Demand for the group’s accommodation has continued to strengthen through the second half of the 2022/23 sales cycle, supporting improved pricing, Unite said
The UK’s largest developer of purpose-built student accommodation expects to raise rents by up to 5 per cent owing to strong demand, particularly from international students.
Unite Group, which provides homes to 75,000 students across 25 UK cities, said it has let almost all beds (99 per cent) for the current academic year, ahead of its expectations and up from 94.1 per cent last year.
It also has ‘significant’ waiting lists in many cities after an easing of travel restrictions and a return to in-person teaching has seen overseas students come back en masse to study at UK universities.
Demand for the group’s accommodation has continued to strengthen through the second half of the 2022/23 sales cycle, supporting improved pricing, Unite said.
It added that higher occupancy rates were a result of ‘more normal distribution of UK students between markets, and strong international demand given improved travel conditions’.
But given ‘healthy’ student demand and the ‘need’ to offset inflationary cost pressures, Unite said it was planning to raise rents further – by between 4.5 per cent to 5 per cent in the 2023/24 academic year.
While this is bad news for students, shareholders were pleased, as the group said higher than expected rental income had ‘more than offset’ the impact of growing interest costs in the second half.
It now expects adjusted earnings per share at the top end of 40p to 41p guidance, possibly up as much as 49 per cent from 27.6p in 2021.
Unite shares, which recently entered the FTSE 100, rose almost 5 per cent to 834p in afternoon trading on Monday.
Richard Smith, Unite Students chief executive, said: As previously outlined, we believe that there is an exciting opportunity to grow our platform in the wider living sector by catering to the growing number of young professional renters living in major UK cities.
He said: We already serve this market through the 9,000 postgraduate students who live with us each year.
