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Student accommodation specialist wary of new developments

The Unite Group has said its pipeline of six student accommodation projects were on course, but warned it would not commit to any new schemes until it had resolved its debt situation.

In its interim management statement for the period from July 1 to November 15, the specialist developer said it had achieved a “very strong” sales performance, with 99 per cent of its rooms sold.

Like-for-like operating profit grew 3.1 per cent in the period, exceeding management expectations, while the group’s four projects for 2011 were opened on time and on-budget, in Glasgow, Manchester, Reading and London.

Construction activity has commenced on each of the Group’s 2012 openings, comprising three properties in London and one in Glasgow.

Planning consent and debt finance has been secured for a 563 bed project in Camden, central London due to open in 2013, with construction expected to commence in early 2012.

A planning application has also been submitted for the Group’s first 2014 opening - a 902 bed project in Stratford, East London.

Mark Allan, Chief Executive of The UNITE Group, said: “We have continued to make good progress in line with our strategy and have seen excellent performance through the third quarter, in terms of reservation levels, customer service and financial performance.

“We remain well positioned to outperform the wider student accommodation sector as a result of our London focus, the high quality of our portfolio, strong university relationships and our established brand platform. However, we continue to monitor closely the capital markets and the broader economic picture and believe that a cautious approach to investment and managing debt is prudent in the near term.”

The statement said the group recognised attractive development goals, but said it wanted to maintain a cautious approach.

“The group has £200 million of debt facilities maturing on balance sheet in 2013 and will not make any development commitments… until these debt maturities have been addressed,” the statement said.

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