(Alliance News) - Unite Group PLC on Tuesday said it has raised GBP300 million through a placing, subscription and retail offer of shares.
The Bristol-based owner, manager and developer of purpose-built student accommodation unveiled plans to raise GBP300 million on Monday, in order to fund two new development schemes and accelerate initiatives to enhance future returns.
The shares were priced at 905 pence each, a 4.2% discount to the closing price of 945p on Monday.
Shares in Unite Group were down 1.5% to 930.50 pence each in London early Tuesday.
On Tuesday, Unite said that a total of 32.7 million new shares were placed, raising GBP296 million.
Directors of the company have subscribed to 13,253 shares, raising GBP120,000. In addition, retail investors have subscribed to 441,989 shares, raising GBP4 million.
Together, the placing, subscription and retail offer comprises of 33.1 million new shares, raising about GBP300 million. The issued shares together represent about 8.2% of the existing issued ordinary share capital of the company prior to the capital raise.
Proceeds will be used to commit to two additional development schemes in Bristol and London, with a total development cost of GBP277 million and accelerate asset management initiatives through a further GBP50 million of projects for delivery in 2024 and 2025 at yields on cost of over 8%.
Unite said it expected the fundraise and use of proceeds to be earnings accretive from 2024 as new developments and asset management investments are delivered.
"The successful completion of this fundraise is further evidence of the strong investor support for Unite, our future prospects and the structurally attractive supply and demand dynamics of the student accommodation sector," said Chief Executive Officer Richard Smith.
"The net proceeds will be used to commit to two additional developments, increasing our committed pipeline to over GBP600 million, as well as increasing investment into our existing estate through asset management projects, which will enhance future returns. These investments will allow Unite to continue to play a major role in creating new supply of high quality, affordable accommodation where the need is greatest, as well as supporting the growth of our university partners."
By Sophie Rose, Alliance News reporter
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Unite (UTG)