REG - Unite Group PLC - Trading Update and Q2 Fund Valuations

UniteAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250708:nRSH0594Qa&default-theme=true

RNS Number : 0594Q  Unite Group PLC (The)  08 July 2025

PRESS RELEASE

8 July 2025

THE UNITE GROUP PLC

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

TRADING UPDATE AND Q2 FUND VALUATIONS

 

STRONG RENTAL GROWTH DRIVING PROPERTY VALUES

 

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 2025.

 

Highlights

·    Continuing momentum in 2025/26 sales with 85% of beds sold
(2024/25:94%)

·    Reiteration of FY2025 guidance for adjusted EPRA EPS of 47.5-48.25p

·    Planning approval secured for 2,000-bed Newcastle University joint
venture

·    Rental growth driving valuation increases in Q2 (USAF: 0.6%, LSAV
0.7%)

 

Joe Lister, Unite Students Chief Executive Officer, commented:

"Student numbers are expected to increase for the 2025/26 academic year due to
a growing UK 18-year-old population and improving trends in international
student recruitment. Sales momentum has picked up in recent weeks, in-line
with our expectations for a later sales cycle, and we continue to target
occupancy of at least 97%. Demand for our accommodation remains underpinned by
our alignment to the UK's strongest universities and nomination agreements
with our university partners."

 

 

Current trading

2025/26 lettings performance

The outlook for student demand is strong for the 2025/26 academic year with 2%
growth in applications from UK 18-year-olds and student visa applications up
29% over the first five months of the year.

 

Positively, this has translated into improving momentum in sales for our
well-located, value-for-money accommodation. Across our portfolio 85% of rooms
are now reserved for the 2025/26 academic year (2024/25: 94%). Demand from
universities remains strong, as they look to secure accommodation to meet
student demand, resulting in nomination agreements for 56% of beds for the
2025/26 academic year (2024/25: 57%). As previously indicated, we expect a
later sales cycle in line with historical trends supported by strong demand
from UK students following A-Level results in mid-August and from
international students during September.

 

Our sales to date support rental growth of 4-5% for the 2025/26 academic year
and we continue to target occupancy of 97-98%. This outlook, together with
trading through the first half of the year, supports reiterated guidance for
adjusted EPRA EPS of 47.5-48.25p for FY2025.

 

HE policy update

The Government's recent Industrial Strategy recognised the critical role
played by UK universities in delivering advanced skills and highlighted the
strength of the Higher Education sector with 17 universities in the top 100
globally. A white paper on post-16 education and skills, incorporating Higher
Education, and an International Education strategy are due to be published
later this year.

 

The Immigration White Paper published in May emphasised the significant
contribution made by international students to the UK economy and research in
the Higher Education sector, while introducing measures to raise standards for
student visas. The changes include a reduction in post-study work visas from
24 to 18 months and the potential introduction of a levy on income from
international students for reinvestment into Higher Education. Further details
are due to be provided in the Autumn Budget. We do not expect these changes to
materially impact international student demand, particularly for high-tariff
universities, at a time when more restrictive policy in the UK's main
competitor markets is making the UK a more attractive destination.

 

The Renters' Rights Bill is expected to become law later this year and come
into effect during the 2025/26 academic year. Secondary legislation around the
bill will act to exempt PBSA from the legislation based on compliance with
government-approved codes of conduct under which the Group has operated for a
number of years. We anticipate the Bill and exemption will apply to future
tenancies (likely from the 2026/27 academic year) and we continue to engage
with Government to understand the impact of transitional arrangements for
existing tenancies at the time of implementation. The Bill will have a
significant impact for the Houses of Multiple Occupancy ('HMO') sector through
new regulation. We expect this to result in higher costs for students and a
reduced supply of HMO student housing over time.

 

Development pipeline update

Planning has been granted for our Castle Leazes joint venture in Newcastle.
Work is underway to secure outstanding approvals and start on-site later this
year. This supports delivery of the first phase of the 2,000-bed project for
2028/29 academic year.

 

Following the signing of a framework agreement in May with Manchester
Metropolitan University, a joint planning application has been submitted for
the development of 2,300 new beds at Cambridge Halls in Manchester city
centre. This supports entry into the joint venture around the end of 2025.

 

We continue to engage with the Building Safety Regulator (BSR) to progress
pre-construction approvals for our upcoming development starts. Applications
for four projects are under review by the BSR and continue to experience
delays. We are working to mitigate this impact in order to deliver projects in
line with our target completion dates.

 

Funding

USAF has refinanced its £395m 2025 bonds through a new £400 million
eight-year secured loan with Rothesay Life at a cost of 5.6%. The new facility
completes refinancing activity in USAF with no maturities now due before 2029.
The refinancing was incorporated into our guidance for a 4.1% weighted average
cost of debt in FY2025.

 

Quarterly fund valuations

At 30 June 2025, USAF's property portfolio was independently valued
at £2,937 million, a 0.6% increase on a like-for-like basis during the
quarter. The valuation increase reflects quarterly rental growth of 1.3%.
Property yields remained broadly stable over the quarter at 5.2%. The
portfolio comprises 24,326 beds in 61 properties across 19 university towns
and cities in the UK.

 

LSAV's property portfolio was independently valued at £2,092 million, a 0.7%
increase on a like-for-like basis during the quarter. The valuation increase
in LSAV is driven by quarterly rental growth of 0.6%. Property yields were
unchanged over the quarter at 4.5%. LSAV's portfolio comprises 9,710 beds
across 14 properties in London and Aston Student Village in Birmingham.

 

       Drivers of LfL capital growth (Q2)
       Valuation   Rental growth  Yield movement  Capital growth*

       June 2025                  (bps)
 USAF  £2,937m     1.3%           +1              0.6%
 LSAV  £2,092m     0.6%           -               0.7%

 

* Capital growth presented net of capital expenditure for property maintenance
and improvement, but excludes fire safety spend

 

The Royal Institution of Chartered Surveyors (RICS) has introduced new
independence rules for valuation firms. Under the new rules, the majority of
our Wholly Owned portfolio will be valued by new valuers, either CBRE or
Knight Frank, from 30 June 2025. Based upon our initial discussions with
valuers, we do not anticipate significant changes in the reported value of our
portfolio. USAF and LSAV will rotate valuers later in the year.

 

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

Justin Griffiths / Victoria Heslop / 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 68,000 students across 152
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 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 Profit Forecast

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 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.

 

Basis of preparation

The Unite FY2025 Profit Forecast is based on the Group's current internal
unaudited management accounts for the five-month period ended 31 May 2025 and
the Group's current internal unaudited forecasts for the remainder of the
financial year ending 31 December 2025. The Unite FY2025 Profit Forecast has
been compiled on the basis of the assumptions set out below.

 

The Unite FY2025 Profit Forecast has been compiled on the basis of the
assumptions set out below. The basis of the accounting policies used in the
Unite FY2025 Profit Forecast 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.

 

Assumptions

The Unite FY2025 Profit Forecast has been prepared on the basis referred to
above and subject to the principal assumptions set out below. The Unite FY2025
Profit Forecast is 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 Profit Forecast 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:

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTPKOBBABKDAOK