Unite Student Accommodation Fund estimated NAV up 3.8 per cent in Q2

By Bridging Loan Directory -

 

The Unite Group says the estimated net asset value of the Unite UK Student Accommodation Fund was GBP660.0m at 30 June 2012, reflecting an increase of 3.8 per cent during the second quarter of 2012.

In arriving at the value of the fund, its property portfolio, which comprises 21,280 beds in 59 properties across 20 UK towns and cities, was independently valued at GBP1,270m.

During the quarter the fund sold a portfolio of four assets in Manchester comprising 437 beds for GBP21m, in line with their carrying value.

The movement during the quarter represents a like-for-like increase of 1.0 per cent (1.5 per cent in the year to date) in the underlying value of the property portfolio, driven by strong quarterly rental growth against a stable valuation yield during the quarter of 6.67 per cent (31 March 2012: 6.67 per cent). In line with previous years, further rental growth is expected to be achieved as reservations for the forthcoming 2012/13 academic year progress.

Reservation levels for the forthcoming academic year stand at 71 per cent of the fund’s bed spaces reserved. This is slightly behind the 73 per cent achieved at the same point in 2011, when applications were accelerated as students looked to enter university prior to the tuition fee increases, but in line with the 71 per cent achieved at the same point in 2010.

In June, the fund received a GBP12.5m payment from Landsbanki, representing the first instalment of repayment of the GBP30m deposit it placed with the bank in 2008. The fund provided for the full amount of the deposit in 2008 and, therefore, the recovery added to the growth in NAV by 2.0 per cent in the quarter. Unite’s share of the recovery is GBP2.6m.

The fund’s status as a priority creditor is now unencumbered, meaning further payments will be received over time as Landsbanki continues to liquidate its assets. The winding-up board of Landsbanki has estimated that 100 per cent of the deposit will be repaid, although has not provided a clear indication of timescales. Due to the inherent uncertainty in the timing of recovery, future receipts will be accounted for when received.

Joe Lister, Unite’s chief financial officer, said: “The fund’s portfolio has delivered further rental uplift, with continued growth anticipated in the third quarter of 2012 as the 2012/13 academic year lettings cycle completes. Recovery of the first tranche of the fund’s Landsbanki deposit during June is a very positive development, adding GBP2.6m to the group’s net asset value and creating acquisition capacity for the fund.”