REG - Unite Group PLC - Trading update and Q4 fund valuations

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11/01/2022 07:05

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RNS Number : 9849X  Unite Group PLC (The)  11 January 2022

PRESS RELEASE

11 January 2022

THE UNITE GROUP PLC

('Unite Students', 'Unite', the 'Group', or the 'Company
(http://www.investegate.co.uk/unite-group-plc--utg-/rns/outcome-of-usaf-fund-raising/201403310700235435D/)
')

TRADING UPDATE AND Q4 FUND VALUATIONS

 

Unite Students, the UK's leading owner, manager and developer of student
accommodation, today announces an update on current trading alongside
quarterly property valuations for the Unite UK Student Accommodation Fund
('USAF') and the London Student Accommodation Joint Venture ('LSAV') as at 31
December 2021.

 

Current trading

Higher Education sector update

Latest guidance from the Department for Education confirms that education
settings will remain open for face-to-face teaching under the Government's
Plan B measures to combat COVID-19. In our properties, over 70% of checked-in
students have already returned to their accommodation, which is in line with a
typical year. We expect the remaining students to arrive shortly, following
the start of the spring term.

 

All of our properties remain open and operational and we continue to employ a
range of measures in our buildings to reduce transmission of COVID-19 where
possible. This includes enhanced cleaning and physical and social distancing
measures, as well as offering support to those students needing to
self-isolate.

 

2022/23 reservations

Across the Group's entire property portfolio, 60% of rooms are now sold for
the next academic year (58% at the same time last year). We expect strong
student demand for 2022/23 from both domestic and international students but
anticipate a slightly later sales cycle for international students than in a
typical year due to uncertainty relating to COVID-19. As a result, we have
increased our focus on retaining existing direct-let customers, which has led
to an increased share of sales to re-bookers.

 

This is supportive of our guidance for full occupancy and rental growth of
3.0-3.5% for the 2022/23 academic year.

 

Development pipeline update

We continue to make good progress in the delivery of our secured pipeline and
in sourcing new development opportunities. There remains a positive flow of
development opportunities in London and prime regional cities which meet our
return requirements and we expect to add further schemes to the secured
pipeline during H1 2022.

 

Quarterly fund valuations

At 31 December 2021, USAF's property portfolio was independently valued at
£2,867 million, a 1.6% increase on a like-for-like basis during the quarter
and a 4.6% increase for the year. The Q4 valuation increase in USAF is
principally driven by an 8 basis point reduction in property yields. The
portfolio comprises 29,523 beds in 75 properties across 20 university towns
and cities in the UK.

 

LSAV's investment portfolio was independently valued at £1,819 million, up
3.1% in the quarter on a like-for-like basis and up 10.4% for the year. The Q4
valuation increase in LSAV is driven by rental growth of 0.5% and a 12 basis
point reduction 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 5.2%
and 4.1% respectively. Yield compression in the quarter reflects strong
investment activity in the sector, particularly for London and prime regional
assets. As a result, we expect the valuations of our wholly owned portfolio at
31 December 2021 to reflect yield compression in H2 2021 comparable to the
USAF portfolio.

 

Joe Lister, Unite Students Chief Financial Officer, commented:

"Bookings for the 2022/23 academic year have started positively with 60% of
rooms already sold, demonstrating the continued strength of student demand and
our success in increasing the retention of existing customers. This supports
our guidance of a return to full occupancy and 3.0-3.5% rental growth for the
2022/23 academic year. Reflecting this positive outlook, we continue to see
strong investment demand for UK student accommodation, as reflected in the
valuation performance for USAF and LSAV in 2021."

 

ENDS

 

 

For further information, please contact:

 

Unite Students

Joe Lister / Michael Burt
         Tel: +44 117 302 7005

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, serving the country's world-leading
Higher Education sector. We provide homes to 73,000 students across 173
properties in 25 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's accommodation is safe and secure, high
quality and affordable. Students live predominantly in ensuite 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 new 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, Unite Group is an award-winning Real Estate
Investment Trust (REIT), listed on the London Stock Exchange and a member of
the FTSE 250 Index. Unite is invested in and operates two specialist funds and
joint ventures with institutional investment partners: the £3 billion Unite
UK Student Accommodation Fund (USAF) and the £2 billion London Student
Accommodation Vehicle (LSAV).

 

For more information, visit:

Unite's corporate website www.unite-group.co.uk (http://www.unite-group.co.uk)

The student site www.unitestudents.com (http://www.unitestudents.com/)

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