Slide 1: The UK's leading developer and manager of student accommodation
The UK’s leading developer and manager of student accommodation Interim Results Six months ended 30 June 2012
Slide 2: Highlights
HIGHLIGHTS Strong financial performance 30 Jun 30 Jun 31 Dec - NPC doubled to £14.4m 2012 2011 2011 - Adjusted NAV per share up 5.3% Net Portfolio Contribution £14.4m £7.2m £11.0m - Strong operational cashflow Adjusted EPS 9.0p 3.1p 2.6p - Interim dividend doubled to 1.0pps Financial position st
Slide 3: Strategy and Market
The heart of student living LUND)
Slide 4: Rent and Occupancy Outlook
RENT AND OCCUPANCY OUTLOOK UCAS Full Year Applicants 2004-2012 Demand outlook - Over 160,000 more University applicants than places - School leaver demand resilient (decrease of only 2.6% per UCAS June 2012 update) - International demand increasing - 15,000 fewer funded places for 2012/13 (c.1% of
Slide 5: Yield Outlook
YIELD OUTLOOK Average yields stable at 6.6% UNITE vs IPD All Property Initial Yield - Flat overall since late 2009 8.0% - Fluctuations at asset/city level 7.5% 7.0% 6.5% Transaction volumes healthy 6.0% 5.5% - £800m transactions in H1 5.0% 4.5% - Likely increase in volumes in H2 4.0% 3.5% Inve
Slide 6: Strategy
STRATEGY Target low double-digit total returns, with modest risk Development Capital growth Income growth London focus London focus Rental growth Mix of product, price Quality portfolio and Operating efficiencies point and location universities New openings 9% yield on cost target
Slide 7: Financial Review
The heart of Student living |LUMWUD FINANCIAL REVIEW ew
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS 6 months to 6 months to 12 month to Jun 2012 Jun 2011 Dec 2011 Income Statement Net portfolio contribution £14.4m £7.2m £11.0m Adjusted EPS (pre UMS for 2011) 9.0p 3.1p 2.6p Balance Sheet NAV (adjusted, fully diluted per share) 335p 310p 318p See-through LTV 54% 54% 54% Adjusted
Slide 9: Adjusted NAV Bridge
ADJUSTED NAV BRIDGE Pence per share 1 3 7 335 12 325 335 315 318 305 295 285 275 31 Dec 2011 31‐Dec‐11 RentalGrowth Rental growth Retained profit Retained profit Development Development Swap Swapclose outs close outs 30‐Jun‐12 30 Jun 2012 Rental growth of 1.8% on completed portfolio - USV acquisit
Slide 10: Net Portfolio Contribution
NET PORTFOLIO CONTRIBUTION NPC doubled in period to £14.4m Jun Jun Dec % - 99% occupancy in H1 2012 2011 2011 change £m £m £m - Rental growth of 3.1% for 2011/12 - 236 net new beds following 2012 Total income 124.1 112.5 219.5 10% openings and disposals UNITE share of rental 56.7 48.9 95.6 10% inc
Slide 11: Income Statement
INCOME STATEMENT Jun 2012 Jun 2011 Dec 2011 £m £m £m Net Portfolio Contribution 14.4 7.2 11.0 Development pre-contract costs (1.3) (1.6) (3.3) Landsbanki, restructuring and other costs 1.3 (0.6) (3.6) EPRA adjusted profit (pre UMS for 2011) 14.4 5.0 4.1 UMS - (2.3) (21.0) Valuation movement and prof
Slide 12: See Through Balance Sheet and Income Statement
SEE THROUGH BALANCE SHEET AND INCOME STATEMENT Wholly owned USAF / JVs UNITE UNITE (UNITE share) see through see through Jun 12 Dec 11 £m £m £m £m Balance sheet Rental Properties 673 368 1,041 1,017 Properties under development 228 - 228 189 Total property portfolio 901 368 1,269 1,206 Net debt (501
Slide 13: Capital Structure
CAPITAL STRUCTURE Key debt statistics Good progress with debt financing Jun 12 Jun 11 Dec 11 - £121m 10 year L+G facility completed Net debt £501m £391m £434m - £169m of other Group facilities See through LTV 54% 54% 54% arranged/extended Debt maturities being effectively Adjusted gearing 92% 78
Slide 14: Asset Disposals
ASSET DISPOSALS Proceeds Book value £m £m Completed / exchanged Wholly owned 45.2 46.1 USAF 21.0 21.0 UCC 28.6 26.9 94.2 94.0 Under offer Wholly owned 35.0 33.0 129.8 127.0 On track for £100m to £150m sales by December 2012 USAF capacity for c.£25m acquisition from UNITE Ongoing Asset Manageme
Slide 15: Co-investment Vehicles
CO-INVESTMENT VEHICLES USAF: established track record, size, 30 June 2012 diversification USAF UCC OCB £m £m £m - 8.5% total return in H1, top of IPD benchmark over 1 and 5 years GAV (£m) 1,270 377 190 Borrowing / others (£m) (554) (221) (110) - £21m of asset disposals Adjusted NAV (£m) 716 156 80
Slide 16: Operational Review
OPERATIONAL REVIEW
Slide 17: Operations
OPERATIONS Customer service focus remains critical - Students and Universities more demanding consumers - Asset and service quality paramount - Deepening University relationships Portfolio refurbishment programme continuing - £0.5m capex in period delivering £1.5m NAV uplift (UNITE share) - In a
Slide 18: Development Pipeline
DEVELOPMENT PIPELINE Number Total Total Capex in Capex Forecast Forecast Typical of beds completed development period remaining NAV yield on weekly value cost remaining cost cluster rent £m £m £m £m £m £ 2012 London Waterloo Road 146 22 16 4 1 2 9.0% 225 Moonraker Point 674 112 75 13 2 3 9.5% 233 No
Slide 19: Summary and Outlook
SUMMARY AND OUTLOOK Strong financial and operating performance - Growth in NAV, earnings and cash flow - Interim dividend increased to 1.0pps Financial position strengthened - Asset disposal programme on track - Debt facilities extended and diversified Accretive development activity continues
Slide 20: Appendices
APPENDICES
Slide 21: UK Student Accommodation Market
UK STUDENT ACCOMMODATION MARKET Full time student numbers growth Student numbers have doubled since 1991 - Driven by government policy, demographics, global mobility - >160,000 more applicants than places for 2012/13 - Variations at city/university level UK attractive to global students - 47% of
Slide 22: Product and Service Offering
PRODUCT AND SERVICE OFFERING All-inclusive pricing - All utilities and services - Internet connection (all properties) and wi-fi (some properties) - 24/7 operations - Transparency and certainty City centre locations - Close to university campuses - Flat-shares and studios - Range of products and
Slide 23: Phases of Growth
PHASES OF GROWTH 2000 - 2006 : First mover advantage - Rapid national expansion - Development led - High quality sites secured - Financial and operational stretch 2006 - 2009 : Operational and financial consolidation - Co-investment model established to diversify capital base - Operational chang
Slide 24: See-through Balance Sheet and Income Statement
SEE-THROUGH BALANCE SHEET AND INCOME STATEMENT Group USAF UCC USV OCB Total £m £m £m £m £m £m Balance sheet at 30 June 2012 Rental Properties 672 207 113 - 48 1,040 Properties under development 228 - - - - 228 Net debt (500) (87) (69) - (26) (682) Other assets/(liabilities) (41) (2) 3 - 2 (42) Net A
Slide 25: Our Top Markets
OUR TOP 10 MARKETS 2012 2011 City Completed Completed FT Student Projected Rank Rank Beds Beds Numbers Market (12/13) (11/12) (10/11) Share 1 1 London 7,714 6,729 289,925 2.7% 2 2 Sheffield 3,731 3,731 48,107 7.8% 3 3 Liverpool 3,372 3,372 41,795 8.1% 4 4 Leeds 3,138 3,138 51,025 6.1% 5 5 Bristol 2,
Slide 26: The London Student Market
THE LONDON STUDENT MARKET Proportion of International Students HESA 10/11 – All Students London has three important characteristics that distinguish it from the wider UK market - A full time student population (294,000) that is larger than the next five largest student markets combined - A very lo
Slide 27: Debt Facilities
DEBT FACILITIES On-balance sheet Co-investment vehicles USAF Facility £m Drawn £m Maturity Facility Drawn Maturity Amount HSH / Abbey 106 106 2013 Investment £m £m CMBS 280 280 2014 Legal + General 121 121 2022 Santander 63 50 2015 Nationwide 100 22 2014 HSBC 75 62 2015 HSH / NAB 90 90 2014 Lloyds 1
Slide 28: Co-investment Vehicles – Key Terms
CO-INVESTMENT VEHICLES – KEY TERMS USAF UCC OCB JV History: Multi investor fund formed JV with GIC formed March 05 JV with OCB formed August 09 Dec 06 Strategy: UK direct let student London & Edinburgh focus Build and operate 3 London accommodation Build a £350m+ portfolio assets Exclusivi
Slide 29: NNNAV
NNNAV Jun 2012 Jun 2011 Dec 2010 £m £m £m Net assets 419 404 388 Valuation gains not recognised on properties 83 48 76 held at cost Fair value of fixed rate debt (8) (5) (5) Deferred tax - - - NNNAssets 494 447 459 NNNAV per share 308pps 279pps 286pps 28