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Unite Students Release Q1 Latest Trading Update

Posted by Calum Martin in

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Leaders of student accommodation in the UK, Unite Students, has released its latest trading update and quarterly property valuations for the Unite UK Student Accommodation Fund (USAF) as well as the London Student Accommodation Joint Venture (LSAV).

As of 31st March, Unite have reported that 77% of its rooms are now booked for the next academic year, up from 69% recorded during the same period last year. The reported figure is down slightly from the 20/21 season, which saw 79% of rooms booked by this point in the year.

The company also expects strong student demand for 2022-23 from both domestic and international students due to the increase of 7% in acceptances reported by UCAS this year when compared to pre-pandemic levels. Reduced travel disruptions and grade inflation are both factors expected to play a part in a predicted increase in demand.

For 2022-23 it is maintaining its rental growth guidance of 3.0-3.5%, aiming for 97% occupancy for the 2022/23 academic year.

The company's USAF portfolio was independently valued at £2,865 million, representing a 1.7% increase during the quarter. The portfolio comprises 28,929 beds in 71 properties across 19 university towns and cities in the UK.

Meanwhile, LSAV's investment portfolio was valued at £1,868 million, up 2.7% in the quarter. The valuation increase was attributed to rental growth of 1.1% and a 7 basis point reduction in property yields. LSAV's investment portfolio comprises 9,716 beds across 14 properties in London and Birmingham.

Joe Lister, Unite Students Chief Financial Officer, commented: "We continue to make good progress with bookings for the 2022/23 academic year with 77% of rooms already sold, demonstrating the strength of student demand and our success in increasing the retention of existing customers. This supports our guidance for a return to 97% occupancy and increases our confidence in delivering 3.0-3.5% rental growth for the 2022/23 academic year. In the current environment, headwinds from build cost inflation are impacting our medium-term development pipeline, but we will seek to mitigate these effects where possible."