Unite plans landbuying spree for £300m of student homes

Listed student housing provider Unite Group is planning a massive expansion of its development programme by buying land for 3,000 student flats in the next 12 months.

Simpson: Looking for a “much, much larger development pipeline”

Richard Simpson, the firm’s development managing director, said the firm, which uses contractors including Mansell, Shepherd, Carillion, RG Group, Stewart Milne and Woolf, was looking to get a “much, much larger development pipeline”.

He said Unite had £120m to spend on between 12 and 16 sites, which would have a development value of about £300m.

The firm raised £82 million in September of this year to fund new developments. It is also expecting to sell completed homes into the property investment fund it manages, the UNITE UK Student Accommodation Fund, which is itself currently in the process itself of raising £150m. In addition, Simpson said it had £200m of debt financing to help pay for the programme.

Simpson said the organisation would be focusing on identifying well-located sites in London and the South-east. He said: “We’re looking to secure these sites between now and November next year.”

The move by Unite follows equity-raising efforts by a number of the major housebuilders. However, it is unclear how many sites have actually been purchased, with sellers unwilling to part with assets at rock-bottom prices. Berkeley Group is one of the few to go public, saying this month it had bought 12 sites in the past six months, containing a total of 1,800 plots.

Unite manages 38,000 student homes across 199 properties, with another 2,700 bed spaces due to be opened this year.

Liam Bailey, head of residential research at estate agent Knight Frank, said the move by Unite was a significant one in the current market.

He said: “This is yet another move, following the action by the housebuilders, that shows the land market is active where it was dead a year ago. However, the problem is that there’s quite a bit of competition for the land that’s out there as vendors are holding out for prices to improve.”