T he UK’s le a ding de ve lope r a nd ma na g e r of stude nt a c c ommoda tion Pre limina ry Re sults Ye a r e nde d 31 De c e mbe r 2012
HIGHL IGHT S � Stro ng fina nc ia l pe rfo rma nc e 31 De c 31 De c - 11.3% to ta l re turn 2012 2011 - NPC up 74% to £19.1m Ne t Po rtfo lio Co ntrib utio n £11.0m £19.1m - NAV pe r sha re up 10% to 350pps Adjuste d E PS 9.9p 2.6p - F ina l divide nd inc re a se d to 3.0pps � Po rtfo lio q ua lity e nha nc e d furthe r Adjuste d NAV pe r sha re 318p 350p - No n c o re a sse t dispo sa l ta rg e t a c hie ve d F ina l divide nd pe r sha re 1.25p 3.0p - 2012 de ve lo pme nts c o mple te d to pla n T o ta l re turn 8.1% 11.3% - L o ndo n we ig hting inc re a se d to 50% (b uilt o ut) � F ina nc ia l po sitio n stre ng the ne d Se e thro ug h L T V 54% 52% - Se e thro ug h L T V re duc e d to 52% Ope ra tio ns c a shflo w £13.8m £17.2m - De b t fa c ilitie s e xte nde d a nd dive rsifie d Re se rva tio ns* 59% 62% � Po sitive o utlo o k - Suppo rtive Go ve rnme nt po lic y mo ve s Se c ure d future 25pps 19pps de ve lo pme nt pro fit - 62% re se rva tio ns fo r 2013/ 14 * Re se rva tio ns a t 5 Ma rc h - 19pps se c ure d future de ve lo pme nt pro fit a nd g o o d pro g re ss with L SAV pipe line - Re nta l g ro wth e xpe c te d in line with re c e nt ye a rs 2
T GY AND MARKE E RAT ST
RE NT AND OCCUPANCY OUT L OOK UCAS a pplic a nts a s a t 15 Ja n de a dline � Po sitive Go ve rnme nt po lic y a nno unc e me nts suppo rt stro ng re c o ve ry in inta ke fo r 2013/ 14 - Mo re fle xib le a dmissio ns pro c e ss - De fe rra ls re turning to no rma lise d le ve ls � I nc re a se in a pplic a tio ns illustra te s unde rlying de ma nd - 3.5% up ye a r o n ye a r (UCAS Ja n 13) - 18-19 ye a r o ld pa rtic ipa tio n a t a ll time hig h - No n-E U a pplic a tio ns up 9.6% - L ike ly to b e >190,000 unpla c e d a pplic a nts UCAS a pplic a tio ns a nd a c c e pta nc e s (188,000 in 2012) � F o re c a st 25,000-30,000 hig he r 2013/ 14 inta ke - Stro ng e r Unive rsitie s b e st pla c e d to b e ne fit � Ne t de ma nd/ supply mo ve me nt o f c .+18,000 - 9,500 ne w b e ds fo r 2013/ 14 � Re nta l g ro wth pro spe c ts in line with re c e nt ye a rs 4
YIE L D OUT L OOK � Ave ra g e yie lds sta b le a t 6.6% I ndic a tive sta b ilise d yie lds Asse t type L e a se type NI yie ld ra ng e T re nd - F la t o ve ra ll sinc e la te 2009 L o ndo n le a se / no ms* 5.35 – 5.6% stro ng e r - Yie ld ra ng e wide ning (no w 200 b ps) d ire c t le t 6.0 – 6.25% sta b le � L iq uidity c o ntinue s to impro ve Ma jo r pro vinc ia l le a se / no ms* 5.85 – 6.1% stro ng e r - £2.7b n tra nsa c tio ns in 2013 dire c t le t 6.5 – 7.0% sta b le � I nve sto r a ppe tite stro ng e st fo r lo ng Unive rsity Pro vinc ia l le a se / no ms* 6.35 – 6.6% sta b le le a se s a nd L o ndo n dire c t le t 7.1 – 7.35% we a ke r - Pro spe c t o f so me yie ld c o mpre ssio n in 2013 * No ms: No mina tio ns a g re e me nts with lo ng -te rm inc o me - We a ke r pro vinc ia l lo c a tio ns like ly to se e g ua ra nte e fro m a Unive rsity so me yie ld e xpa nsio n � UNI T E we ll po sitio ne d Built o ut po rtfo lio b re a kdo wn - L o ndo n we ig hting 50% o n b uilt o ut b a sis Built o ut va lue £m Built o ut % Ce ntra l L o ndo n 352 24% - £205m dispo sa ls sinc e 2H11 suppo rtive o f va lua tio n Zo ne 2 L o ndo n 81 6% Affo rda b le L o ndo n 290 20% L ondon 723 50% Re g io ns 717 50% 1,440 100% 5
CONSIST E NT ST RAT E GY T a rg e t lo w do ub le -dig it to ta l re turns o n NAV, with mo de st risk De ve lo pme nt Ca pita l g ro wth I nc o me g ro wth � L � Re nta l g ro wth o ndo n fo c us � F o c us o n L o ndo n a nd � Mix o f pro duc t, pric e stro ng e r Unive rsitie s � Ne w o pe ning s po int a nd lo c a tio n � 50/ 50 L o ndo n/ re g io ns split � Ope ra ting e ffic ie nc y (ta rg e t � 9% yie ld o n c o st ta rg e t � Bra nde d se rvic e pla tfo rm 75% NOI ma rg in b y 2015) � L SAV a llo ws a c c e le ra tio n � T � Co nsiste nt re nta l g ro wth a rg e t 4.5% E PS yie ld o n NAV o f L o ndo n a c tivity b y 2015 � L e ve ra g e c .50% L T V � I nte re sting o ppo rtunitie s � Divide nd pa yo ut ra tio o f ⅓ e me rg ing in re g io ns NPC, >2.5x c a sh c o ve r 6
W VIE RE INANCIAL F
F INANCIAL HIGHL IGHT S 2012 2011 Move me nt Inc ome Ne t Po rtfo lio Co ntrib utio n £11.0m +74% £19.1m Adjuste d E PS (pre UMS fo r 2011) 2.6p +280% 9.9p Adjuste d E PS yie ld o n NAV 0.9% +244% 3.1% Divide nd pe r sha re – full ye a r 1.75p +128% 4.0p Ba la nc e She e t NAV (a djuste d, fully dilute d pe r sha re ) 318p +10% 350p T o ta l re turn 8.1% +40% 11.3% Se e -thro ug h L T V 54% -2% 52% Ca sh flow Ope ra ting c a shflo w £13.8m +25% £17.2m 8
ADJUST E D NAV BRIDGE – BAL ANCE D RE T URNS Pe nc e pe r sha re 370 360 (2) 11 13 350 (7) 350 340 17 330 320 318 310 300 31-De c -11 Re nta l g ro wth De ve lo pme nt Swa p c lo se o uts Re ta ine d pro fit Divide nd 31-De c -12 � Re nta l g ro wth o f 3% o n c o mple te d po rtfo lio � De ve lo pme nt pro fits: 40% o f re turn, 12% o f c a pita l � Swa p c lo se -o uts a sso c ia te d with L &G fa c ility a nd dispo sa ls � Adjuste d E PS yie ld o f 3.1% 9
NE T PORT F OL IO CONT RIBUT ION AND ADJUST E D E ARNINGS � NPC up 74% to £19.1m 2012 2011 £m - 90% c a sh c o nve rsio n £m - L F L re nta l g ro wth o f 3% T o ta l inc o me 240.2 219.5 - Ne w o pe ning s UNI T E sha re o f re nta l inc o me 111.4 95.6 - Co st e ffic ie nc ie s UNI T E sha re o f o pe ra ting c o sts (32.3) (29.4) � NOI ma rg in inc re a se d to 71% UNI T E ’ s NOI 79.1 66.2 - F urthe r o ppo rtunitie s re ma in, NOI margin 71.0% 69.2% pa rtic ula rly te c hno lo g y F e e s fro m JVs 10.3 10.1 - T a rg e ting 75% NOI ma rg in b y 2015 � Ove rhe a ds le ss fe e s a s % GAV re duc e d Ove rhe a ds (21.8) (21.6) to 92 b ps F ina nc e c o sts¹ (48.5) (43.7) - Annua lise d sa ving s impa c t in 2013 NPC 19.1 11.0 - I nc re a sing o ve rhe a d e ffic ie nc y ta rg e t De ve lo pme nt pre -c o ntra c t c o sts (2.7) (3.3) to 60 b ps fo r 2015 L a ndsb a nki, re struc turing , o the r (0.5) (3.6) � Gre a te r visib ility o f E PS g ro wth E PRA a djuste d profit (pre UMS for 2011) 15.9 4.1 - No n-NPC ite ms simplifie d - T a rg e t 4.5% a djuste d E PS yie ld fo r 2015 Adjuste d E PS 9.9p 2.6p ¹ F ina nc e c o sts inc lude ne t inte re st o f £35.7m a nd le a se pa yme nts o f £12.8m o n sa le a nd le a se b a c k pro pe rtie s 10
SE E T HROUGH BAL ANCE SHE E T AND INCOME ST AT E ME NT Who lly o wne d USAF / JVs UNI T E UNIT E se e thro ugh se e throug h (UNI T E sha re ) De c 11 De c 12 £m £m £m £m Balanc e she e t 1,017 Re nta l Pro pe rtie s 763 399 1,162 189 Pro pe rtie s unde r de ve lo pme nt 83 - 83 T o ta l pro pe rty po rtfo lio 846 399 1,206 1,245 (646) Ne t de b t (453) (195) (648) Othe r a sse ts/ (lia b ilitie s) (23) (7) (46) (30) Adjuste d ne t a sse ts 370 197 567 514 Adjuste d L T V 53% 49% 52% 54% 2011 2012 Inc ome state me nt Ne t o pe ra ting inc o me 54.8 24.3 66.2 79.1 Ove rhe a ds le ss ma na g e me nt fe e s (8.3) (3.2) (11.5) (11.5) F ina nc e c o sts (37.5) (11.0) (43.7) (48.5) Ne t Portfolio Contribution 9.0 10.1 19.1 11.0 11
CAPIT AL ST RUCT URE Ke y de bt sta tistic s � De b t dive rsity, ma turity a nd c o st pro file 2012 2011 impro ve d Ne t de b t: - 43% o f de b t fro m no n-b a nk so urc e s Ba la nc e she e t £453m £434m - WAL M e xte nde d to 4.9 ye a rs Se e -thro ug h £648m £646m - Ave ra g e c o st re duc e d to 5.5% Se e thro ug h L T V 52% 54% - 16% unse c ure d Ave ra g e se e thro ug h c o st o f de b t 5.5% 5.7% � 2013 prio ritie s a re in c o -inve stme nt ve hic le s to a ddre ss 2014 ma turitie s WAL M 4.9 ye a rs 2.6 ye a rs - USAF CMBS re pla c e me nt Pro po rtio n no n-b a nk de b t 43% 26% - UCC re fina nc e De bt ma turity profile - L SAV de ve lo pme nt fina nc e � Re fina nc ing a c tivity o ffe rs o ppo rtunity to re duc e c o st o f de b t � On tra c k fo r 50% se e -thro ug h L T V b y De c e mb e r 2013 - Will c o ntinue to re duc e ste a dily the re a fte r � Swa p c lo se -o ut c o sts a sma ll dra g o n NAV g ro wth - 7 pps in 2012, like ly 4-6pps in 2013 12
ASSE T DISPOSAL S 2012 2011 Pro c e e ds Bo o k va lue Pro c e e ds Bo o k va lue £m £m £m £m Ope n ma rke t tra nsa c tions Co mple te d / e xc ha ng e d Who lly o wne d 71 73 7 6 USAF 21 21 - - UCC 21 19 8 7 T o ta l 113 113 15 13 77 77 - - Asse t sa le s to JV Pa rtne rs T ota l 190 190 15 13 Ave ra g e yie ld 6.4% 6.4% 6.4% 6.4% � Dispo sa l a c tivity suppo rtive o f va lua tio ns � T a rg e ting c .£100m no n-c o re dispo sa ls fo r 2013 - £50-75m who lly o wne d - L e g a c y NHS pro pe rtie s a prio rity (va lue c .£25m) 13
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