41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 211
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
3.4 Investments in joint ventures (Group)
Accounting policies
Joint ventures are those entities over whose activities the Group has joint control, established by contractual
agreement. The consolidated financial statements include joint ventures initially at cost subsequently, increased or
decreased by the Group’s share of total gains and losses of joint ventures on an equity basis. Interest free joint venture
investment loans are initially recorded at fair value – the difference between the nominal amount and fair value
being treated as an investment in the joint venture. The implied discount is amortised over the contracted life of the
investment loan.
The Directors consider that the agreements integral to its joint ventures result in the Group having joint control
over the key matters required to operate the joint ventures. A significant degree of judgement is exercised in this
assessment due to the complexity of the contractual arrangements.
USAF and LSAV are jointly owned entities that are accounted for as joint ventures. Due to the complexity of the
contractual arrangements and Unite’s role as manager of the joint venture vehicles, the assessment of joint control
involves judgements around a number of significant factors. These factors include how Unite as fund manager has the
ability to direct relevant activities such as acquisitions, disposals, capital expenditure for refurbishments and funding
whether through debt or equity. This assessment for USAF is complex because of the number of unit holders and how
their rights are represented through an Advisory Committee. For some of the activities it is not clear who has definitive
control of the activities: in some scenarios the Group can control, in others the Advisory Committee. However, for the
activities which are considered to have the greatest impact on the returns of USAF, acquisitions and equity financing, it
has been determined that the Group and the Advisory Committee has joint control in directing these activities and that
on balance, it is appropriate to account for USAF as a joint venture. The assessment for LSAV is more straightforward
because the Group and GIC each own 50% of the joint venture and there is therefore much clearer evidence that
control over the key activities is shared by the two parties.
The Group has two joint ventures:
Joint venture
Group’s share of
assets/results
2022 (2021)
Objective
Partner
Legal entity in which
Group has interest
The UNITE UK Student
Accommodation Fund
(USAF)
29.5%*
(23.4%)*
Invest and operate
student accommodation
throughout the UK
Consortium of
investors
UNITE UK Student
Accommodation Fund,
a Jersey Unit Trust
London Student
Accommodation
Venture (LSAV)
50%
(50%)
Operate student
accommodation
in London and
Birmingham
GIC Real Estate Pte,
Ltd Real estate
investment vehicle
of the Government
of Singapore
LSAV Unit Trust, a Jersey Unit
Trust and LSAV (Holdings) Ltd,
incorporated in Jersey
*
Part of the Group’s interest is held through a subsidiary, USAF (Feeder) Guernsey Limited, in which there is an external investor. A noncontrolling interest therefore occurs on consolidation of the Group’s results representing the external investor’s share of profits and
assets relating to its investment in USAF. The ordinary shareholders of Unite Group PLC are beneficially interested in 28.15% (2021:
22.0%) of USAF.
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