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Unite Group to expand regional student housing pipeline

Unite Group has reported a 16.6 per cent increase in profits in the first half of 2014 and a growing pipeline in London and across the UK.

In the first six months of 2014, Unite acquired four regional development sites in Newcastle, Aberdeen, Edinburgh and Portsmouth, which will be delivered by 2016.

Projects at those sites will create 2,261 new student bed spaces with a development value of £125m.

It also secured two further regional schemes comprising 1,000 new bed spaces under lock-out agreements.

The developer completed a placing of 24.5m new ordinary shares in March, raising £96m to extend its regional development programme for projects to complete in 2017.

In London, Unite received planning consent for two sites in Wembley and Islington (pictured) to build 1,600 new bed spaces with a total development value of £133m.

Unite chief executive Mark Allan said: “Following the success of securing four excellent regional sites in Aberdeen, Edinburgh, Newcastle and Portsmouth during the period, our planned programme of 2016 completions is established.

“We are now focused on securing strong regional projects for 2017 completion, which will be funded from proceeds of the recent share placing.

“We expect to secure a 2017 regional pipeline of similar size and quality to our 2016 projects over the next six months.”

The student accommodation developer’s profit after tax increased by 16.6 per cent to £43.6m in the first six months of 2014, compared with £37.4m in the same period last year.

Unite said the outlook for the student accommodation sector remained strong with university applications for 2014/15 up 3.6 per cent year-on-year.

However, it added that rising land values was “encouraging some vendors to delay land sales, which has slowed the rate at which new projects are being secured”.

In July 2014, Unite acquired a 3,000-bed student accommodation portfolio for £137m.

It is also investing £40m over two years in a refresh programme, which includes updating common spaces in its existing properties and installing LED lighting.

Reception and common rooms were refreshed at 15 properties in the first half of the year. The remaining buildings will be completed over the next 12 months at a rate of 15 per month.

Overall, 92 per cent of its available rooms had been reserved as at 27 August, with an expected rental growth of at least 3 per cent for the full year.

Current projects

London

  • Stratford City, Stratford (1,001 beds) £64m; 2014 completion
  • St Pancras Way, Camden (571 beds) £59m; 2014 completion
  • Angel Lane, Stratford (759 beds) £54m; 2015 completion
  • Stapleton House, Islington (862 beds) £85m; 2016 completion
  • Olympic Way, Wembley (696 beds) £48m; 2016 completion              

Regional

  • Huddersfield (378 beds) £14m; 2014 completion
  • Bristol (483 beds) £26m; 2015 completion
  • Newcastle (606 beds) £31m; 2016 completion
  • Aberdeen (346 beds) £20m; 2016 completion
  • Edinburgh (550 beds) £38m; 2016 completion
  • Portsmouth (759 beds) £36m; 2016 completion

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