NEW COVER OVERVIEW OVERVIEW Strong operational performance - 99% - PowerPoint PPT Presentation

Interim Results 2009 Interim Results 2009 Six months ended Six months ended 30 June 2009 30 June 2009 NEW COVER

OVERVIEW OVERVIEW  Strong operational performance - 99% occupancy for 2008/09 - 89% reservations for 2009/10 - Strong rental growth (10%-11% for 2009/10) - ‘Blueprint’ cost saving programme on track  Financial position strengthened through decisive action - Underlying business profitable - Rental growth has substantially offset yield expansion - Good progress with asset disposals year to date, including OCB JV - Banking facilities extended and improved - Covenant headroom substantially increased  Outlook improving - Valuations showing signs of stabilisation - No committed increase to net debt beyond 2009 completions - £120 million unutilised debt capacity - Attractive development opportunities emerging, particularly in London 1

HEADLINE RESULTS HEADLINE RESULTS Jun 09 Jun 09 Jun 08 Jun 08 Dec 08 Dec 08 Ne Net Asse Asset Value t Value Basic (pps) 234p 355p 258p Adjusted fully diluted (pps) 286p 398p 325p Earnings Earnings Recurring profit £3.5m £(2.9)m £(12.9)m EPRA adjusted profit/(loss) £(13.3m) £(12.2)m £(44.8)m Reported loss before tax £(29.7m) £(12.8)m £(115.9)m Portfol Portfolio and gearing o and gearing Total operating portfolio (beds) 38,464 37,456 36,700 Investment portfolio valuation (UNITE share) £827m £839m £796m Adjusted net debt £584m £540m £531m Gearing 161% 126% 131% 2

CONTINUING STRONG RENTAL GROWTH CONTINUING STRONG RENTAL GROWTH  Market underpinned by growing demand and declining new supply Rental growth history Rental growth history - Applications for 2009/10 up 10.1% as at 20 August 700 - Total student population forecast up by c. 40,000 600 students 500 400 - Net new supply c.6,500 beds for 2009/10, 4,000 for 300 2010/11 200 100  2008/09 performance strong 0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 - 99% occupancy All property Retail Office Industrial NUS rental index - 9.5% like-for-like rental growth Source: IPD & NUS rental index  Reservations outlook encouraging Total Student Growth Total Student Growth - 89% reserved for 2009/10 (2008/09: 90%) - Current sales rate > 1,300 beds/week 3,000 Full Time UG Part Time UG - London slightly later market due to higher international % 2,500 Full Time PG Part Time PG - Like-for-like rental growth forecast 10% to 11% 2,000 1,500  Resilience in a recession - comparison to early 1990s 1,000 - Sector is less subsidised today, therefore potentially 500 more exposed to economy; but - 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 - Demand/supply imbalance now more acute Source: HESA & Savills Research - Typical parent profile positive - International demand remains strong 3

Investment activity and yields Investment activity and yields  Reasonable transaction activity in sector year to date UNITE vs IPD All Property Net Initial Yield - c. £150 million, of which UNITE £135 million 9.00% 8.00% - Expect increase in volumes over remainder of 7.00% Net Initial Yield year 6.00% 5.00%  Portfolio NOI yield out to 6.8% 4.00% 3.00% - Value declines largely offset by rental growth 2.00% - Portfolio range 6.2% to 7.5% 1.00% 0.00% YE 2004 HY 2005 YE 2005 HY 2006 YE 2006 HY 2007 YE 2007 HY 2008 YE 2008 HY 2009  Signs of values stabilising Unite Completed Portfolio IPD All Property - USAF valuations flat in Q2 - Q3 transactional activity broadly in line with Asset Sales Track Record Q2 valuations 600 8.00% 7.00% - UNITE has further £55 million asset sales in 500 6.00% Sale Proceeds (£'m) legals at reporting date 400 Net Initial Yield 5.00% 300 4.00% 3.00% 200 2.00% 100 1.00% 0 0.00% 2004 2005 2006 2007 2008 2009 Year 3rd Party JVs / Funds Sales Yield UNITE NIY 4

OCB Joint Venture OCB Joint Venture Financial Financial i impact pact  5 year joint venture established 12 August 09 - UNITE retains 25% stake in JV vehicle Prof Pr ofor orma ma Ju June ’ ne ’09 b 09 balance s lance sheet eet Jun 09 Jun 09 Impact Impact Prof Pr oforma ma  2010 pipeline sold to JV (1,119 beds) £m £m £m £m £m £m - £88 million consideration, in line with Dec 08 Property 848 (91) 757 valuation Debt (638) 54 (584) - £69 million costs to complete Cash 54 21 75 - £194 million value on completion Other assets / liabilities 98 16 114  Balance sheet strengthened Adjusted net assets 362 - 362 - Net debt reduced by £75 million Gearing 161% 141% - Committed net debt down by £144 million - £21 million cash release  Future fee income - Development management fee 5% of build cost - Asset management fee 70 bps of GAV - Performance fee capped at £2.5 million 5

Financial highlights Financial highlights Jun 09 Jun 09 Dec 08 Dec 08 Change % Change % Balance Sheet Portfolio value ¹ £1,153m £1,122m 2% NAV per share (adjusted fully diluted) 286p 325p -12% Gearing 161% 135% n/a Proforma for JV / asset sales 139% n/a n/a completed post 30 June Jun 09 n 09 Jun 08 n 08 Change % Change % £m £m £m £m Income Statement Rental income 85.3 72.9 17% Recurring profit 3.5 (2.9) 221% EPRA adjusted loss (13.3) (12.2) -9% Notes 1. Including share of JVs 6

INCOME STATEMENT INCOME STATEMENT Jun 09 Jun 08 % change  Strong performance from investment £m £m segment Total income 85.3 72.9 17.0  Rental income reflects occupancy, rental UNITE share of rental income 41.9 39.5 6.1 growth and increased London weighting of UNITE share of operating costs (11.7) (13.2) -11.4 Gross margin 30.2 26.3 14.8 portfolio 72% 67%  Significant improvement in gross margin Fees from JVs 3.4 3.0 13.3 also driven by cost reduction programme Admin expenses (7.6) (7.2) 5.6  Finance costs reduced Finance costs¹ (19.1) (20.4) -6.3 Investment segment 6.9 1.7 306  £3 million reduction in overheads offset by lower capitalisation into development Corporate costs (3.2) (3.0) 6.7 programme Development pre-contract/other (0.2) (1.6) -87.5 Recurring prof Recu rring profit/(l /(loss) 3.5 .5 (2.9 (2 .9) 221 221 1. Finance costs include interest (£13.9m) and lease payments (£5.2m) 7

INCOME STATEMENT INCOME STATEMENT Jun 09 Jun 08 Property valuation movements in Income Statement £m £m Cost of Valuation Loss on sale Total sales movement of property £m £m £m £m Recurring profit (from previous page) 3.5 (2.9) Development Development/land write downs and losses (15.9) (8.4) Property under 11.6 11.6 on disposal development Investment property 7.9 7.9 Restructuring costs (0.9) (0.9) under development Adjusted loss (13.3) (12.2) Land write-downs/losses 4.3 4.3 Valuation movement 23.8 -Investment (15.1) (7.9) Investment -Development (7.9) (0.7) Investment property 15.1 15.1 Loss on disposal of 2.4 2.4 Losses on disposals of investment assets (2.4) (5.8) investment assets Ineffective hedge and deferred tax charge 9.0 13.8 17.5 15.9 23.0 2.4 41.3 IFRS reported loss (29.7) (12.8) 8

Cash generation in 09/10 academic year Cash generation in 09/10 academic year  Focus on programme to deliver operational cashflows Jun 09 Jun 09 Jun 08 Jun 08 Saving Saving Forecast Foreca to meet all finance costs and overhead, driven by: in period in period saving pa saving pa £m £m £m £m £m £m £m £m - Continued rental growth Cost of sales 11 13 2 3 - Cost reduction programme Operations 14 15 1 5  Savings delivered by: - Development 1 2 1 2 - On-line accommodation management system UMS 4 5 1 2 - New national sales framework 30 35 5 12 - Re-engineered core operating process Overheads capitalised (7) (10) (3) (6) - JV with Connaught Plc 23 25 2 6 - New procurement focus - Restructured city staffing model Total cash saving £5m £12m - Reduced Development, UMS, Group overhead Total income statement £2m £6m  Greater proportion of central overhead expensed saving through income statement as development activity reduced 9

Balance Sheet – adjusted NAV per share Balance Sheet – djusted NAV per share NAV movement (pps) 400 58 (71) 350 325 (2) (24) 300 (2) 2 286 249 250 200 s s s t V V h n t p i A t n e f V A w w l a o N A N e a o w r o m s N d p g g s r e N g t - / g n n N v e e i i s n s n l o s t a t i m s i r o e t r s a r l p n w o u C O d c e n c R l o d e e g n R i n Y s a e i l r / u s t s t n c o e L u m r t p s o e l R e v e D 10 10

Development activity Development activity Committed tted Devel Develop opments (full nts (fully funded funded) Bed Completed Total costs Capex in Capex Equity Average NOI spaces value period remaining remaining yield on cost £m £m £m £m £m 2009 deliveries 2,856 297 278 83 21 - 7.2% 2010 deliveries 1,119 194 159 10 73 - 8.3% 3,975 491 437 93 94 - 7.6%  NOI yields on cost improvements through cost reductions and further rental growth  Completion of JV results in all development off balance sheet post 2009 deliveries  £12 million of further NAV to recognise on 2009 and 2010 developments (post JV)  £17 million of land remaining – sites in London, Birmingham, Edinburgh 11 11