Unite to acquire site in Aberdeen

5th Feb 2014 07:53

Student accommodation manager Unite Group has agreed to acquire a development site covering around one acre in central Aberdeen close to the university. The scheme, which is still subject to planning consent, is expected to have a total development cost of £20m and is set to deliver development yield in line with the company's target returns of 9.5% - 10% yield on cost. The site is a derelict, listed school building and the development will include its refurbishment as part of the design of the property.Richard Simpson, the Managing Director of Property for the group said: "This acquisition marks further progress with Unite's selective regional development programme [...] This site is in an excellent central location, in a market with favourable supply/demand dynamics and in a city we expect to experience continued growth." The scheme will be the second project to be funded from the proceeds of the group's June 2013 share placing following the acquisition of a site in Newcastle in January, and together the two ventures account for approximately 40% of the capital raised. Unite also reported that it was in "exclusive negotiations" to acquire two further sites, which are expected to exchange later in the first quarter of 2014. It said that when contractually secure, the two projects would account for the remainder of the placing proceeds.Simpson added: "The fundamentals of the student accommodation market remain strong with 2014/15 application numbers up 4% on last year, and applications from non-EU students and UK school leavers at record highs. Unite is well positioned for continued growth both through its existing, strong portfolio and new regional developments."NR