Student demand from UK and EU boosts Unite's prospects

Student accommodation developer Unite Students said it had seen “good levels of demand” from students from the UK, the EU and beyond since the beginning of 2017.

At its annual general meeting Unite told investors this had translated into letting reservations running at 82%, up two percentage points on last year, and supporting rental growth of up to 3.5%.

Unite said sales of non-core assets have realised £434m, with its share being £170m, against a target of £150-£200m for the year. The proceeds would be used to fund Unite’s development pipeline totalling more than 7,000 beds, through to the end of 2019, and expected to add 12-14p of earnings per share when completed and fully let.

The firm said it had “made positive progress” following the acquisition of its first major on-campus portfolio at Aston University, with reservations across the property already at more than 90% for the 2017/18 academic year. Unite said these were under-pinned by a new initial one-year nomination agreement with Aston University for 1,950 beds; with the remaining beds let directly to students.

Richard Smith, Unite’s chief executive, said the company had made “excellent progress in the first four months of the year, not only in the progression of our development pipeline, but in strengthening our relationships with universities and continuing to demonstrate how our market leading operating platform enables great customer service.

“Our lettings for 2017/18 are substantially under-pinned and given the ongoing high demand for quality accommodation from students and universities alike, we remain confident in the outlook for the remainder of the year and beyond.”