Slide 1: Delivering Earnings Growth
Delivering Earnings Growth Interim Results Six months ended 30 June 2016
Slide 2: Continued Strong Performance
CONTINUED STRONG PERFORMANCE Strong financial performance 30 Jun 30 Jun 31 Dec - EPRA earnings up 22% to £36.1 million 2016 2015 2015 - NAV up 7% to 620p - LTV maintained at 35% EPRA Earnings £36.1m £29.6m £61.3m - Interim dividend increased 9% to 6.0 pence Excellent progress with strategic obje
Slide 3: Strategy and Market
UNITE STUDENTS . STRATEGY AND MARKET 2 —— a
Slide 4: Student Number Growth Exceeds New Supply
STUDENT NUMBER GROWTH EXCEEDS NEW SUPPLY Student numbers continue to grow Total students Full-time students Student intake - 2015/16 intake highest ever 1,900,000 800,000 700,000 - Universities focused on student recruitment 1,850,000 600,000 in more competitive environment 1,800,000 500,000 1,750
Slide 5: Consistent Strategy Leaves Us Well Placed
CONSISTENT STRATEGY LEAVES US WELL PLACED Portfolio and pipeline aligned with Universities with University rankings strongest growth prospects % of Unite income 45% - 82% aligned to high and mid-tariff institutions – 40% up from 78% 35% 30% University partnerships underpin income and 25% 2015/16
Slide 6: Financial Review
Angel Lane, London FINANCIAL REVIEW
Slide 7: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE 30 Jun 2016 30 Jun 2015 31 Dec 2015 Income EPRA earnings £36.1m £29.6m £61.3m Adjusted EPRA EPS 16.3p 14.2p 23.1p Dividend per share (interim/full year) 6.0p 5.5p 15.5p Balance sheet EPRA NAVps 620p 521p 579p Total accounting return 8.7% 22.1% 36.7% See-through LTV 35% 3
Slide 8: Earnings Growth Momentum Maintained
EARNINGS GROWTH MOMENTUM MAINTAINED Continuing improved performance 30 Jun 30 Jun 31 Dec 2016 2015 2015 £m £m £m - High occupancy, rental growth and portfolio growth Total income 167.5 144.3 277.9 - Adjusted EPRA earnings up £6.5 million to Unite’s share of rental income 86.9 77.0 144.3 £36.1 mill
Slide 9: Highly Visible Earnings Growth Progression
HIGHLY VISIBLE EARNINGS GROWTH PROGRESSION Earnings growth prospects supported by: Earnings growth will drive further dividend - High-quality development programme growth - Positive rental growth outlook - Policy to pay out 65% of adjusted EPS - Pay-out ratio to increase to 75% with REIT Dispo
Slide 10: Balanced Returns
BALANCED RETURNS NAV Pence per share 640 630 9 620 15 610 9 600 12 590 13 620 580 570 579 560 550 31 Dec 15 Rental Yield Development Retained Dividend 30 Jun 16 growth compression portfolio profits 9
Slide 11: Strong Capital Structure
STRONG CAPITAL STRUCTURE Strong debt position Key debt statistics (see-through) 30 Jun 30 Jun 31 Dec - Diversified sources and balanced maturity 2016 2015 2015 profile Net debt £827m £646m £731m - Limited refinancing requirements before 2020 LTV 35%* 35% 35% Cost of debt 4.4% 4.7% 4.5% Opportuni
Slide 12: Co-investment Vehicles Performing Well
CO-INVESTMENT VEHICLES PERFORMING WELL Strong performance across USAF and LSAV Summary financials USAF LSAV £m £m USAF has £90 million capacity for acquisitions GAV 2,149 970 - Acquired 2 forward fund opportunities in Net debt (615) (343) Edinburgh and Oxford, adding 400 beds in 2017 Other asset
Slide 13: On Track for REIT Conversion in 2017
ON TRACK FOR REIT CONVERSION IN 2017 Higher earnings and lower leverage supports Woburn Place, London REIT conversion Majority of historic tax losses will be utilised by end 2016 Currently meeting key REIT requirements - Dividend pay-out levels - Gearing levels - Developing assets for investme
Slide 14: Property Review
Dorset House, Oxford PROPERTY REVIEW
Slide 15: Investor Demand Remains Strong
INVESTOR DEMAND REMAINS STRONG Continued investor appetite in H1 2016 Yield and swap analysis Yield - £1.4 billion traded 10.0% 9.0% - Majority of buyers are long-term investors 8.0% 7.0% - No sign of excessive leverage 6.0% 5.0% - Encouraging signs post referendum 4.0% 3.0% 2.0% Defensive secto
Slide 16: Development Programme Progressing Well
DEVELOPMENT PROGRAMME PROGRESSING WELL Highly accretive secured pipeline Target Secured Total completed Total development Forecast yield delivery beds value costs on cost - 2016 projects on track (£m) (£m) Regional wholly owned - 2017 pipeline secured, on site under Greetham Street, Portsmouth 201
Slide 17: Operational Review
Sugarhouse Close, Edinburgh OPERATIONAL REVIEW
Slide 18: Increasing Our Brand Value
INCREASING OUR BRAND VALUE PRISM delivering planned benefits Occupancy and rental growth Occupancy Rental growth - Enhanced service to students 96.0% 98.0% 99.0% 99.0% 97.5% 100.0% 4.0% • 75% of maintenance jobs fixed within 24 hours 3.5% • 30% of bookings online – increased mobile bookings 3.0% 2
Slide 19: Continued Momentum and Positive Outlook
CONTINUED MOMENTUM AND POSITIVE OUTLOOK Strong performance on all fronts Occupancy and rental growth Occupancy Rental growth Continuing to deliver on consistent, focused strategy 100.0% 96.0% 98.0% 99.0% 99.0% 97.5% 4.0% 3.5% - To be the most trusted brand in our sector 3.0% 2.5% - To maintain t
Slide 20: Appendices
UNITE STUDENTS APPENDICES
Slide 21: UK Student Accommodation Market
UK STUDENT ACCOMMODATION MARKET Full-time student numbers Student numbers have more than doubled since 1991 - Driven by government policy, demographics, global mobility - 180,000 more applicants than places in 2015/16 Government removed cap on UK / EU student numbers from 2015/16 - 92,000 increa
Slide 22: Product and Service Offering
PRODUCT AND SERVICE OFFERING All-inclusive pricing The Forge, Sheffield - 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
Slide 23: Our Top 10 Markets
OUR TOP 10 MARKETS 2016 City Completed FT student Market rank beds numbers Share (FY16) (14/15) 1 London 10,128 279,160 3.6% 2 Sheffield 3,731 48,815 7.6% 3 Bristol 3,479 40,275 8.6% 4 Leeds 3,458 50,700 6.8% 5 Liverpool 3,398 43,160 7.9% 6 Birmingham 2,688 58,980 4.6% 7 Glasgow 2,396 55,115 4.3% 8
Slide 24: 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 Jun 2016 Dec 2015 £m £m £m £m £m Balance sheet Rental Properties 1,062 490 379 1,931 1,835 Properties under development 222 4 106 332 230 Total property portfolio/GAV
Slide 25: Portfolio Analysis
PORTFOLIO ANALYSIS 30 June 2016 Wholly USAF LSAV Lease Total Unite owned London Value (£m) 341 713 420 1,475 855 London Beds 2,014 4,300 1,993 260 8,567 44% Major provincial Value (£m) 1,527 44 450 2,021 821 Major provincial Beds 20,060 331 6,264 1,828 28,483 43% Provincial Value (£m) 273 - 192 465
Slide 26: NNNAV
NNNAV Jun 2016 Jun 2015 Dec 2015 £m £m £m IFRS net assets 1,344 1,144 1,275 Mark to market on fixed rate debt (10) (29) (28) Convertible bond 84 - 83 EPRA NNNAV 1,418 1,115 1,330 EPRA NNNAV per share 589pps 499pps 552pps 25
Slide 27: Debt Facilities
DEBT FACILITIES On-balance sheet Co-investment vehicles Facility Drawn Maturity Facility Drawn Maturity £m £m £m £m HSBC/RBS 180 105 2020 USAF Legal + General 117 117 2022 Secured bond 690 690 2023/25 Mass Mutual 124 124 2024 LSAV/UCC Others 8 8 2018-22 UOB 25 25 2017 Unsecured HSBC 135 102 2018 Con
Slide 28: 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 Greetham Street, Portsmouth 2016 836 65 42 8 2 13 9.3% Causewayend, Aberd