Student accommodation specialist announces strong start to year
Bristol based property specialist Unite Students announced it has seen a strong start to the year in a trading update.
The company said it had seen a strong start to the 2023/24 sales cycle with 70 per cent of beds sold compared to 60 per cent last year.
Unite is targeting rental growth of at least five per cent for the year. It currently has two schemes in development, totalling 1,421 beds and £200m in future revenues.
Richard Smith, chief executive of the company, welcomed the results.
He said: “We have seen a strong start to the 2023/24 sales cycle, reflecting the appeal of our high-quality portfolio and fixed-price, all-inclusive offer, which provides students with significant savings and certainty on their bills.
“Reservations are significantly ahead of recent sales cycles, reflecting strong demand from new and existing students as well as new nomination agreements with universities.
“We now expect to deliver rental growth of at least five per cent for the 2023/24 academic year, which will help offset the cost pressures we are facing through higher utility and staff costs.
“Growing income also offers support to our property valuations as the market adjusts to an environment of higher funding costs.”
Smith said that despite the challenging economic environment, the business remains well positioned thanks to increasing student numbers and growing demand for high-quality, purpose-built student accommodation across all markets.
He added: “Moreover, our alignment to the strongest universities and the capabilities of our best-in-class operating platform mean we remain confident of continuing to deliver strong operational results.”
Demand for Unite’s accommodation has been strong in the first part of the sales cycle.
Across the group’s entire property portfolio, 70 per cent of rooms are now sold for the 2023/24 academic year, significantly ahead of the prior year and pre-pandemic levels (2022/23: 60 per cent).
In Unite’s strongest markets there have been an increasing number of students looking to secure accommodation earlier in the sales cycle than previous years.
There is increased demand from universities who see quality accommodation as a key part of their proposition to prospective students.
As a result of this strong demand and the need to offset cost pressures in the business, Unite now expect to deliver income growth of at least five per cent for 2023/24.
Unite says its all-inclusive offer will continue to provide value for money compared to alternative options in the purpose-built student accommodation and houses in multiple occupation sectors.
The group is committed to two development schemes, Derby Road in Nottingham, completing in 2023, and Jubilee House in Stratford, totalling £200m in future capital.