Unite sees 8% NAV rise

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Unite Group, the student accommodation provider, saw its net asset value increase by 8% to 318p a share in 2011 on the back of good rental growth and development profits.

In its annual results announced today it said profits had increased to £11m in the year to 31 December, up from £4m in 2010, by achieving 99% occupancy for the 2011 - 2012 academic year and delivering 3.1% like-for-like net operating income growth across the portfolio.

However this was offset by trading losses and a £21m charge arising from the decision to cease trading at Unite Modular Solutions.

The group’s development pipeline is on track to deliver a further £40m of net asset value uplift by December 2014 as the outlook for 2012 remains good. Demand for 2012 - 2013 University places is outstripping supply which will result in a shortfall of at least 160,000 places, Unite said. As a result further development opportunities will be pursued, subject to prudent management of the group’s financial position.

Since June 2011 the group has completed £47m of asset sales with a further £14m under offer. Its target of completing £100m to £150m of disposals by December 2012 remains.

The group arranged £234m of senior debt facilities in 2011 on behalf of Unite, USAF and joint ventures and its £82m facility with RBS  was extended to 2015.

Mark Allan, chief executive of the Unite group, said: “High occupancy across the portfolio, solid rental growth and effective cost management drove a step change in the profitability of our core business. Meanwhile our decision to close our modular manufacturing unit leaves a more focused business and continued success in our forward development pipeline and investment in our operating platform have laid the foundations for further growth.”

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