CPPIB to sell U.K. student housing business Liberty Living to Unite

Canada Pension Plan Investment Board (CPPIB) has agreed to sell London, U.K.-based student accommodation business Liberty Living Group Plc to The Unite Group Plc.

CPPIB, which acquired Liberty Living in 2015, said the sale will generate pre-closing net proceeds of about $1.3 billion. Reuters said the cash-and-stock deal is valued at US$1.8 billion.

CPPIB will retain a 20 percent interest in the combined business, which will oversee more than 73,000 beds across 173 properties in the United Kingdom.

Two European assets within Liberty Living are not included in the transaction and are currently being marketed.

PRESS RELEASE

Canada Pension Plan Investment Board Announces the Acquisition of Liberty Living by Unite Students to Form a Leading Student Accommodation Operator in the UK

Strategic transaction between Unite Students and Liberty Living would create a scale platform in UK private, purpose-built student accommodation (PBSA) with a total gross asset value in excess of £5 billion

Consideration for the sale of Liberty Living will be provided in a combination of cash and shares in Unite Students

CPPIB’s resultant pro-forma shareholding in Unite Students expected to be 20%

London, UK / Toronto, Canada — July 03, 2019 — Canada Pension Plan Investment Board (CPPIB) has announced plans to sell its wholly owned student accommodation business Liberty Living to The Unite Group plc (Unite Students), a public company listed on the London Stock Exchange (FTSE 250).

Net proceeds to CPPIB from the sale will be approximately C$1.3 billion before closing adjustments. CPPIB will retain a 20% shareholding in the combined group.

“Through this transaction, we are able to continue our investment in the student housing sector within the UK across a broader, more diverse and stable portfolio and with additional development exposure, which fits well within our global real estate strategy,” said Thomas Jackson, Managing Director, Real Estate Investments at CPPIB. “We look forward to working with Unite Students in combining these two excellent businesses to continue to provide affordable, high-quality student accommodation across the UK, and maintain strategic relationships with educational institutions.”

On completion, the combined group will manage a total of over 73,000 beds across 173 properties in 27 UK towns and cities.

Two European assets within Liberty Living (Valencia, Spain and Bremen, Germany) sit outside of the transaction perimeter and are in the process of being marketed for sale by Liberty Living.

The transaction is subject to customary closing conditions, including regulatory approvals.

On completion, CPPIB will hold one seat on the board of Unite Students.

As at March 31, 2019, CPPIB’s equity investments in real estate assets globally totaled C$47.5 billion, and CPPIB’s investments in the UK totaled C$22.1 billion across all asset classes.

About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits in the best interests of 20 million contributors and beneficiaries. In order to build a diversified portfolio, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2019, the CPP Fund totaled C$392.0 billion. For more information, please visit CPPIB or follow us on LinkedIn, Facebook, or Twitter.

About Unite Students

Unite Students is the UK’s largest manager and developer of purpose-built student accommodation serving the country’s world-leading higher education sector. We currently provide homes for almost 50,000 students in circa 130 properties across 22 leading university towns and cities in England and Scotland. Unite Students also has a strong development pipeline, which will deliver more than 6,000 beds in the next three years.

Our 1,400 people are driven by a common purpose: to provide the students who live with us a ‘Home for Success’ and to be the most trusted brand in the sector. We do this through quality service, quality people and quality properties, all designed on the basis of an unrivalled insight into students’ needs and preferences.

Unite Students’s accommodation is high quality, safe and secure, and located close to university campuses, transport links and local amenities. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning services and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.

Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimized online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.

Alongside delivering quality service, our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure. A key part of this strategy is growing the number of beds let though partnerships with mid and high tariff universities which are experiencing record levels of student demand. We currently partner with 60 higher education institutions, guaranteeing that approximately 60% of our rooms are let under multi-year, ‘nomination agreements’ providing high visibility of forward occupancy and rental growth.

Unite Students is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £2 billion Unite Students UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).

Unite Students is the founder of and major donor to the Unite Students Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation annual scholarships. The Foundation has so far provided scholarships for 209 young people working in close collaboration with 27 universities.

Founded in 1991 in Bristol, Unite Students Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.

For more information, please visit Unite’s corporate website, the student site or the Unite Foundation.