Fund Completion

Unite Group PLC
18 December 2006


18 December 2006


                              The UNITE Group plc

                 SUCCESSFUL COMPLETION OF THE FORMATION OF THE
                 £1 BILLION UNITE UK STUDENT ACCOMMODATION FUND


The UNITE Group plc ('UNITE'), the UK's leading commercial provider of student
accommodation, is delighted to announce the completion of the formation of, and
contribution of properties to, the £1 billion UNITE UK Student Accommodation
Fund (the 'Fund') (the 'Transaction').


As at closing of the Transaction equity commitments to the Fund received from
leading third party institutional investors total £297 million, an increase of
£31 million above the level of commitments in place at the time the Transaction
was announced on 13 November 2006. Approximately 51 per cent. of these
commitments have been drawn to fund the acquisition of the properties
contributed to the Fund by UNITE, resulting in third party investors and UNITE
having interests in the Fund of 61 per cent. and 39 per cent. respectively.  The
remaining 49 per cent. of equity commitments will be available to fund the
purchase of future assets. The Fund is expected to own student accommodation
property worth over £1 billion when fully invested.


UNITE received consideration of £515 million from the Fund comprising £419
million of cash and £96 million which was re-invested to acquire UNITE's 39 per
cent. interest in the Fund.  The estimated net cash proceeds to UNITE after
repayment of existing debt secured on the properties and payment of expenses
associated with the formation of the Fund are £33 million.  This is in addition
to the £33 million UNITE has previously released through a bridge financing.


UNITE is also in advanced discussions with a number of other investors who have
made non-binding indications of interest to invest in the Fund.  Based on the
continuing level of interest in the Fund, UNITE is considering selling
additional units in the Fund during 2007, thereby reducing its interest in the
Fund and releasing additional cash proceeds.


As part of the closing of the transaction, settlement took place of the £280
million of commercial mortgage backed securities ('CMBS') issued to provide debt
financing to the Fund at a loan to value ratio of 55 per cent.  The blended
margin for the securities, 88 per cent. of which are rated AAA, is 21 basis
points over LIBOR.


Commenting on the Transaction, Mark Allan, UNITE's Chief Executive, said:


'We are delighted to have successfully completed the formation of the UNITE UK
Student Accommodation Fund following overwhelming support from our shareholders
for the transaction.


'The transaction will provide us with capital to fund our development pipeline
from which we expect to continue to deliver attractive returns to our
shareholders. Shareholders will also benefit from UNITE's long term management
of the assets sold to the Fund which will provide a new and valuable management
fee stream.


'The formation of the Fund, together with the successful execution of the
associated CMBS financing, has demonstrated the strong demand from leading
institutional equity and debt investors for well managed student accommodation
properties, and firmly establishes student accommodation as an institutionally
recognised property asset class.'


ENQUIRIES


The UNITE Group plc

Telephone: [phone]

Mark Allan/Tabitha Birchall



Financial Dynamics

Telephone: [phone]

Stephanie Highett/Dido Laurimore


Notes to Editors:


UNITE is the UK's leading student hospitality company. Listed in the FTSE 250
index of the London Stock Exchange, the Group focuses on the provision and
management of high quality, well-located student accommodation and hospitality
services in strong higher education markets.


UNITE delivers the real student experience, whilst at the same time helping to
regenerate cities as part of the community and contributing to the improvement
of the country's housing.  It undertakes the planning, development and
management of sites, often working closely with the universities and colleges,
to deliver accommodation for students across all ages and nationalities.  UNITE
developments typically show high occupancy levels and robust rental growth as
demand continues to rise for places in UK Higher Education and for safe, high
quality accommodation for students.


Further information on UNITE is available at www.unite-group.co.uk.


The contents of this announcement, which have been prepared by and are the sole
responsibility of UNITE, have been approved by Morgan Stanley & Co. Limited
('Morgan Stanley') and Macquarie Capital Partners Limited ('MCP'), both entities
authorised by the Financial Services Authority, solely for the purposes of
section 21(2)(b) of the Financial Services and Markets Act 2000. Morgan Stanley
and MCP are each acting for UNITE in connection with the Transaction and no-one
else, and will not be responsible to anyone other than UNITE for providing the
protections afforded to clients of Morgan Stanley and MCP or for providing
advice in relation to the Transaction. The address of Morgan Stanley is 25 Cabot
Square, Canary Wharf, London E14 4QA.  The address of MCP is Citypoint, 1
Ropemaker Street, 35th Floor, London EC2Y 9HD.


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