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Unite Students Extends LSAV JV With GIC By Ten Years - Quick Facts

Student lodging owner and developer Unite Group Plc (UTG.L) announced Tuesday the extension of its joint venture with GIC - London Student Accommodation Joint Venture or LSAV - by ten years to September 2032.

The company also announced an agreement to settle its performance fee from the LSAV in cash during the fourth quarter.

LSAV was established in September 2012 with a ten-year term maturing in September 2022. The latest ten-year extension followed a successful partnership that has delivered strong development returns and growth in rental income.

Both Unite and GIC will retain a 50 percent equity stake in LSAV, which had net assets of 814 million pounds as of December 31, 2020. In this, Unite share was 407 million pounds.

Unite said the performance fee will be paid in cash in the fourth quarter, based on valuations and cashflows to September 30, 2021. Unite's share of the performance fee is expected to be approximately 30 million pounds to 40 million pounds.

Unite will be entitled to receive a performance fee from LSAV equivalent to 12.5 percent of returns in excess of 8 percent per annum in the period from 2021 to 2032.

As part of the extended relationship, Unite and GIC will explore opportunities to expand LSAV, through potential acquisitions of investment assets.

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