(Sharecast News) - Student accommodation owner, developer and manager the Unite Group announced the disposal of two assets for £100m to the Unite UK Student Accommodation Fund (USAF), of which its share was £75m, representing a net initial yield of 5.5%.
The FTSE 250 company said the sold assets are located in Birmingham and Newcastle, and comprise a total of 1,155 beds.
In addition, USAF was launching and pricing £85m of bonds issued under its existing debt funding platform - the 3.921% bond due in June 2025.
The new issue was being placed at a premium to par generating total proceeds to USAF of £95m , reflecting an implied yield of 1.83%.
Unite said the proceeds would be used to fund further growth in the fund.
It said its share of the new debt represented approximately 2% of its total borrowings, on a see-through basis, as at 30 June.
The issue would support a further marginal reduction in the group's cost of debt.
"The disposals by Unite to USAF form part of our plan to dispose of £150m-£200m of assets per annum during the next three years following the acquisition of Liberty Living," said Unite Group's chief financial officer Joe Lister.
"These planned disposals will fund our development activity and support our target to reduce loan-to-value to 35% by 2021."
Unite (UTG)11 Apr 2024 15:09