Unite Share News (UTG)

(Sharecast News) - Unite Group announced the sale of six properties to PGIM Real Estate on Monday, for £184m, with its share amounting to £76m.

The FTSE 100 student accommodation provider said the properties, comprising 2,948 beds, were located in Birmingham, Cardiff, Leicester, Liverpool, Nottingham, and Sheffield.

With an average age of 18 years, 31% of the beds were currently let on short-term nomination agreements, differing from Unite's average of 53% with an average remaining term of 5.8 years.

The move aligned with Unite's overarching portfolio management strategy, emphasising a focus on high and mid-ranked universities showing robust projections for student demand.

By divesting from properties with lesser outlooks and directing resources towards those with stronger potential for sustainable rental growth, Unite said it aimed to optimise its portfolio for future success.

The sale of the properties was executed at a price in line with their book value, reflecting a net operating income (NOI) yield of 6.2%.

Unite said the proceeds from the transaction would be reinvested into asset management, and used to fulfil redemption requests within the Unite Student Accommodation Fund (USAF).

The board said its guidance for adjusted earnings in the 2024 financial year remained unchanged at 45.5p to 46.5p.

"These disposals continue our disciplined approach of recycling capital for reinvestment and further increases our alignment to the strongest universities," said chief executive officer Joe Lister.

"The growth outlook for purpose-built student accommodation remains compelling and we are tracking a number of new investment opportunities at attractive returns."

Reporting by Josh White for Sharecast.com.