28 July 2026
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:
"Most acquisition deals in the real estate sector are said to be immediately accretive to earnings. However, Unite Group's acquisition of Empiric, which finalised at the beginning of this year, has not had this effect. While the company's rental income has increased 11% year-on-year, increased operating and financing costs mean that the company's earnings for the first half are flat compared to the same period last year. Combined with an increased share count as a result of the transaction means that the company's earnings per share (EPS) is down 7% compared to the same period last year.
"Unite is a company under pressure. The Empiric transaction came at just the wrong time, with the company looking to buy its peer just as the student accommodation market hit a peak in terms of rental growth rates and property valuations. And while rental growth remains just about positive, valuations have fallen sharply, with the company's combined portfolio value falling 6.4% in the first half of 2026 on a like-for-like basis, following a similar trend in 2025. That equates to a 9% drop in the reported net asset value (NAV) over six months.
"For investors, today's results are a confirmation of earlier fears, with the company share price materially underperforming the wider real estate investment trust market year-to-date. Whether you value the company on a NAV or EPS basis, today's results won't be easy reading, although nor will they come as a particular surprise given the performance in 2025. However, the EPS fall is likely to be a one-off following the increased share count in 2026, and we would expect the company to return to positive growth next year. Operationally, performance is steadying, with reservation rates for the upcoming academic year stable compared to this time last year, and the company reiterating its full year EPS guidance."
