UPDATE 1-Unite strikes Bahraini student housing JV

* Agrees dela to develop $320 mln of student homes in London

* JV set to reduce net debts by 75 mln stg

(adds detail)

LONDON, Aug 12 (Reuters) - Student accommodation provider Unite Group (UTG.L) has set up a five-year joint venture with Bahrain's Oasis Capital Bank to develop student housing in London worth an estimated 194 million pounds ($320.2 million).

Oasis Capital has bought a 75 percent stake in the joint venture, investing 39 million pounds, with Unite retaining the remaining 25 percent.

Unite has agreed to sell a trio of developments representing its entire 2010 pipeline to the joint venture for 88.2 million pounds.

Under terms of the deal, existing banking facilities relating to each property will be reduced by an aggregate of 14 million pounds and transferred into the joint venture.

Unite said the deal would reduce its net debt by 75 million pounds and release significant cash for the group to exploit opportunities carved out by the real estate slump.

It will continue to develop the three properties and will provide management on completion.

"The creation of joint ventures is a very effective way for the company to maximise returns for shareholders whilst managing the company's development exposure," Mark Allan, Unite Chief Executive, said in a statement.

"...Our joint venture with OCB demonstrates both our ability to raise strategic capital and the ongoing attractiveness of student accommodation as an asset class to institutional investors," Allan said.

The three properties which will be transferred to the joint venture are Lavington Street close to London's Tate Modern art gallery; James Leicester Hall in northern London and 301 Holloway Road, close to the Emirates soccer stadium.

(Reporting by Sinead Cruise)

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