UK: PBSA developer and operator The Unite Group has raised £450 million to accelerate the delivery of new student accommodation.
Unite confirmed the successful completion of the placing, subscription and retail offer announced earlier this week.
The proceeds of the raise will be used to acquire seven income producing assets, fund the business’ equity commitment to its joint venture at Newcastle University, and to commit to two secured development schemes and two new development opportunities with planning approval.
A total of 49,686,114 new ordinary shares in the capital of the company were placed with institutional investors by J.P. Morgan Securities plc and Numis Securities Limited, raising gross proceeds of about £447 million.
Placing shares have been issued at a price of 900 pence per share. The placing price represents a discount of 2.6 per cent to the middle market closing price on 23 July 2024 of 924 pence.
Concurrently with the placing, certain directors of the company have subscribed for an aggregate of 13,886 new ordinary shares in the capital of the company at the placing price, raising gross proceeds of approximately £125,000.
In addition, concurrently with the placing, retail investors have subscribed in the separate offer made by the company via the PrimaryBid platform for a total of 300,000 new ordinary shares at the placing price, raising gross proceeds of approximately £3 million.
Together, the placing, subscription and retail offer in aggregate comprised 50,000,000 new ordinary shares, raising gross proceeds of approximately £450 million for the company.
J.P. Morgan Cazenove and Deutsche Numis acted as joint bookrunners in respect of the placing.
Joe Lister, chief executive of Unite Students, said: “This successful completion of our capital raise reflects the significant investor support for Unite Students and our growth prospects as well as recognition of the continued strong fundamentals of the student accommodation sector. The proceeds will support a doubling of our committed pipeline by year end to over £1bn and see us acquiring assets with asset management potential from USAF to enhance our future returns. This capital raise enables us to accelerate the delivery of new, high quality, affordable student accommodation where it is needed most and support the growth ambitions of our university partners.”
The company has also released its half-year results for the six months to June 30th, which showed adjusted earnings of £125.3 million, up 14 per cent on the same period the previous year.
“We have had a strong first half, with 14 per cent growth in adjusted earnings underpinned by full occupancy, rental growth and substantial investment into our platform and portfolio,” said Lister. “There is an acute and growing shortage of student homes, which is amplified by a shrinking private rental sector and depressed levels of new PBSA development. Unite has a crucial role to play in partnering with universities to deliver new supply of high-quality, affordable accommodation where the need is greatest, which also frees up local family homes in the process. Our development pipeline has grown to a record £1.5 billion for delivery into the strongest university markets, including our first university joint venture with Newcastle University. We are uniquely positioned to secure further opportunities to support the growth of our university partners through our long standing and trusted relationships, in-house development capability and best-in-class operating platform.
“Our alignment to the UK’s strongest universities, alongside a growing range of attractive investment opportunities and a more supportive policy environment, puts us in a strong position to deliver continued long-term growth for shareholders,” he added.
