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Unite Students sells £342m London assets to its JV with GIC

Student housing specialist Unite Students has sold two of its London assets to the London Student Accommodation joint venture that it has with Singapore’s sovereign wealth fund GIC for £342 million.

The properties in Wembley and Whitechapel have a combined 1,358 bed spaces. Arch View House, in Wembley, was completed in time for the 2020-2021 academic year under a forward fund contract. The Whitechapel property is less than ten years old.

The two properties had a gross asset value of £338 million at end-December 2020, with values based on stabilised net operating income of £14.2 million for the 2020-2021 academic year.

The deal means LSAV now has gross property assets worth £1,677 million and net assets of £1,041 million on a pro forma basis.

LSAV will fund the acquisition through £208 million of equity from Unite and GIC and a £140 million eight-year loan facility provided by Barings on behalf of two institutional investors. Unite Students will use the net disposal proceeds to repay group debt ahead of reinvestment into the development pipeline.

“The transaction means we have now delivered over £260 million of disposals in the year to date on a Unite share basis. This provides us with significant capacity to reinvest in our development pipeline, including opportunities in London,” said Unite Students chief executive Richard Smith.