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Unite fund enjoys rental boost as valuation hits £2.1bn

By Kasmira Jefford - Monday, October 09, 2017 9:31

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Unite Students' UK Student Accommodation Fund (USAF) and London Student Accommodation Joint Venture (LSAV) both jumped by 1.6% in value in the third quarter of the year, driven by rental growth across their portfolios.

USAF, in which Unite holds a 23% stake, comprises 69 properties across 23 UK University towns and cities. It was valued at £2.14bn as at 30 September.

At 30 September 2017, USAF's property portfolio was independently valued at £2,137 million representing a like-for-like increase of 1.6% during the quarter. 

LSAV, a 50:50 joint venture with the Government of Singapore Investment Corporation Real Estate, is now worth £1.1bn.The venture owns portfolio comprises 8,477 beds across 13 properties in London and Aston Student Village in Birmingham.

Rental growth and 7 basis points of yield compression helped boost both USAF and LSAV in the quarter. The overall USAF portfolio is now valued at an average yield of 5.5% and LSAV's portfolio at 4.9%.

Joe Lister, Unite Students chief financial officer, said: "The lettings performance for the 2017/18 academic year has been very strong with occupancy at 99% and full year rental growth at the mid to upper end of our 3.0% - 3.5% forecast.

"Contracts with university partners guaranteeing income and rental growth now underpin 60% of the portfolio providing a high level of certainty over future income and demonstrating the strength of our relationships with high to mid-ranking universities. Demand from direct let bookings remains strong due to our high quality portfolio and market-leading service platform."

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