JV with Lehman Brothers

Unite Group PLC
15 April 2004

                         
Date:                    15 April 2004
On behalf of:            The UNITE Group plc ('UNITE')
Embargoed until:         0700hrs


The UNITE Group plc
UNITE SECURES £45 MILLION STUDENT VILLAGE JOINT VENTURE

The UNITE Group plc ('UNITE'), the UK's largest provider of student
accommodation services, today announces its first joint venture for the
development and operation of a 1,162-bed student village in Sheffield.

UNITE's joint venture partner is Lehman Brothers, the global investment bank.
UNITE and Lehman Brothers will each invest £4 million for a 50% stake in the
joint venture, with UNITE retaining responsibility and receiving a fee for the
development and subsequent management of the asset. The student village, named
The Forge, will be let directly to students and will be opened in Autumn 2005.
It is expected to be worth £45 million on completion, based on a net initial
yield of 7.25%, which is in line with other comparable UNITE properties.  The
joint venture is for an initial period of five years and senior debt for the
development is being provided by Eurohypo AG, the specialist European real
estate bank.

UNITE's partner contractor, Business and Construction Services company
Carillion, will start work on the site in May this year, with the accommodation
being constructed entirely through modular construction techniques,
incorporating bedrooms from UNITE's off-site manufacturing facility. The project
is located in Sheffield's Bramall Lane quarter and is ideally located for
students from both the University of Sheffield and Sheffield Hallam University.
The Forge will offer a broad range of accommodation, including studios and
en-suite study bedrooms arranged in various flat sizes, as well as extensive
leisure facilities, such as a gymnasium.

Both UNITE and Lehman Brothers are considering extending the joint venture
relationship to further student village projects.

Mark Allan, Finance Director for UNITE:

'The joint venture with Lehman Brothers is an important step for UNITE.  In line
with our strategy it introduces a new and recognised real estate investor to the
sector and opens up a fresh source of capital for the Group. The project is
equally significant from a construction perspective.  At 1,162 beds, it is the
largest student accommodation scheme undertaken to date using modular
construction techniques.  This will offer us considerable benefits in the
project delivery phase and is an important validation of the potential for
off-site manufacture in our sector.'

Catherine Webster, Director at Lehman Brothers Real Estate:

'We are excited by the opportunity of investing alongside the market leader in
student accommodation in a flagship scheme for Sheffield. Whilst this
partnership with UNITE represents our first investment in the sector we very
much hope that similar opportunities to invest alongside UNITE will arise in the
future.'


Enquiries:

The UNITE Group plc
Mark Allan, Group Finance Director                      Tel: [phone]

Redleaf Communications Ltd                              Tel: [phone]
Emma Kane                                               Mob: [phone]

Lehman Brothers
Catherine Webster                                       Tel. [phone]

Carillion
Paula Manning, Corporate Communications                 Tel: [phone]


Notes to Editors

  • UNITE currently has three student residences in Sheffield and on opening
    the new student village, UNITE will operate a total of 2,365 beds in the
    city.

  • Full-time student numbers in Sheffield have grown by some 11% (total:
    37,210 students) over the past five years.


                      This information is provided by RNS
            The company news service from the London Stock Exchange