Unite on track to hit targets

Unite Group reported a strong start to the second quarter on Friday, on buoyant demand from both British and international students.

The student accommodation specialist said it had made "good progress" on sales during the period, with 90% of rooms now sold for the 2022-2023 academic year. That is an 81% improvement on the previous year, and ahead 89% on 2019-2020, pre-pandemic.

Demand from British students was supported by UK government guidance that universities should prioritise face-to-face teaching, while following the easing of Covid-19 restrictions, international students were able to travel to the UK for the start of the next academic year,

The FTSE 250 property manager, owner and developer added that it had seen "positive progress" in pricing, driven by inflation-linked rental uplifts for multi-year nomination agreements.

It concluded: “Given the strong sales performance to date we are increasingly confident in delivery occupancy of 97% for the 2022-2023 academic year and achieving rental growth at or just above the top end of our guidance of 3.0% to 3.5%.”

Shares in Unite rose in early trading, and where ahead 1% at 1,118.0p at 0830 BST.

Joe Lister, chief financial officer, said: "We are well protected against inflationary pressures through annual re-pricing of our income and cost hedging but, like others, are not immune from the impact of rising costs and interest rates.

"We continue to see significant investor demand for student accommodation, reflecting the sector’s positive outlook, as demonstrated by valuation increase for Unite UK Student Accommodation Fund (USAF) and London Student Accommodation Joint Venture (LSAV)."

As at 30 June, USAF’s property portfolio was valued at £2.97bn, a 3.5% increase on a like-for-like basis during the quarter, while the LSAV investment portfolio’s valuation rose 4.0% on the same basis, to £1.94bn.