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Unite Students to Target Domestic Students as Valuations Fall

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

The latest valuation of the Unite UK Student Accommodation Fund (USAF) has resulted in a like-for-like decline of 2.2% to £2,788 million. Meanwhile, the London Student Accommodation Joint Venture (LSAV) was valued at £1,315 million, representing a fall of 1.5% in the quarter on a like-for-like basis.

The valuation declines for both USAF and LSAV are the result of Coronavirus, which has led to an anticipated reduction in income due to the decision from Unite Students to forgo rent for students who choose to return home for the rest of the academic year.

The valuations are also based on no rental growth in the quarter. Overall, the USAF portfolio is valued at an average yield of 5.3% and the LSAV portfolio an average yield of 4.4%.

Due to the uncertainty created by Covid-19, the valuations have been reported on the basis of 'material valuation uncertainty' in line with RICS guidance.

Although reservations for 2020-21 are in line with the same time last year (79%), the company recognises that travel restrictions could result in a reduction in the intake of international students.

Therefore, Unite is shifting the emphasis of its marketing to target the c.1.2 million students who will require accommodation for the new academic year. This will include domestic students who may otherwise live in HMOs, in addition to international students studying multi-year courses.