Unite seeking £285m for expansion

STUDENT accommodation and nurses' homes operator Unite is going to the City to mortgage its portfolio of properties totalling 10,000 beds. It hopes to raise up to £285m and use the cash to hit a target of operating 60,000 beds by the end of next year.

Unite said it would securitise 47 properties in a bid to pay off debt and release up to £50m in new money to develop the business. That will cut interest on debt and increase the length of maturity of its borrowings. Interest payments more than doubled to £8.3m on debts of £188m in the year to last December, trimming pre-tax profits to £2.9m from £3m.

Chief executive Nick Porter said of the securitisation: 'The important things are that this is a repeatable model and that over 50% of the stock in the securitisation is AAA-rated with the credit agencies.'

Unite is also issuing 5.7m new shares at 286 1/2p to buy charitable trust Peabody out of its 50-50 joint venture providing accommodation for 1,500 students and NHS workers in London. Including debt, the deal values Peabody's 50% interest at £19.9m.

Unite lifted its total dividend by more than a fifth to 2.5p a share. The shares, down a third in the past eight months, rose 35p to 323 1/2p.