Portfolio values lift at Unite, though Brexit uncertainty looms

Student accommodation developer and manager Unite Students posted the quarterly valuation of the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) as at 30 June.

The FTSE 250 firm said USAF’s property portfolio was independently valued at £2.15bn, representing a like-for-like increase of 1.0% during the quarter.

It said the portfolio comprises 26,319 beds in 74 properties across 23 university towns and cities in the UK.

LSAV’s investment portfolio was independently valued at £758m, also a 1.0% increase over the quarter.

That portfolio comprises 4,636 beds across 12 properties in London and three properties in Edinburgh.

Unite said the increase in valuations was driven primarily by rental growth in the quarter, with valuation yields remaining stable.

The USAF portfolio is now valued at an average yield of 5.6%, and LSAV’s portfolio at 4.9%.

“The latest USAF and LSAV valuations reflect further rental growth achieved in the quarter as a result of strong bookings progress for the coming academic year,” said Unite Students chief financial officer Joe Lister.

The company also commented on the EU membership referendum, which has resulted in a period of uncertainty for the property investment market.

It confirmed that the USAF and LSAV valuations were taken before the referendum vote and do not reflect the uncertainty.

Unite said EU students represent 7% of all full-time students in the UK and 9% of Unite’s customers.

It said applications from EU students are up 6% for the 2016-17 academic year and the government has confirmed that students starting courses this year will have access and funding guaranteed for the duration of their courses.

“Despite the uncertainty created by the EU referendum, reservations for the 2016/17 academic year are 87%, marginally ahead of the position at the same time last year,” Lister added.