Unite Group, the listed student accommodation provider, is aiming to turn itself into a co-investing property fund manager

Following the lead set by Capital & Regional and Warner Estate Holdings among others, Unite announced today that it was ‘evaluating’ the creation of a student accommodation fund.

The fund would acquire the bulk of Unite’s completed and ‘stabilised’, direct-let properties – as opposed to those properties that it leases to universities – other than those in its first securitised portfolio.

While the fund would acquire the direct-let properties, Unite would retain a ‘significant minority stake’ in it and act as the fund and property manager.

‘Such a transaction would release capital to repay debt and for reinvestment in ongoing development to support future growth,’ the company said.

Unite is considering the co-investing fund management move instead of possible REIT conversion.

Chief financial officer Mark Allan confirmed this morning: ‘We have given detailed consideration to the proposed UK REIT structure to be introduced in 2007.

‘We have concluded that Unite is unlikely to convert to REIT status in the short term, given our continuing levels of development activity.’

The news came in a trading update this morning, which reported ‘good progress in the year to date, in line with the board’s expectations’.

In the 2006/07 academic year, Unite is on track to operate 35,272 bedrooms and reservations are already at 78%.