UK student accommodation operator, Unite, revealed today it is on course to raise up to £150 million (164 million; $248 million) for its flagship fund.
The company said it had already received £133 million from major third party institutions as it enters the final stages of raising equity to expand the £877 million portfolio of the UNITE UK Student Accommodation Fund.
Apart from binding subscriptions, the fund has also got applications for capital commitments totaling a further £23 million, which are anticipated to be formalised within the next week.
A substantial proportion of commitments have come from institutions who were not previously invested in the fund, added Unite. The new units will be issued at a 6.7 percent premium to the last reported net asset value as at 30 September 2009.
Part of the new equity raised will be used to buy a portfolio of assets from UNITE for approximately £100 million later this month.
Unite plans to co-invest in the equity raise pro-rata to its current holding of 18.6 percent of the units up to a maximum of £18.6 million.
Future plans include further acquisitions from UNITE and refurbishments of certain properties within the fund’s existing portfolio, as well as purchases from other owners.
The fund has a debt pile of £481 against assets valued at £877 million.
Mark Allan, chief executive at UNITE, said the success of this fundraising underlined the ongoing growth in appetite for student accommodation as an asset class. He said performance of the fund had been resilient.