Student accommodation firm has record development pipeline

Accommodation firm  Unite Students is expecting to see a seven per cent increase in rental revenues for the next academic year.

The Bristol firm said in a trading update it is confident of  delivering 98-99 per cent occupancy for the 2024/25 academic year.

It has planning approval for 934-bed development in Glasgow and there are other schemes in the pipeline.

Chief executive Joe Lister said: “Student demand remains strong from both domestic and international students, reflecting the continued appeal of UK Higher Education, our fixed-priced, all-inclusive offer and the growing shortage of high-quality student homes.

“Together with our alignment to the UK’s strongest universities, this supports stronger rental growth for the 2024/25 academic year and underpins growth in our property valuations.

“We have also made further progress with the delivery of our record development pipeline, with significant planning milestones in Glasgow and Newcastle. These projects will deliver much needed new student homes in some of the UK’s strongest university cities.”

Demand for Unite’s accommodation remains strong, across the group’s portfolio, 94 per cent of rooms are now reserved for the 2024/25 academic year.

Demand from universities is strong with 1,000 additional beds secured via nomination agreements compared to the same stage of the sales cycle last year.

While demand from international students also remains robust with 18 per cent of the portfolio sold on direct let tenancies to international students.

Unite said it had not seen a meaningful impact from the removal of visas for family members of international postgraduate taught students, which reflects the single-occupancy nature of its properties.

Rental growth will be further enhanced by the £47m of asset management initiatives.

Unite’s Central Quay development in Glasgow has received resolution to grant planning permission and anticipates securing full planning consent in the coming months, supporting delivery for the 2027/28 academic year.

At Castle Leazes in Newcastle, a joint venture with Newcastle University, planning consent has been granted to demolish the existing buildings which will start in the coming weeks.

Unite recently submitted a planning application for 2,000 new beds on the site, which supports entry into the joint venture later this year.

The company is tracking further opportunities for development, university partnerships and acquisitions in London and strong regional markets at attractive returns and expect to add to its pipeline in the second half of the year.

 At 30 June 2024, USAF’s property portfolio was independently valued at £2.9bn, a 3.2 per cent increase on a like-for-like basis during the quarter. The valuation increase reflects quarterly rental growth of 3.3%.

The portfolio includes 25,602 beds in 66 properties across 19 university towns and cities in the UK.

LSAV’s property portfolio was independently valued at £1.9bn, a 2.8 per cent increase on a like-for-like basis during the quarter.