Student housing owner and developer Unite has said it is confident it will grow rents by at least 7% and occupancy to around 99% for the 2024/25 academic year.
Rental growth will be further enhanced by the £47m of asset management initiatives completing this year at a yield on cost of 8%.
Unite also said it has seen strong demand for its portfolio, with 94% of rooms reserved for the 2024/25 academic year. The rate is below record reservation rates of 98% this time last year, but “ahead of our typical leasing pace”.
Demand from international students for the group’s portfolio also remains robust, said Unite, with 18% of the portfolio sold on direct-let tenancies to international students for 2024/25.
Its Unite UK Student Accommodation Fund property portfolio saw a 3.2% increase in valuation to £2.9bn on a like-for-like basis during the quarter, while its London Student Accommodation Venture portfolio posted a 2.8% increase in value to just under £2bn.
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.”
Lister added that the business was also making progress with the delivery of its development pipeline and had recently secured a resolution to grant planning for its 934-bed Central Quay development in Glasgow.
Its joint venture with Newcastle University is also progressing, said Lister, with demolition works at Castle Leazes expected to begin within the coming weeks. Plans have recently been submitted for 2,000 beds on the site.
“We are tracking further opportunities for development, university partnerships and acquisitions in London and strong regional markets at attractive returns and expect to add to our pipeline in the second half of the year,” said Lister.
Image © Unite Students
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