Unite Students has announced the exchange of contracts for the disposal of a portfolio of nine purpose-built student accommodation (PBSA) properties, comprising 3,656 beds for £212m (Unite share: £14m) to an affiliate of Lone Star Funds.
The disposal portfolio includes assets in Aberdeen, Leicester, Leeds, Nottingham and Sheffield. The portfolio has nomination agreements covering 11% of beds for the 2024/25 academic year (Unite: 57%) and an average age of 19 years (Unite average: 13 years).
The disposal is part of the Group’s strategy to increase alignment to high and mid-ranked universities and those properties with the strongest prospects for sustainable long-term rental growth. The disposal will see the Unite fully exit the Aberdeen market.
The disposals are priced at around a 1% discount to December 2024 book value and reflects a net operating income yield of 6.4% based on 2025/26 income. Contracts have been exchanged with completion due in August 2025.
Proceeds will be recycled into investment activity in Unite’s strongest markets, including their recently announced university partnership with Manchester Metropolitan University, and used to satisfy the remaining redemption requests in USAF.
Unite Students and Newcastle University have also recently been granted planning permission for the redevelopment of the university’s Castle Leazes student accommodation.
Since 2022, the Group has now sold 12,000 beds, recycling over £700m into its strongest markets and new investment opportunities.
“These disposals increase the alignment of our portfolio to the strongest university cities and continues our disciplined approach to recycling capital. Purpose-built student accommodation continues to attract institutional capital as the growing UK 18-year-old population and improving trends in international recruitment underpin demand for high-quality student accommodation”.
Joe Lister, Unite Students Chief Executive
The properties were treated as held for sale in the balance sheet as at 31 December 2024 and the disposal is incorporated into the company’s guidance for EPRA EPS of 47.5-48.25p for the 2025 financial year, which remains unchanged.
