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Unite Release Latest Trading Update

Posted by Richard Ward

Image courtesy of Flickr, Creative Commons

Unite Students has released its latest quarterly valuation update of its partially owned vehicles, the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV).

At 30 June 2020, USAF's property portfolio was valued at £2,789 million, unchanged over the quarter. LSAV's portfolio was valued at £1,316 million, also unchanged over the quarter.

This represents a 2.2% value reduction in the USAF portfolio and a 1.5% reduction in the LSAV portfolio over the first half of the year on a like-for-like basis. This reflects deductions relating to zero summer income and the anticipated impact of Covid-19 disruption on 2020-21 income.

Overall, the USAF portfolio is valued at an average yield of 5.3% and the LSAV portfolio at an average yield of 4.4%, both of which are broadly unchanged over the quarter.

In light of current market uncertainty created by Covid-19, the valuations have been reported on the basis of 'material valuation uncertainty' in line with recent RICS guidance.

Reservations across the group for the 2020-21 academic year are currently at 81% (2019-20: 90%), reflecting delays by some students and universities in making their accommodation choices at this stage. The company is expected a higher than usual volume of booking activity later in the lettings cycle.

For the 2020-21 academic year, Unite is targeting an occupancy level of 90%, down from 98% reported in the previous year. The company is also expected a 10-20% reduction in rental income for 2020-21 compared to 2019-20 due to the impact of cancellations due to Covid-19.