REG - Unite Group PLC - INVESTOR EVENT TODAY

UniteAnnouncement

27/11/2025 07:00

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RNS Number : 1813J  Unite Group PLC (The)  27 November 2025

PRESS RELEASE

27 November 2025

THE UNITE GROUP PLC

('Unite Students', 'Unite', the 'Group', or the 'Company')

INVESTOR EVENT TODAY

Unite Students, the UK's leading owner, manager and developer of student
accommodation, will today host an investor event in London where it will focus
on current market dynamics, strategic priorities for the business, capital
allocation and financial guidance for 2026.

 

Highlights

 ●    Demand for UK Higher Education continues to grow
 ●    The strongest universities are expected to outperform and increase student
      numbers
 ●    Housing demand is strongest for high-tariff universities, where students
      recognise most value from their studies
 ●    Unite will accelerate the repositioning of its portfolio to the UK's strongest
      universities, targeting an increase in its high-tariff weighting from 64% to
      80%
 ●    University partnerships will be prioritised as a key growth opportunity,
      building on the 4,300 beds to be delivered for existing joint ventures
 ●    Unite will accelerate disposals, providing surplus capital to be deployed at
      the strongest risk-adjusted returns, including university partnerships and
      share buybacks

 

Financial guidance and outlook

 ●    Guidance reiterated for adjusted EPS of 47.5-48.25p in FY2025
 ●    Targeting 93-96% occupancy and 2-3% rental growth for the 2026/27 academic
      year
 ●    Expect Adjusted EPS to reduce by 7-10% in FY2026, reflecting lower occupancy,
      property activity and rising finance costs

Joe Lister, Unite Students Chief Executive Officer, commented:

"The fundamentals of the Higher Education sector remain strong, underpinned by
growing domestic demand and increasing mobility of international students. The
vast majority of our portfolio is delivering strong levels of occupancy and
rental growth but we have experienced challenges from weaker demand and higher
supply in some cities. We are responding through a focus on operational
excellence from our best-in-class platform to deliver sustainable rental
growth, cost discipline and execution of our business plan for the acquisition
of Empiric.

 

We will increase the alignment of our portfolio towards the strongest
universities by accelerating disposals, delivering university partnerships and
growing our addressable market through a dedicated offer to returning
students. We will be disciplined and flexible in our use of capital with
investment focused on delivering the best risk-adjusted returns for
shareholders, including share buybacks where we consider appropriate. We
remain confident in the prospects for the business and see a pathway to growth
from 2027."

 

Webcast details

Anyone who wishes to attend the event may do so via webcast available here,
starting at 2:30pm: https://brrmedia.news/UTG_InvestorEvent
(https://brrmedia.news/UTG_InvestorEvent) . A recording will be made available
on the Company's website following the event. Please contact Sodali & Co
for further details.

 

Portfolio strategy and capital allocation

Since the acquisition of Liberty Living in 2019, we have actively managed our
portfolio to increase alignment to the strongest universities and best
locations. During this period, we have disposed of around 15,000 beds and
reduced our number of cities from 27 to 22. Together with deliveries in our
development pipeline, this has seen the portfolio's alignment to Russell Group
cities rise from 87% to 93% and the share of income from high-tariff
universities increase from 52% to 64% since 2019.

 

We expect the UK's strongest universities to outperform and capture a growing
share of student numbers in the next 5-10 years. Our committed and future
investment activity aims to increase the portfolio's weighting to high-tariff
universities from 64% currently to 80% over the medium-term leading to a more
focused, higher-quality portfolio with a presence in 18-20 cities.

 

Our revised capital allocation framework aims to deliver this change while
driving earnings growth and attractive total accounting returns and
maintaining a robust balance sheet:

 

 ●    Delivering on university partnerships: Successfully delivering the 4,300 beds
      secured with Newcastle University and Manchester Metropolitan University and
      targeting one new joint venture per year
 ●    Discipline in off-campus development: Complete on-site schemes, adding £21m
      to NOI by 2027, and optimise value from uncommitted schemes
 ●    Accelerating capital recycling: Targeting disposals of £300-400m p.a. from a
      combination of lower-growth assets, stabilised assets in core markets and
      low-yielding assets
 ●    Focus on risk-adjusted returns: Flexible use of surplus capital for university
      partnerships and share buybacks

 

Trading update

Review of 2025/26

The Group delivered occupancy of 95.2% for the 2025/26 academic year and
rental growth of 4.0% (2024/25: 97.5% and 8.2%). The following trends shaped
our performance during the sales cycle:

 ●    Increasing bookings from universities: Nomination agreements increased to 59%
      of beds (2024/25: 57%), delivering rental growth of 4.6%
 ●    International sales were broadly stable: Stronger undergraduate demand offset
      fewer late cycle sales to Chinese postgraduates with total international sales
      accounting for 28% of bookings (2024/25: 28%)
 ●    Strong cities continuing to deliver: Across 19 of our 22 cities, we achieved
      average occupancy of 97% with rental growth of 4.3% in those markets above 97%
      occupancy
 ●    Vacancies concentrated in a few regional cities: Three markets (Leicester,
      Nottingham and Sheffield) accounted for a 1.3 percentage point reduction in
      occupancy
 ●    Impact of new supply in some markets: New buildings and major refurbishments
      were slower to let, accounting for a further 0.9 percentage point reduction in
      occupancy

 

2026/27 academic year guidance

Having launched our sales cycle in late October, 62% of rooms are now reserved
for 2026/27 (2025/26: 62%). This comprises 57% of beds let to universities
under nomination agreements and 5% through direct-let sales.

 

We are targeting occupancy of 93-96% and rental growth of 2-3% for the 2026/27
academic year. This results in like-for-like growth in rental income of 0-4%
for the 2026/27 academic year.

 

Our occupancy target assumes broadly stable student demand for housing. This
reflects a larger UK 18-year-old cohort and our expectation for a further
increase in students choosing to live at home at mid and low-tariff
universities.

 

Our rental growth guidance reflects increases of 3-4% for nomination
agreements (59% of beds for 2025/26), for which the majority benefit from
annual inflation-linked uplifts. For direct-let beds, we expect to deliver
2-3% rental growth in those markets operating above 95% occupancy, while
markets with higher vacancy are expected to see rents grow by a more modest
0-1% as we seek to drive overall income through improved occupancy.

 

 

                                  Beds        Occupancy 2025/26  Occupancy  Rental growth

                                                                 2026/27    2026/27
 Nomination agreements            ~37,000     100%               Stable     3-4%
 Direct-let   High occupancy      ~16,000     95%                +/-1ppt    2-3%

              markets (>95%)
              Low occupancy       ~11,000     78%                +/-5ppt    0-1%

              markets (<95%)
 Total¹                           ~64,000     95.2%              93-96%     2-3%
 Like-for-like income growth                  0-4%

1) Operational portfolio including opening of Hawthorne House, Stratford.
Excludes Empiric acquisition and future disposals

 

Financial guidance

2025 earnings outlook

We are reiterating our guidance for adjusted EPS of 47.5-48.25p for 2025. This
reflects stronger than anticipated trading in the year to date, as well as the
expected recognition of a fee on formation of our joint venture with Newcastle
University. Together, these factors offset the impact of lower than expected
occupancy for term 1 of the 2025/26 academic year.

 

2026 earnings

The Board expects adjusted EPS to reduce by 7-10% in 2026 based on the
mid-point of earnings guidance for 2025, which reflects a combination of
weaker income, property activity and rising finance costs:

 ●    Lower occupancy and shorter tenancy lengths for the 2025/26 academic year have
      a greater impact in the 2026 financial year due to a reduction in income for
      terms 2 and 3
 ●    Development completions taking longer to achieve stabilised income results in
      an initial drag on earnings
 ●    Lower non-recurring fees in relation to university partnerships
 ●    Operating costs and overheads are expected to be held flat in 2026, reflecting
      central cost savings delivered in H2 2025, which offset the impact of
      inflationary increases
 ●    £142m of completed disposals in 2025 and planned sales of £300-400m in 2026
      are expected to result in modest earnings dilution ahead of reinvestment
 ●    The cost of debt is expected to rise to 4.5% in 2026 from 4.1% in 2025,
      reflecting financing activity and higher marginal borrowing costs

 

The Board expects dividends per share to remain unchanged for FY2026.

 

Medium-term outlook

The Board sees a pathway for Unite to return to earnings growth from 2027
through above-inflation rental growth in our core markets, cost efficiencies
from technology investment, realising cost synergies from the acquisition of
Empiric and accretive capital recycling.

 

This supports total accounting returns of 8-10% p.a. (excluding yield
movements), underpinned by recurring income and rental growth.

 

ENDS

 

 

 

For further information, please contact:

 

Unite Students

Joe Lister / Mike Burt / Saxon Ridley
                   Tel: +44 117 302 7005

Press office
                                         Tel: +44 117 450
6300

 

Sodali & Co

 Ben Foster / Sam Austrums / Louisa
Henry                                   Tel: +44
20 7250 1446

 

About Unite Students

Unite Students is the UK's largest owner, manager and developer of
purpose-built student accommodation (PBSA) serving the country's world-leading
higher education sector. We provide homes to 64,000 students across 143
properties in 22 leading university towns and cities. We currently partner
with over 60 universities across the UK.

Our people are driven by a common purpose: to provide a 'Home for Success' for
the students who live with us. Unite Students' accommodation is safe and
secure, high quality and affordable. Students live predominantly in en-suite
study bedrooms with rents covering all bills, insurance, 24-hour security and
high-speed Wi-Fi.

We are committed to raising standards in the student accommodation sector for
our customers, investors and employees. Our Sustainability Strategy includes a
commitment to become net zero carbon across our operations and developments by
2030.

Founded in 1991 in Bristol, the Unite Group is an award-winning Real Estate
Investment Trust (REIT), listed on the London Stock Exchange. For more
information, visit Unite Group's corporate website www.unitegroup.com
(http://www.unitegroup.com/) or the Unite Students'
site www.unitestudents.com (https://www.unitestudents.com/) .

 

Unite FY2025 and FY2026 Profit Forecasts

Unite released its 2024 financial results preliminary statement on 25 February
2025, which included the following statement: "guidance for adjusted EPS of
47.5 - 48.25p in 2025" ("Unite FY2025 Profit Forecast"). The Unite FY2025
Profit Forecast is referred to in this announcement.

The Panel on Takeovers and Mergers (the "Panel") has confirmed that the Unite
FY2025 Profit Forecast constitutes a profit forecast made before the
commencement of an offer period, to which the requirements of Rule 28.1(c) (i)
of the Code apply.

 

This announcement also contains the following statement: "The Board expects
adjusted EPS to reduce by 7-10% in 2026 based on the mid-point of earnings
guidance for 2025" (the "FY2026 Profit Forecast").

 

The Panel has granted a dispensation from the requirements of Rule 28 in
relation to the Unite FY2026 Profit Forecast, subject to the requirements of
Rule 28.1(c) (i) of the Code.

 

Basis of preparation

The Unite FY2025 Profit Forecast is based on the Group's current internal
unaudited management accounts for the ten-month period ended 31 October 2025
and the Group's current internal unaudited forecasts for the remainder of the
financial year ending 31 December 2025. The Unite FY2026 Profit Forecast is
based on the Group's current internal unaudited forecasts for the financial
year ending 31 December 2026 prior to the impact of the acquisition of
Empiric.

 

The Unite FY2025 and FY2026 Profit Forecasts have been compiled on the basis
of the assumptions set out below. The basis of the accounting policies used in
the Unite FY2025 and FY2026 Profit Forecasts is consistent with the existing
accounting policies of the Group, which uses 'Alternative Performance
Measures' or other non-International Financial Reporting Standards measures.

 

Directors' confirmation

The Unite Directors have considered the Unite FY2025 Profit Forecast and
confirm that, as at the date of this announcement, the Unite FY2025 Profit
Forecast remains valid, has been properly compiled on the basis of the
assumptions set out below and the basis of accounting used is consistent with
the Unite Group's existing accounting policies.

 

The Unite Directors have also considered the Unite FY2026 Profit Forecast and
confirm that, as at the date of this announcement, the Unite FY2026 Profit
Forecast is valid, has been properly compiled on the basis of the assumptions
set out below and the basis of accounting used is consistent with the Unite
Group's existing accounting policies.

 

Assumptions

The Unite FY2025 and FY2026 Profit Forecasts have been prepared on the basis
referred to above and subject to the principal assumptions set out below. The
Unite FY2025 and FY2026 Profit Forecasts are inherently uncertain and there
can be no guarantee that any of the assumptions listed below will occur and/or
if they do, their effect on the Group's results of operations, financial
condition or financial performance may be material. The Unite FY2025 and
FY2026 Profit Forecasts should be read in this context and construed
accordingly.

The directors of Unite have made the following assumptions in respect of the
financial year ending 31 December 2025 and 31 December 2026:

Assumptions within Unite's control or influence:

(a) no material change to the existing strategy or operation of the Group's
business;

(b) no material adverse change to the Group's ability to meet customer,
supplier and partner needs and expectations based on current practice;

(c) no material unplanned asset acquisitions or disposals, merger and
acquisition activity conducted by or affecting the Group;

(d) no material change to the present management of the Unite Group; and

(e) no material change in capital allocation policies of the Group.

Assumptions outside of Unite's control or influence

(a) no material effect from changes to existing prevailing macroeconomic,
fiscal, monetary and inflationary conditions in the United Kingdom;

(b) no material adverse change to the Group's market environment, including in
relation to customer demand or competitive environment;

(c) no material adverse events that have a significant impact on the Group's
major partners or suppliers;

(d) no material disruption or changes to student demand for accommodation in
the cities in which the Group operates;

(e) no material adverse events that would have a significant impact on the
Group including information technology/cyber infrastructure disruption or
significantly adverse weather events;

(f) no material new litigation, and no material unexpected developments in any
existing litigation, each in relation to any of the Group's activities; and

(g) no material change in legislation, taxation or regulatory requirements
impacting the Group's operations, expenditure or its accounting policies.

 

 

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