Unite Group sees positive valuation performance in latest quarter
Specialist student accommodation manager and developer, the Unite Group, reported its quarterly property valuation of the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) as at 31 December on Wednesday, with USAF's property portfolio was independently valued at £2.25m on that date.
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The FTSE 250 company said that represented a like-for-like increase of 1.1% during the quarter, and 5.0% over the full year.
It said that portfolio comprised 23,483 beds in 63 properties, across 21 university towns and cities in the UK.
LSAV's investment portfolio, meanwhile, was independently valued at £1.24m - up 2.7% in the quarter on a like-for-like basis and 8.4% over the full year.
Unite said LSAV's investment portfolio comprised 8,354 beds across 12 properties in London, as well as the Aston Student Village in Birmingham.
The increase in valuations was said to have been driven by a combination of rental growth and yield compression across the portfolio.
The USAF portfolio was valued at an average yield of 5.3%, and LSAV's portfolio at 4.5%, representing 10 basis points of compression in USAF and 17 basis points of compression in LSAV during the year.
It said the independent valuation for Unite's wholly-owned portfolio, comprising 13,816 beds across 33 properties, would be announced as part of the group's preliminary statement due to be released on 27 February.
The board said the positive valuation performance was supported by a “strong start” to the 2019-2020 sales cycle, which was now well underway.
It claimed that 67% of rooms were now sold for the next academic year, with 57% being guaranteed by nominations agreements, up from 66% and 56% at the same time last year respectively.
“The USAF and LSAV portfolios have both performed well in 2018 with property valuation growth of 5% and 8% respectively,” said Unite Students chief financial officer Joe Lister.
“The performance has been delivered through our partnerships with high quality universities supporting high levels of occupancy and rental growth.
“Bookings for the 2019-2020 academic year have started strongly with 67% of rooms already sold, with 57% guaranteed by nominations agreements at rental levels that are supportive of delivering rental growth in line with our target of 3.0%-3.5%.”