Student accommodation developer also reports increased profit in first half
Unite Students has announced a capital raise to bring in £450m.
The proceeds of the raise would be used to acquire seven income producing assets, fund the business’ equity commitment to its joint venture at Newcastle University.
It will also be used to commit to two secured development schemes and two new development opportunities with planning approval.
The placing, which will be conducted by JP Morgan and Numis Securities, brings the total investment in Unite to around £700m.
The board of the purpose-built student accommodation developer said it believes the current market, in which there is “significant unmet demand”, offers “a compelling opportunity” to accelerate the company’s growth.
Unite’s interim results for six months to 30 June 2024, which were released alongside the announcement, revealed reservations for the 2024/25 academic year were at 94%.
“Unite is uniquely positioned to take advantage of a significant market opportunity to support the growth of the UK Higher Education sector,” said Joe Lister, chief executive of Unite Students.
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“This opportunity is underpinned by demographic growth and strong international student demand as well as a growing recognition from universities that they will need strategic partners to help them meet their housing needs.
“At the same time, the supply squeeze for student accommodation continues, driven in part by the rapid retreat of the private rental sector and slowdown in new supply, and this is particularly acute for the strongest universities.
“These factors support a positive outlook for our business creating a range of compelling investment opportunities. The capital raise will enable us to accelerate £700m of investment into our strongest markets.”
Unite’s interim results also revealed pre-tax profit of £283.9m, compared with £112.2m in the first half of 2023.
The firm has a £1.5bn pipeline in Russell Group cities and secured planning in the first half for 2,400 beds in London, Bristol and Glasgow.
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