Unite raises funds for development and acquisition of new units

25th Mar 2014 07:56

Unite Group on Tuesday revealed it had had a positive reaction to its placing and open offer, from which it has raised 96m pounds after expenses. A total of 15.75m shares were taken up under the open offer, a further 1.07m were taken up with the placing, and just under another 7.68m shares were issued through a firm placing. Mark Allan, Chief Executive of Unite, said: "We are delighted with the strong support shown by our shareholders for our strategy. "The outlook for the student accommodation sector is positive and, as a result of the successful conclusion of this fundraising, Unite is ideally placed to build further on its track record of sustainable, profitable growth."The shares were issued at 410p, which reflects a 9.3% discount to the closing price on March 5th, the day before the transaction was first announced.Half of the proceeds will be used to fund an acceleration of the group's targeted regional development programme in select key university towns and cities, taking advantage of cyclically low development costs. The group said the capital is expected to be committed to new projects by the end of 2014 and achieve its target returns of 9.5-10% yield on cost.The other half will be used to acquire new units in the Unite Student Accommodation Fund, increasing its stake from 16% to 22%. The fund is expected to deliver a total return of 12-13% in 2014, including a 7% annualised income return. The issue of all the shares was conditional. NR