Slide 1: Delivering Earnings Growth
Greetham Street, Portsmouth Delivering Earnings Growth Preliminary Results Year ended 31 December 2016
Slide 2: Continuing Strong Performance
CONTINUING STRONG PERFORMANCE Strong financial performance - Adjusted EPRA earnings up 24% to £61.3 million 2016 2015 - NAV up 12% to 646p - LTV maintained at 34% Adjusted EPRA earnings £61.3m £49.5m - Full year dividend increased 20% to 18.0 pence Excellent progress with strategic objectives Ad
Slide 3: Strategy and Market
STRATEGY AND MARKET
Slide 4: Structural Growth Underpins Investment Case
STRUCTURAL GROWTH UNDERPINS INVESTMENT CASE UK Higher Education is world class UK Universities world University rankings - Top Universities consistently ranked in global and 18 40 16 European top tier 35 Number of institutions (bars) Number of institutions (lines) 14 30 - UK is second most popular
Slide 5: Unite Uniquely Positioned to Succeed
UNITE UNIQUELY POSITIONED TO SUCCEED Our platform – sector leading operating platform Income by University rankings - PRISM provides flexibility and efficiency 60% - University relationships provide income security, 50% 48% acquisition opportunities and insight 40% 40% 44% 38% 38% 38% - Leading se
Slide 6: Strategy Focused on Earnings and Growth
STRATEGY FOCUSED ON EARNINGS AND GROWTH High levels of earnings and dividend growth Earnings and dividend growth Pence per share % - Annual growth rates of 29% for EPS and 45% 30 40 for DPS since 2012 25 35 30 20 - Earnings growth outlook supports high 25 double-digit dividend growth 15 20 15 10 1
Slide 7: Financial Review
UNITE STUDENTS FINANCIAL REVIEW
Slide 8: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE Year-on-year 2016 2015 movement Income Adjusted EPRA earnings £61.3m £49.5m 24% Adjusted EPRA EPS 27.7p 23.1p 20% EPRA earnings £62.7m £61.3m 2% Adjusted EPS yield on opening NAV 4.8% 5.3% (0.5)% Dividend per share (full year) 18.0p 15.0p 20% Balance Sheet EPRA NAVps 646
Slide 9: Earnings Growth Momentum Maintained
EARNINGS GROWTH MOMENTUM MAINTAINED Continuing to deliver earnings growth 2016 2015 £m £m - High occupancy, rental growth and portfolio growth Total income 304.9 277.9 Unite’s share of rental income 159.1 144.3 - Adjusted EPRA earnings up 24% to £61.3 million Unite’s share of property (42.8) (39.8
Slide 10: Highly Visible Earnings Growth Progression
HIGHLY VISIBLE EARNINGS GROWTH PROGRESSION Earnings growth prospects supported by: Earnings growth will drive further dividend growth - High quality development programme - Policy to pay out 75% of recurring EPS - Positive rental growth outlook - Positive dividend growth outlook Disposals to f
Slide 11: Balanced Returns
BALANCED RETURNS Growing proportion of returns generated internally NAV Pence per share 670 660 8 14 650 640 21 630 620 25 610 600 590 26 580 570 646 560 550 540 579 530 520 510 500 31-Dec-15 Rental Retained Development Yield Dividend 31-Dec-16 growth profits portfolio compression 10
Slide 12: Strong Capital Structure
STRONG CAPITAL STRUCTURE Strong debt position Key debt statistics (see-through) 2016 2015 - Diversified sources and balanced maturity profile Net debt £776m £731m - Limited refinancing requirements before 2020 LTV 34% 35% Cost of debt 4.2% 4.5% Average cost of debt reduced to 4.2% Average debt m
Slide 13: Co-investment Vehicles Performing Well
CO-INVESTMENT VEHICLES PERFORMING WELL Strong performance across USAF and LSAV Summary financials USAF LSAV USAF acquisitions have utilised capacity £m £m - Acquired two forward-fund opportunities in GAV 2,288 1,009 Edinburgh and Oxford, adding 400 beds Net debt (714) (354) in 2017 Other assets/
Slide 14: REIT Conversion Effective from 1 January 2017
REIT CONVERSION EFFECTIVE FROM 1 JANUARY 2017 Higher earnings and lower leverage supports REIT conversion Majority of historic tax losses utilised by end 2016 Currently meeting key REIT requirements - Dividend pay-out levels - Gearing levels Greetham Street, Portsmouth - Developing assets for
Slide 15: Property Review
UNITE STUDENTS PROPERTY REVIEW 7 Sea mee : ay ae
Slide 16: Investor Demand Remains Strong
INVESTOR DEMAND REMAINS STRONG Continued investor appetite in 2016 Yield and swap analysis - Over £3 billion traded in 2016 and £1.2 billion 10.0% 9.0% already in 2017 8.0% 7.0% - Majority of buyers are long-term investors 6.0% 5.0% - No sign of excessive leverage 4.0% 3.0% - Market returned stron
Slide 17: Development Programme Progressing Well
DEVELOPMENT PROGRAMME PROGRESSING WELL Highly accretive secured pipeline Total Total Forecast Target Secured completed development yield delivery beds value costs on cost - 2017 projects on track (£m) (£m) Regional wholly owned - 2018 pipeline secured, on site under St Leonard's, Edinburgh 2017 58
Slide 18: First Major On-Campus Acquisition
FIRST MAJOR ON-CAMPUS ACQUISITION Acquisition of 3,100 beds on Aston University campus for £227 million High quality income stream with high-ranked University - Prospect of nominations agreement - 5% yield growing to 6% Synergy benefits driven by PRISM - Benefits extend across 4,800 beds in Bi
Slide 19: Enhancing Portfolio Quality
ENHANCING PORTFOLIO QUALITY Disposal of 4,175 bed regional portfolio Disposal portfolio City Beds disposed - £295 million; Unite share £102 million in line Liverpool 1,159 with book value Birmingham 909 - Improves exposure to high and mid-ranked Glasgow 753 Universities Aberdeen 360 Edinburgh 332
Slide 20: Summary and Outlook
SUMMARY AND OUTLOOK
Slide 21: Continued Momentum and Positive Outlook
CONTINUED MOMENTUM AND POSITIVE OUTLOOK Strong performance on all fronts Gosford Gate, Coventry Consistent, focused strategy enhanced by on- campus activity - To deliver great customer service for students and Universities - To operate brilliant buildings - To maintain high quality earnings and
Slide 22: Appendices
UNITE STUDENTS APPENDICES
Slide 23: UK Student Accommodation Market
UK STUDENT ACCOMMODATION MARKET Student numbers have more than doubled since 1991 Full-time student numbers - Driven by government policy, demographics, 2,000 1,749 1,710 1,728 1,730 1,771 1,798 global mobility 1,800 1,600 Students (000's) 1,400 - 185,000 more applicants than places in 2016/17 1,2
Slide 24: Market Leading Operating Platform
MARKET LEADING OPERATING PLATFORM Scalable operating platform NOI margin and overheads efficiency 74.0% 120 - Drives customer service 73.1% 73.0% 100 95 72.5% - Drives efficiency 92 72.5% Overheads Efficiency (Bps) 72.0% 80 71.0% 71.4% NOI Margin (%) 71.0% University relationships 61 61 60 70.0%
Slide 25: Product and Service Offering
PRODUCT AND SERVICE OFFERING All-inclusive pricing - All utilities and services - High-speed (50Mbps) Wi-Fi throughout our portfolio - 24/7 customer and support centre - Transparency and certainty - Free communal kitchen and bathroom cleaning City-centre locations - Close to University campuses
Slide 26: Our Top 10 Markets
OUR TOP 10 MARKETS 2016 City Completed FT student Market rank beds numbers Share (FY16) (16/17) 1 London 10,124 292,706 3.5% 2 Birmingham 4,846 57,767 8.4% 3 Sheffield 3,731 51,095 7.3% 4 Bristol 3,479 41,286 8.4% 5 Leeds 3,458 53,185 6.5% 6 Manchester 2,336 65,664 3.6% 7 Liverpool 2,239 46,245 4.8%
Slide 27: See-through Balance Sheet and Income Statement
SEE-THROUGH BALANCE SHEET AND INCOME STATEMENT Wholly USAF LSAV Unite Unite owned (Unite share) (Unite share) see-through see-through 2016 2015 £m £m £m £m £m Balance sheet Rental Properties 1,062 519 504 2,085 1,835 Properties under development 185 7 - 192 230 Total property portfolio/GAV 1,247 526
Slide 28: NNNAV
NNNAV 2016 2015 £m £m IFRS net assets 1,452 1,275 Valuation gains not recognised on properties held at cost - - Mark to market on fixed rate debt (20) (28) Convertible bond 85 83 EPRA NNNAV 1,517 1,330 EPRA NNNAV per share 630pps 552pps 27
Slide 29: Debt Facilities
DEBT FACILITIES On-balance sheet Co-investment vehicles Facility Drawn Maturity Facility Drawn Maturity £m £m £m £m HSBC/RBS 280 35 2020 USAF Wells Fargo 100 76 2021 Legal + General 116 116 2022 Secured bond 690 690 2023-25 Mass Mutual 124 124 2024 790 766 Others 8 8 2022 LSAV/UCC Unsecured UOB 25 2
Slide 30: Secured Development Pipeline
SECURED DEVELOPMENT PIPELINE Total Total Target Secured completed development Capex in Capex Forecast NAV Forecast delivery beds value costs 2016 remaining remaining yield on cost (£m) (£m) (£m) (£m) (£m) Regional wholly owned St Leonard's, Edinburgh 2017 581 64 41 15 13 9 9.5% Millennium Point, Cov