The Unite Group, a UK developer and manager of student accommodation, has reported an increase in its adjusted fully diluted NAV per share of eight per cent to 286 pence for the first half of 2010.

The profit at a net portfolio contribution level increased by 11 per cent to GBP4.2m (30 June 2009: GBP3.8m), driven by rental growth achieved in 2009/10 and an increase in the number of beds under management.

The value of the group’s stabilised property portfolio grew by 3.8 per cent, driven by 2.3 per cent rental growth and 1.5 per cent from yield compression, delivering GBP27.7m of net valuation uplift.

A further GBP9.7m of net valuation uplift relating to properties under construction has been recognised in the adjusted net asset value.

The IFRS profit was GBP9.8m (30 June 2008: loss of GBP29.7m) and the adjusted loss for the period was GBP4.1m (30 June 2009: loss of GBP13.3m).

Asset sales to USAF totalling approximately GBP145m are expected to complete during the second half of 2010, resulting in approximately GBP40m of cash being released to the group after the repayment of associated debt.

Adjusted net debt totalled GBP409m (31 December 2009: GBP390m) with adjusted gearing at 89 per cent (31 December 2009: 92 per cent and 30 June 2009: 161 per cent).  Both measures are expected to fall in the second half as proceeds from asset sales to USAF are likely to exceed development capital expenditure.

Unite made solid progress in reservations for 2010/11, with 87 per cent of the portfolio let as at 25 August 2010 (2009: 87 per cent).

Rental growth of 2.3 per cent in the period, with rental growth of three to four per cent is expected for the full year.

Unite’s 2010 development programme of 1,119 beds has been substantially completed on time and on budget, ready for 2010/11 occupation.

Mark Allan, chief executive of The Unite Group, says: “The group has made substantial progress in the period under review against each of its strategic objectives, delivering positive growth in both our key metrics of net asset value and recurring profits. Operationally, we have made progress during the period with regard to our current and future development pipeline, the proactive asset management of our existing investments, acquisition and repositioning of assets and ensuring we are best placed to work in partnership with universities.

“Taking into account healthy reservations levels, our progress in securing an attractive development pipeline for the next academic year and beyond and the group’s strong financial position, we are well placed to build on this success over the remainder of 2010 and into 2011. We believe that our strategy positions the group to deliver growth in a changing market.”