REG - Unite Group PLC - TRADING UPDATE AND Q2 FUND VALUATIONS

UniteAnnouncement

10/07/2023 07:00

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RNS Number : 4005F  Unite Group PLC (The)  10 July 2023

PRESS RELEASE

10 July 2023

THE UNITE GROUP PLC

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

TRADING UPDATE AND Q2 FUND VALUATIONS

 

RECORD RESERVATIONS, RENTAL GROWTH GUIDANCE INCREASED TO 7%, STABLE VALUATIONS

 

Unite Students, the UK's leading owner, manager and developer of student
accommodation, today announces an update on current trading and quarterly
property valuations for the Unite UK Student Accommodation Fund ('USAF') and
the London Student Accommodation Joint Venture ('LSAV') as at 30 June 2023.

 

Richard Smith, Unite Students Chief Executive Officer, commented:

"Reservations for the 2023/24 academic year remain at record levels, with 98%
of rooms now sold, reflecting strong demand from both students and
universities and the attractiveness of our fixed-priced all-inclusive offer.
This supports an improvement in our rental growth guidance to around 7% for
the 2023/24 academic year. Our strong leasing performance will continue to
support our property valuations as the market adjusts to an environment of
higher interest rates.

 

The supply of purpose-built student accommodation cannot keep pace with
growing student demand at the same time as HMO landlords are leaving the
sector. Unite is uniquely positioned to address this housing need through our
best-in-class operating platform, university relationships development and
asset management capabilities."

 

2023/24 lettings performance

Sales have continued to progress strongly for the 2023/24 academic year with
98% of rooms now sold (2022/23: 91%). Demand remains strong from both
university partners and students booking accommodation on a direct-let basis.
Nominations agreements cover 56% of total beds for 2023/24 (2022/23: 52%),
representing an increase of around 2,000 beds compared to the prior year, as
universities increasingly rely on partners to meet their accommodation needs.

 

This is supportive of full occupancy and rental value growth of around 7%
(previously 6-7%) for the 2023/24 academic year (2022/23: 99% and 3.5%).

 

Development pipeline

The Group is committed to four development schemes with a total development
cost of £339 million and blended yield on cost of 6.7% for the student
accommodation elements. The £179 million remaining costs to complete these
projects will be funded through the Group's cash and committed debt headroom
of £393 million at 30 June.

 

Funding update

During the quarter, USAF completed a new £400 million secured loan,
refinancing its £380 million bond which matured in June 2023. The 7-year loan
has a fixed rate of 5.4% and is consistent with our previous guidance for a
3.6% overall cost of debt in 2023 on a see-though basis.

 

Quarterly fund valuations

At 30 June 2023, USAF's property portfolio was independently valued
at £2,923 million, a 1.2% increase on a like-for-like basis during the
quarter. The valuation increase in USAF is driven by quarterly rental growth
of 2.2% and a 5 basis point increase in property yields. The portfolio
comprises 27,924 beds in 71 properties across 19 university towns and cities
in the UK.

 

LSAV's investment portfolio was independently valued at £1,940 million, a
1.1% increase on a like-for-like basis during the quarter. The valuation
increase in LSAV is driven by quarterly rental growth of 2.0% and a 4 basis
point increase in property yields. LSAV's investment portfolio comprises 9,716
beds across 14 properties in London and Aston Student Village
in Birmingham.

 

The USAF and LSAV portfolios are now valued at weighted average yields of 5.1%
and 4.3% respectively. We expect the valuations of our wholly owned portfolio
for 30 June 2023 to be broadly consistent with the USAF and LSAV valuation
movements over the first half of the year.

 

ENDS

 

 

For further information, please contact:

 

Unite Students

Richard Smith / Joe Lister / Mike Burt

Unite press
office
Tel: +44 117 450 6300

 

Powerscourt

Justin Griffiths / Victoria
Heslop
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 70,000 students across 157
properties in 23 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 also achieved a five-star British Safety Council rating
in our last audit.

We are committed to raising standards in the student accommodation sector for
our customers, investors and employees. This is why our Sustainability
Strategy, launched in 2021, 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/)

 

 

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