you object to your shares being used to drive down the share price of your holding - you can prevent it. Just place a Limit Order to sell your holding at a much higher price - say for UTG the 770p JPM target. This prevents the Nominee from lending your stock or makes them have to recall it from the shorter. Regards, Maddox
Well some of these hedgies aren't so big - CQS (UK) LLP - asset value was c. £90m as at Dec 2013. No point going after really big fish when you are small fry!