29 July 2025
If you are covering Unite Group’s latest financial results, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“Unite’s half year results are generally positive, albeit with key metrics settling down to more normalised growth rates. The company’s like-for-like rental growth was up 7%, but this is not expected to recur next year, with the company targeting growth in the 4-5% range. Earnings per share were up just 3%, as last year’s equity raise increased the share count and thus diluted the earnings growth somewhat. Property valuations have also crept up 1% in the quarter, and the company’s net asset value has behaved similarly.
“The big question mark is around the company’s forward-looking occupancy rate, which is now at 88% for the academic year starting in September 2025. That is a substantial improvement compared to just 70% six months ago, but the reservation rate remains slow compared to prior years. Unite’s management suggest this is also a normalisation impact following “unusually early booking patterns” over the past couple of years, however, that statement doesn’t entirely track the company’s historic data – the only recent years with a lower reservation rate at this stage in the year were 2020 (82%) and 2021 (83%), when take-up was severely impacted by Covid-19. For comparison, the figures in 2018 and 2019 were both above 90%.
“Unite believes that more students are choosing to enter clearing in late August to secure a university place, and those doing so are understandably unable to commit to accommodation before knowing where they will be studying. There is also a trend of students putting off booking accommodation until the last minute in the hope of securing late discounts from providers, something which some of Unite’s competitors did last year. It is clear that demand remains robust, with 2% more UK applicants to university this year, as well as an extra 2% from international students.
“It is shaping up to be a big couple of months for Unite’s reservations department. The company is targeting 4-5% rental growth next year, an assumption underpinned by at least 97% occupancy. This is still achievable, but will require a late demand push, and for the company to hold its nerve on pricing in anticipation of that late surge. If demand doesn’t appear, perhaps more students studying close to home, or universities fail to fill spots through clearing, or if competitors introduce widespread discounts in Unite’s target cities, the company may struggle to hit both of these metrics.”
