(Alliance News) - Unite Group PLC on Friday reported the acquisition of a new 800-bed development site in Paddington, central London, on a subject to planning basis.
The Bristol, England-based company, which provides purpose built student accommodation said it has exchanged contracts to acquire a new site from Travis Perkins PLC, with total development costs estimated to be GBP150 million, to be funded from the proceeds of its recent equity issue.
The scheme is targeted for delivery for the 2023/24 academic year, subject to planning approval, Unite Group said.
No financial details of the deal were disclosed.
Turning to 2020/21 check-ins, the company said it has let 88% of bed spaces across the whole portfolio for the 2020/21 academic year, down from 98% a year prior. Checked-in occupancy has increased to 80% from 70% on October 8.
Unite Group said its check-in performance and rent collection to date for 2020/21 is expected to result in a reduction in rental income of up to 20% compared to the prior year, up from previously seen reduction of between 10% and 20%.
"This is a rare opportunity to acquire a zone 1 central London site in an excellent location, which will help to meet the growing accommodation needs of our London-based University partners," said Chief Executive Richard Smith.
"We remain confident in the growth outlook for London over the next decade, reflecting the global reputation of its Universities and a positive outlook for growth in UK and international student numbers," added Smith.
Unite Group shares were trading 0.1% lower in London on Friday at 1,070.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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