Slide 1: The UK's leading developer and manager of student accommodation
The UK’s leading developer and manager of student accommodation Preliminary Results Year ended 31 December 2012
Slide 2: Highlights
HIGHLIGHTS Strong financial performance 31 Dec 31 Dec - 11.3% total return 2012 2011 - NPC up 74% to £19.1m Net Portfolio Contribution £19.1m £11.0m - NAV per share up 10% to 350pps Adjusted EPS 9.9p 2.6p - Final dividend increased to 3.0pps Portfolio quality enhanced further Adjusted NAV per sh
Slide 3: Strategy and Market
STRATEGY AND MARKET
Slide 4: Rent and Occupancy Outlook
RENT AND OCCUPANCY OUTLOOK UCAS applicants as at 15 Jan deadline Positive Government policy announcements support strong recovery in intake for 2013/14 - More flexible admissions process - Deferrals returning to normalised levels Increase in applications illustrates underlying demand - 3.5% up y
Slide 5: Yield Outlook
YIELD OUTLOOK Average yields stable at 6.6% Indicative stabilised yields Asset type Lease type NI yield range Trend - Flat overall since late 2009 London lease/noms* 5.35 – 5.6% stronger - Yield range widening (now 200 bps) direct let 6.0 – 6.25% stable Liquidity continues to improve Major provi
Slide 6: Consistent Strategy
CONSISTENT STRATEGY Target low double-digit total returns on NAV, with modest risk Development Capital growth Income growth London focus Focus on London and Rental growth Mix of product, price stronger Universities New openings point and location 50/50 London/regions split Operating ef
Slide 7: Financial Review
FINANCIAL REVIEW
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS 2012 2011 Movement Income Net Portfolio Contribution £19.1m £11.0m +74% Adjusted EPS (pre UMS for 2011) 9.9p 2.6p +280% Adjusted EPS yield on NAV 3.1% 0.9% +244% Dividend per share – full year 4.0p 1.75p +128% Balance Sheet NAV (adjusted, fully diluted per share) 350p 318p +10%
Slide 9: Adjusted NAV Bridge – Balanced Returns
ADJUSTED NAV BRIDGE – BALANCED RETURNS Pence per share 370 360 (2) 13 11 350 (7) 350 340 17 330 320 310 318 300 31-Dec-11 Rental growth Development Swap close outs Retained profit Dividend 31-Dec-12 Rental growth of 3% on completed portfolio Development profits: 40% of return, 12% of capital S
Slide 10: Net Portfolio Contribution and Adjusted Earnings
NET PORTFOLIO CONTRIBUTION AND ADJUSTED EARNINGS NPC up 74% to £19.1m 2012 2011 - 90% cash conversion £m £m - LFL rental growth of 3% Total income 240.2 219.5 - New openings UNITE share of rental income 111.4 95.6 - Cost efficiencies UNITE share of operating costs (32.3) (29.4) NOI margin increa
Slide 11: 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 Dec 12 Dec 11 £m £m £m £m Balance sheet Rental Properties 763 399 1,162 1,017 Properties under development 83 - 83 189 Total property portfolio 846 399 1,245 1,206 Net debt (453)
Slide 12: Capital Structure
CAPITAL STRUCTURE Key debt statistics Debt diversity, maturity and cost profile 2012 2011 improved Net debt: - 43% of debt from non-bank sources Balance sheet £453m £434m - WALM extended to 4.9 years See-through £648m £646m - Average cost reduced to 5.5% See through LTV 52% 54% - 16% unsecured Ave
Slide 13: Asset Disposals
ASSET DISPOSALS 2012 2011 Proceeds Book value Proceeds Book value £m £m £m £m Open market transactions Completed / exchanged Wholly owned 71 73 7 6 USAF 21 21 - - UCC 21 19 8 7 Total 113 113 15 13 Asset sales to JV Partners 77 77 - - Total 190 190 15 13 Average yield 6.4% 6.4% 6.4% 6.4% Disposal a
Slide 14: Co-investment Vehicles
CO-INVESTMENT VEHICLES USAF stake remains core due to quality Summary financials and diversification of portfolio and fee USAF UCC LSAV OCB £m stream £m £m £m - £14m Landsbanki recovery in year GAV 1,320 381 50 175 Borrowing / others (595) (223) (24) (109) - Refinancing of CMBS targeted in 2013 Ad
Slide 15: Operational Review
The heart of student living |UMWUD b
Slide 16: Operations
OPERATIONS Service and efficiency enhanced in 2012 - NOI margin increased to 71% from 69% - Overheads less fees as % GAV reduced to 92bps (2011: 95bps) - Annualisation benefits to flow through in 2013 - Balance of standardisation and flexibility key Clear strategic targets established for 2015 -
Slide 17: 2012 Development Completions
2012 DEVELOPMENT COMPLETIONS Beds Completed Total Total NAV Profit on Yield on Occupancy Average value development uplift cost cost weekly cost rent £m £m £m % % £ London Waterloo Road 146 22 15 7 47% 9.5% 100% 225 Moonraker Point 674 110 76 34 45% 9.0% 100% 205 North Lodge 528 46 30 16 53% 11.2% 97
Slide 18: Development Outlook
DEVELOPMENT OUTLOOK Development pipeline Beds Completed TDC Capex in Capex NAV Yield on value £m period remaining remaining cost £m £m £m £m Wholly owned London St Pancras Way, Camden (2014) 563 82 59 6 43 12 9.5% Stratford City, Stratford (2014) 951 83 62 30 27 6 9.1% 1,514 165 121 36 70 18 9.3% Re
Slide 19: Summary and Outlook
SUMMARY AND OUTLOOK Strong financial and operating performance - 11.3% total return - 3.1% EPS yield on NAV - Growth in earnings, NAV and dividend Portfolio quality and capital structure improved further - GIC JVs extended and expanded - Debt diversity, maturity and cost profiles enhanced - Lond
Slide 20: Appendices
The heart of student living
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 - >188,000 more applicants than places for 2012/13 - Variations at city/university level UK attractive to global students Supply B
Slide 22: Product and Service Offering
PRODUCT AND SERVICE OFFERING All-inclusive pricing - All utilities and services - Wi-Fi across our portfolio for September 2013 - 24/7 customer service - Transparency and certainty City centre locations - Close to university campuses - Flat-shares and studios - Range of products and price points
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 LSAV OCB Total £m £m £m £m £m £m Balance sheet at 31 Dec 2012 Rental Properties 763 217 114 25 43 1,162 Properties under development 83 - - - - 83 Net debt (453) (94) (64) (11) (26) (648) Other assets/(liabilities) (23) (3) (3) (1) - (30)
Slide 25: Our Top Markets
OUR TOP 10 MARKETS 2013 2012 City Completed Completed FT Student Projected Rank Rank Beds Beds Numbers Market (13/14) (12/13) (11/12) Share 1 1 London 7,712 8,074 292,734 2.8% 2 2 Sheffield 3,731 3,731 48,632 7.7% 3 3 Liverpool 3,372 3,372 42,911 7.9% 4 4 Leeds 3,138 3,138 53,402 5.9% 5 5 Bristol 2,
Slide 26: The London Student Market
THE LONDON STUDENT MARKET Proportion of International Students HESA 11/12 – 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 105 105 2013 Investment £m £m CMBS 280 280 2014 Legal + General 121 121 2022 Santander 63 50 2015 Nationwide 100 22 2014 HSBC 75 75 2015 Unsecured retail bond 90 90 2
Slide 28: Co-investment Vehicles – Key Terms
CO-INVESTMENT VEHICLES – KEY TERMS USAF UCC LSAV OCB JV History: Multi investor fund JV with GIC formed JV with GIC formed Sept JV with OCB formed formed Dec 06 March 05 12 August 09 Strategy: UK direct let student London & Edinburgh London focus Build and operate 3 accommodation focus Buil
Slide 29: NNNAV
NNNAV Dec 2012 Dec 2011 Dec 2010 £m £m £m Net assets 516 388 387 Valuation gains not recognised on properties 19 76 37 held at cost Fair value of fixed rate debt (12) (5) (6) Deferred tax - - - NNNAssets 523 459 418 NNNAV per share 326pps 286pps 261pps 29