UNITE buys up rest of joint venture for £6.2m

FTSE 250 student accommodation developer and manager UNITE Group has completed the acquisition of the the remaining 49% interest in the UNITE Student Village (USV) joint venture for £6.2m in cash, following its establishment back in 2004.

However, the transaction amount will not need to be paid until October and, taking into account the additional income receivable by UNITE between completion ad payment, the amount payable by the firm will be £5.3m.

"The purchase enables UNITE to take full control of USV and its underlying assets and represents an important step toward simplifying the group's balance sheet," the statement read.

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USV has one remaining asset, a 1,381-bed development in Sheffield city centre named 'the Forge' valued at £58.4m at June 30th 2011.

In acquiring the rest of USV, UNITE expects to add £2.4m of net asset value in 2012, increasing the net portfolio contribution by around £1m.

According to UNITE's Chief Financial Officer Joe Lister, "the Forge has shown strong operational performance and is a key asset within the Sheffield market, and taking our ownership to 100% is consistent with our aim to simplify our balance sheet."

Meanwhile, UNITE has signed a new £38m five-year facility with HSBC, after the existing senior debt in USV (totalling £45m) was due to mature in 2012. The all-in cost, including the underlying five-year swap rate is around 5%.