Unite Regulatory News (UTG)

THE UNITE GROUP PLC

("Unite Students", "Unite", the "Group", or the "Company")

USAF ACQUIRES 2,100 BED STUDENT PORTFOLIO FOR £271 MILLION

Unite Students, the UK's leading developer and manager of student accommodation, announces that the Unite UK Student Accommodation Fund ("USAF"), in which the Group has a 22% stake, has exchanged contracts to acquire a 2,100 bed student accommodation portfolio for £271 million. The acquisition will be funded in cash from the proceeds of USAF's recent equity raise, announced on 19 May 2015. The acquisition will complete by 30 June 2015.

The portfolio, acquired from Ahli United Bank ("AUB"), represents the entire AUB UK Student Accommodation Fund and comprises eight modern, high quality assets located across seven prime student accommodation markets that complement USAF's existing portfolio. The acquisition increases USAF's property portfolio value by 16% from £1.64 billion to £1.91 billion, comprising 26,920 beds in 76 properties across 25 UK towns and cities.

Five of the assets are located in existing USAF markets (London, Glasgow, Leeds and Birmingham), with London representing 36% of the total portfolio. The other three assets are located in new markets, Oxford, Durham and York, that all offer growth potential. The portfolio benefits from robust direct let demand for 70% of income while 30% is underwritten by University agreements with the London School of Economics and Oxford Brookes University.

The purchase price represents a net initial yield of 5.0%, comprising 5.6% for the prime regional direct let assets, 5.1% for the prime London direct let asset and 4.1% for the leased assets. The portfolio offers significant reversionary potential that we expect to unlock over the next two to three years increasing the portfolio net initial yield to 5.6% on a pro forma basis, i.e. before accounting for further market rental growth. These yields are in line with recent transactions in the student accommodation sector and are approximately 25bps keener than the yield on comparable USAF assets as at the 31 March 2015 valuation and approximately 50bps keener than those as at 31 December 2014.

The acquisition will be immediately accretive to USAF's earnings per unit and accretive to its NAV per unit within one year. Unite's share of incremental earnings, together with additional management and acquisition fees, is expected to add approximately £2 million (0.9 pence per share) to the Group's EPRA Earnings over the remainder of 2015 and approximately £3 million (1.4 pence per share) per annum on a subsequent, recurring basis. Following the transaction, USAF's loan to value ratio is 33%, well within its objective to maintain leverage below 40%.

USAF continues to achieve good rental growth and high occupancy levels across its portfolio.

Commenting on the acquisition, Mark Allan, CEO of Unite Students said: "Following its recent capital raising, we are delighted that USAF has been able to complete the acquisition of one of the highest quality portfolios in the market. The portfolio is highly complementary to USAF's existing portfolio and we see real opportunities to drive additional value through the introduction of our brand and operating platform as well as specific asset management opportunities."

ENDS

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Notes to editors:

About the Unite UK Student Accommodation Fund ("USAF")

USAF is an open-ended non-listed real estate fund that focuses on acquiring and operating high quality student accommodation in the UK.

USAF is the largest specialist student accommodation fund in the UK and now holds a portfolio of 76 properties valued at over £1.9 billion which are located in 25 markets across the UK providing 27,000 bed spaces.

Established in December 2006, USAF has raised equity capital totalling over £950 million from UK and European institutional property investors on a periodic basis to raise funds for acquisitions and to manage leverage.

USAF has over 100 investors. Unite is the largest investor with a current co-investment stake of approximately 22%. Unite also acts as manager of USAF and operates its properties.

About Unite Students

Unite Students is the UK's leading manager and developer of student accommodation. We now provide a home for over 45,000 students in 135 purpose built properties across 28 of the UK's strongest university towns and cities. We have over 1,100 employees and work in partnership with over 55 higher education providers, as well as renting rooms directly to students.

Our culturally-diverse customers are at the heart of our business and we aim to provide a home for students that supports their success, whether defined as academic achievement, personal growth or employability. Our properties provide high quality, well-located, safe accommodation that is close to university campuses, transport and local amenities. Our rent includes a study bedroom, all bills, insurance, 24-hour security and high speed Wi-Fi throughout our buildings.

Founded in 1991, Unite Group is a FTSE 250 company listed on the London Stock Exchange. We are pursuing a sustainable growth strategy designed to make the most of the resilient nature of the student accommodation sector. We aim to maintain the strongest brand in the sector and operate the highest quality portfolio through consistent investment in and improvement to our operating platform, highly selective development activity, asset management initiatives and portfolio recycling.

In addition to our wholly owned properties, we are also invested in and operate a small number of specialist funds and joint ventures with institutional investment partners, the largest of which is the £1.6 billion Unite UK Student Accommodation Fund.

The Group's charitable trust, the Unite Foundation, supports widening access to higher education, integrating students into the community and employability. It provides scholarships for disadvantaged students at seven universities and volunteering opportunities for our students and employees through partner organisations.

For more information visit our corporate website: www.unite-group.co.uk or www.unite-students.com.