News

Unite forecasts rental growth amid strong demand

News

Pui-Guan Man

09 April 2024

Investment/finance, Residential

Student housing owner and developer Unite has said it is confident it will grow rents by at least 6% for the 2024/25 academic year, citing strong demand.

Rental growth during the first quarter offset the impact from losing multiple dwellings relief, which the government is scrapping from 1 June this year.

The value of its properties slipped marginally in Q1, down 0.5% on a like-for-like basis to nearly £3bn for its UK Student Accommodation Fund and by 0.8% for its London Student Accommodation Joint Venture.

However, when factoring in MDR, values fell by 2% for USAF and by 0.3% for LSAV respectively during the period.

The loss of MDR is also expected to hit valuations for the wholly owned portfolio. On the back of its removal, the developer expects EPRA NTA to fall by around £70m in H1, equalling a 1.3% fall in asset values per Unite share.

Across the portfolio, 86% of rooms are reserved for the 2024.25 academic year, slightly below its record 90% reservation rate recorded last year. International direct-lets for 2024/25 accounted for 13% of rooms, compared with 15% in the previous year.

Separately, Unite said it was in the “advanced stages” of selling a £180m portfolio, which is expected to complete in Q2. It owns a £75m share of the portfolio.

Unite has also secured full planning approval for its 500-bed Freestone Island project in Bristol, and a resolution to grant consent at its 952-bed Meridian Place in Stratford.

It expects to submit a planning application for around 2,000 new beds at Castle Leazes in Newcastle in April.

Joe Lister, chief executive at Unite Students, said: “Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes. Together with our alignment to the UK’s strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations.

“We continue to progress the delivery of our record £1.3bn development pipeline, securing planning approvals on two schemes in London and Bristol. These projects will deliver much-needed new student homes in two of the UK’s strongest university cities.”

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Unite, Unite Students

Student housing owner and developer Unite has said it is confident it will grow rents by at least 6% for the 2024/25 academic year, citing strong demand. Rental growth during the first quarter offset the impact from losing multiple dwellings relief, which the government is scrapping from 1 June this year. The value of its properties slipped marginally in Q1, down 0.5% on a like-for-like basis to nearly £3bn for its UK Student Accommodation Fund and by 0.8% for its London Student Accommodation Joint Venture. However, when factoring in MDR, values fell by 2% for USAF and by 0.3% for LSAV respectively during the period. The loss of MDR is also expected to hit valuations for the wholly owned portfolio. On the back of its removal, the developer expects EPRA NTA to fall by around £70m in H1, equalling a 1.3% fall in asset values per Unite share. Across the portfolio, 86% of rooms are reserved for the 2024.25 academic year, slightly below its record 90% reservation rate recorded last year. International direct-lets for 2024/25 accounted for 13% of rooms, compared with 15% in the previous year. Separately, Unite said it was in the “advanced stages” of selling a £180m portfolio, which is expected to complete in Q2. It owns a £75m share of the portfolio. Unite has also secured full planning approval for its 500-bed Freestone Island project in Bristol, and a resolution to grant consent at its 952-bed Meridian Place in Stratford. It expects to submit a planning application for around 2,000 new beds at Castle Leazes in Newcastle in April. Joe Lister, chief executive at Unite Students, said: “Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes. Together with our alignment to the UK’s strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations. “We continue to progress the delivery of our record £1.3bn development pipeline, securing planning approvals on two schemes in London and Bristol. These projects will deliver much-needed new student homes in two of the UK’s strongest university cities.”