Student accommodation specialist Unite Group has sold its entire 2010 pipeline of developments under construction into a 25:75 joint venture with Bahrain's Oasis Capital Bank.
Three London projects with a total of 1,119 beds have been sold into the joint venture for a total of £88.2m along with the existing banking facilities relating to each property. A further £69m needs to be spent to complete construction, meaning Unite will record a loss on disposal of £0.4m.
Unite shares rose 5 per cent on the day of the announcement due to the favourable impact the deal will have on Unite's balance sheet, reducing net debt by £75m and releasing £21m of cash. Unite will also earn 5 per cent of build costs as a development management fee, and ongoing asset management fees on completion.
