Student accommodation firm looking for new development opportunities
Student accommodation firm Unite Students says it is looking at a number of new developments across the UK.
The Bristol based business issued a trading update which underlined the growing demand for student accommodation.
Richard Smith, Unite Students chief executive, said: “We continue to make strong progress with bookings for the 2023/24 academic year with 90 per cent of rooms already sold, demonstrating the strength of student demand and the attractiveness of our fixed-priced all-inclusive offer.
“Reservations are significantly ahead of recent sales cycles, reflecting strong demand from both new and existing students as well as new nomination agreements with universities.
“This progress reinforces our confidence in delivering rental growth of 6-7 per cent for the 2023/24 academic year. Rental growth also continues to support our property valuations as the market adjusts to a higher funding cost environment.”
According to Unite the supply of purpose-built student accommodation is failing to keep pace with growing student demand.
At the same time as private landlords are leaving the sector.
As a result Unite is tracking a number of new development opportunities at attractive returns.
The company added it is uniquely positioned to deliver through its relationships with universities and development capability.
Unite said it is committed to four development schemes, totalling £339m and delivering a blended yield on cost of 6.7 per cent for the PBSA elements.
The £200m remaining costs to complete these projects will be funded through the group’s cash and committed debt headroom of £437m.
The company said it has made good progress in further improving the returns on its uncommitted pipeline of four schemes through reductions in land prices and greater certainty over build costs.
Unite is also tracking a pipeline of other new development opportunities offering attractive returns. It hopes to commit to a number of these schemes during 2023.
