Unite Students, a UK-based student accommodation provider, has issued an update on current trading and quarterly property valuations.
The company reported significant rental growth, which drove up property valuation in the second quarter (Q2) of 2024.
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With 94% of its rooms already reserved for the 2024-25 academic year, Unite Students is outpacing its typical leasing cycle, albeit slightly below the previous year’s 98% record reservation rates.
The demand from universities has increased, with an additional 1,000 beds secured through nomination agreements.
The company has also maintained robust interest from international students, with 18% of its portfolio sold on direct let tenancies to this demographic for 2024-25.
The company says it is confident in achieving a rental growth of at least 7% and an occupancy rate between 98%-99% for the 2024-25 academic year.
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By GlobalDataThis optimism is bolstered by £47m ($60.33m) of asset management initiatives set to be completed this year, which are expected to yield an 8% return on cost.
The company noted that the UK’s political landscape also appeared favourable for the higher education sector, with the Labour Party’s manifesto acknowledging the sector’s value and the need for improved university access.
Additionally, the new Labour government has pledged to secure a stable future for domestic higher education.
Unite Students CEO Joe Lister said: “We have also made further progress with the delivery of our record development pipeline, with significant planning milestones in Glasgow [Scotland] and Newcastle. These projects will deliver much-needed new student homes in some of the UK’s strongest university cities.”
The financial health of Unite Students’ investment funds, UK Student Accommodation Fund (USAF) and London Student Accommodation Joint Venture (LSAV), reflected the company’s robust performance.
As of 30 June 2024, USAF’s portfolio was valued at £2.931bn, marking a 3.2% increase while LSAV’s portfolio saw a 2.8% rise to £1.995bn.
Unite continues to lead the purpose-built student accommodation (PBSA) sector in the UK, housing 70,000 students across 157 properties.
With partnerships with more than 60 universities and a commitment to sustainability, the company is set to reach net-zero carbon by 2030.
