Unite Regulatory News (UTG)

THE UNITE GROUP PLC

("UNITE" / "Group" / "Company")

UNITE COMPLETES £226 MILLION UCC FINANCING WITH L&G AND RBS

The UNITE Group plc ("UNITE"), the UK's leading developer and manager of student accommodation, today announces the completion of new debt facilities totalling £226 million for the UNITE Capital Cities joint venture ("UCC").

UCC is a joint venture between UNITE and the GIC that currently holds a portfolio of 14 properties valued at £385 million, located in London and Edinburgh; UNITE currently has a 30% stake in UCC.

The funding was completed on 19 December 2013 and is provided, in two separate facilities, by Legal & General ("L&G") and the Royal Bank of Scotland ("RBS"). Legal & General has provided a £149 million, nine year loan which is at 55% loan to value and is fixed at 4.3% per annum for its duration. The RBS facility for £77 million is five years in duration at an initial loan to value of 68% and average cost of 3.3% per annum.

The transaction reduces UCC's cost of finance from 5.5% to 4.0% generating annual savings of approximately £3.5 million. These savings will offset swap break costs of £7.1 million, of which £2.1 million is UNITE's share.

Following the transaction the UNITE Group's see through cost of debt falls by 13 basis points to 4.7% and the Group has a weighted average loan maturity of six years with two thirds of the debt provided by non-bank sources.

The completion of this transaction will result in the payment of a performance related fee from UCC to UNITE of around £7 million. The £7 million fee represents the net receivable by UNITE that will be recognised as a one-off item in Adjusted Earnings in the Group's 2013 results and excludes the Group's share of the swap break cost. The fee will be used to increase UNITE's stake in UCC in 2014 as part of the strategy to consolidate the Group's two joint ventures with GIC. As a result of the planned re-investment of the performance fee, UNITE's stake in UCC is expected to increase to 34%.

L&G's loan has been arranged by L&G Commercial Lending Ltd, which also acts as facility agent. As a long-term provider of investment capital, L&G has invested over £3 billion in UK infrastructure projects to date and is one of the six UK insurers committed to investing £25 billion in the UK over the next five years. As part of this, the deal signifies the latest addition to L&G's direct investments to the student sector which now amount to around £1 billion.

Joe Lister, Chief Financial Officer of the UNITE Group plc, commented: "The completion of these new £226 million facilities concludes a year in which we have made real progress extending debt maturities, reducing the cost of financing and securing high quality long-term funding partners. We are delighted to extend our relationship with Legal & General and RBS, and to have secured the long term financing for UCC."

Steve Boyle, Real Estate Lending Manager at Legal & General, said: "Representing a further sizeable loan to the student accommodation market and allowing UNITE and ourselves to build on our already strong relationship, we believe that our familiarity with the sector enabled us to provide keenly priced finance within a tight timeline.

"Forming part of our annuity portfolio, this investment provides long-term liability matching qualities and will be used to pay customers' pension annuities. It is further evidence of L&G's desire to make a difference in the wider world of accommodation and is merely one of a number of residence based projects across different sectors that we have under consideration."

Andy Lancaster, regional managing director for Real Estate Finance, Royal Bank of Scotland, said:"We are delighted to have been involved in this transaction and to be supporting this high quality management team with their continued growth of the business. While both UNITE and GIC are existing clients of RBS, this is our first transaction with UCC which combines the two entities. The transaction demonstrates our continued appetite for the corporate real estate sector generally, and the purpose-built student accommodation sub-sector in particular."

ENDS

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Notes to editors:

About UNITE Capital Cities Joint Venture

UCC is a joint venture with GIC, the real estate investment arm of the Government of Singapore Investment Corporation (GIC). Established in 2005 to develop new properties, UCC holds a portfolio of 14 properties located in London and Edinburgh valued at £385 million at 19 December 2013. UNITE currently has a 30% holding in UCC, with GIC holding the remaining 70%.

About The UNITE Group

The UNITE Group is the UK's leading developer and manager of student accommodation, with a business model that focuses on two core areas:

1. Development and Asset Management: UNITE undertakes the acquisition, planning and development of purpose-built student accommodation in the UK. Through the continuous assessment of quality and location of its investment portfolio, UNITE is well positioned to deliver value-adding strategies to those assets where further opportunities are identified. Working on behalf of its partners, UNITE acts as Fund Manager for the UNITE UK Student Accommodation Fund in which it owns a 16.3% share. UNITE also manages a number of Joint Venture partnerships.

2. Professional property management: UNITE is home to 42,000 students in over 130 properties across 23 of the UK's strongest university cities, and has consistently proven high occupancy levels across its portfolio.

The Group works closely with higher education institutions in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets. In 2012, UNITE won the South West Business in the Community (BITC) Carbon Reduction Award for its environmental initiatives and was recognised as the residential regional sector leader for sustainability by the Global Real Estate Sustainability Benchmark (GRESB).

Founded in 1991, UNITE is a FTSE 250 company listed on the London Stock Exchange (UTG). For more information, please visit www.unite-group.co.ukor www.unite-students.com.