Unite Group values rise amid strong student accommodation demand
By Josh White
Date: Tuesday 08 Apr 2025
(Sharecast News) - Unite Group reported a modest rise in quarterly property valuations on Tuesday, supported by rental growth and continued strong demand for student accommodation, as it updated the market on trading and fund performance for the first quarter of 2025.
The FTSE 100 student accommodation provider said 75% of its beds for the 2025-2026 academic year had now been sold, down from 84% at the same stage last year.
It attributed the change to a later leasing cycle, in line with expectations following a return to more typical seasonal trends.
The company said it was on track to achieve rental growth of 4% to 5% and occupancy of 97-98% for the year.
Unite said it was seeing robust demand from both domestic and international students, supported by a 2% increase in the UK's 18-year-old population and higher visa issuance so far this year.
University nomination agreements accounted for 56% of reserved beds, unchanged from the prior year.
Quarterly valuations for Unite's two principal funds both saw positive momentum.
The Unite UK Student Accommodation Fund (USAF) portfolio rose 0.7% on a like-for-like basis to £2.91bn, driven by 0.8% rental growth and stable yields of 5.2%.
Its London Student Accommodation Joint Venture (LSAV) portfolio meanwhile increased 0.8% to £2.08bn, supported by 1.3% rental growth, though partially offset by a two basis point rise in yields to 4.5%.
Unite also said it was in advanced talks to form a new joint venture with Manchester Metropolitan University for the development of 2,300 beds at the Cambridge Halls site in central Manchester, with phased delivery planned for 2029 and 2030.
It added that it was progressing other pipeline projects, including a 934-bed scheme at Central Quay in Glasgow and a Newcastle University joint venture expected to receive planning approval in May.
Separately, the company said the Mayor of London had called in its 605-bed TP Paddington scheme after a local rejection, with a decision expected later in the year.
Unite said it was continuing to work with the Building Safety Regulator on pre-construction approvals for other London projects targeted to start this year.
"Student numbers are expected to increase again for the 2025-2026 academic year due to a growing UK 18-year-old population and improving trends in international student recruitment," said chief executive officer Joe Lister.
"Reservations have accelerated in recent weeks, in line with our expectations for a later leasing cycle, and are underpinned by nomination agreements from our university partners.
"We remain on track to deliver rental growth of 4% to 5% and occupancy of 97% to 98% for the 2025-2026 academic year."
At 0828 BST, shares in Unite Group were up 1.94% at 812.5p.
Reporting by Josh White for Sharecast.com.
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