Unite completes £144m asset sale

29th Nov 2010 07:42

Student accommodation business Unite Group has completed the sale of assets to the Unite UK Student Accommodation Fund for £143.9m in cash.The fund will take on 1,679 bed spaces across four properties in London, Leeds and Bath - a portfolio that is 97% let for the 2010/11 academic year.Unite said the disposal crystallises £9.3m of development profits. It will use the money to pay down debt of £104.5m and the rest for reducing gearing near term and as a warchest for future acquisitions.The deal, first flagged earlier this month, is expected to release about £40m of capital and have a dilutive impact on earnings in 2010 and 2011.Based on current gearing and liquidity targets, the fund is now effectively fully invested. "The planned sale of stabilised assets to the UNITE UK Student Accommodation Fund is in line with UNITE's ongoing developer and co-investing fund manager business model," said Unites finance chief Joe Lister.