Unite Students has said it will hit 2-3% rental growth this year, as it exchanged contracts for a 1,000-bed site in Stratford, east London.
Half-year results for the UK’s biggest student accommodation provider showed profit before tax rebounding to £130.4m, up from a £73.9m loss for H1 2020.
Earnings, meanwhile, stood at £88.3m for H1 2021, an 18% increase on last year.
Unite chief executive Richard Smith said that the business had “once again shown its resilience”. He said that record university applications for the next academic year would translate into strong demand for its accommodation, adding that Unite “is now positioned for growth”.
Part of the profit increase was driven by a 1.5% uplift in property values of £54.3m.
Despite question marks over whether international students would be able to take their places, Smith said: “Assuming no fundamental change to travel restrictions, we are well positioned and anticipate 95-98% occupancy and 2-3% rental growth in 2021/22.”
He added: “Despite the backdrop of Covid-19, and uncertainty created by the anticipated review of higher education funding, we remain confident in our ability to deliver significant earnings growth and attractive total returns over the medium to long term.”
Unite said that its £769m pipeline would provide an extra 5,048 beds, generating a 6.5% yield on cost. Meanwhile, disposals of £261m during H1 had enabled the landlord to cut its LTV from 34% to 30%.
Unite has bought the Stratford site for £160m, with the scheme due to be completed in 2025 or 2026, subject to planning approval.
The development will be delivered as a university partnership with UCL and University of the Arts London.
Unite recently announced that its 843-bed scheme in Paddington, pictured, would be the most environmentally sustainable student accommodation in Britain.
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