Trading Update and CMA Update
11 September 2019
THE UNITE GROUP PLC
('Unite Students', 'Unite', the 'Group', or the 'Company')
UPDATE ON TRADING AND TIMETABLE FOR THE ACQUISITION OF LIBERTY LIVING
The Unite Group plc, one of the UK's leading owners, managers and developers of student accommodation, announces an update on current trading and the timetable for the proposed acquisition of Liberty Living.
Student intake in 2019/20 is expected to be in line with the record levels seen over the past few years with growth in the University cities where Unite operates. We have continued to see strongest growth in acceptances at higher tariff Universities, which have risen by 1.8% versus last year.
As we enter the final stages of the lettings cycle for the 2019/20 academic year, Unite Students has achieved a strong lettings performance across its portfolio with 98% of bed spaces let. This follows a strong sales performance in summer 2019 with revenue around 40% higher versus last year. As such, we remain confident in delivering rental growth of 3.0-3.5% for 2019/20 and 2020/21, including improved utilisation.
The Competition and Markets Authority (the 'CMA') has today confirmed the start of its Phase 1 merger inquiry in relation to our proposed £1.4 billion acquisition of Liberty Living. Completion of the acquisition is conditional upon CMA clearance and is anticipated in Q4 2019. We remain confident, based on the revised timetable, of delivering the previously outlined cost synergies of £4 million in 2020 and £15 million p.a. from 2021.
Richard Smith, Chief Executive of Unite Students, commented:
"Demand for UK Higher Education remains robust, as reflected in the record share of 18-year olds choosing to attend University. Student demand also supports our strategic alignment to mid and higher tariff Universities. Despite increased political and economic uncertainty, we maintain our positive outlook for the business, reflecting the strength of our operational and letting performance and opportunities to drive further improvements in utilisation and efficiency while investing in further value-added services for our students."
For further information, please contact:
Richard Smith / Joe Lister / Paul Richmond Tel: +44 117 302 7005
Justin Griffiths / Victoria Heslop Tel: +44 20 7250 1446
About Unite Students
Unite Students is one of the UK's largest owners, managers and developers of purpose-built student accommodation serving the country's world-leading higher education sector. We currently provide homes for almost 50,000 students in circa 130 properties across 22 leading university towns and cities in England and Scotland. Unite also has a strong development pipeline, which will deliver more than 6,000 beds in the next three years.
Our 1,400 people are driven by a common purpose: to provide the students who live with us a 'Home for Success' and to be the most trusted brand in the sector. We do this through quality service, quality people and quality properties, all designed on the basis of an excellent insight into students' needs and preferences.
Unite's accommodation is high quality, safe and secure, and located where students want to live. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning services and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.
Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.
Alongside delivering quality service, our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure. A key part of this strategy is growing the number of beds let through partnerships with mid and high tariff universities which are experiencing record levels of student demand. We currently partner with 60 higher education institutions, guaranteeing that approximately 60% of our rooms are let under multi-year, 'nomination agreements' providing high visibility of forward occupancy and rental growth.
Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £2 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).
Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation annual scholarships. The Foundation has so far provided scholarships for 250 young people working in close collaboration with 29 partner universities.
Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.
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