8 July 2026
If you are covering Unite Group’s trading update, please find comments below from Oli Creasey, head of property research at Quilter Cheviot:
“How Unite Group's Q2 trading update is received will depend on which metrics investors focus on.
“Operationally, there are growing signs that the business is turning a corner. Occupancy momentum has accelerated, leaving the company slightly ahead of last year's trajectory despite lagging behind it just three months ago. This improvement has allowed management to modestly upgrade occupancy guidance for the start of the 2026/27 academic year. A particularly encouraging development has been the performance of the Empiric portfolio, where occupancy is running 10% higher than this point last year.
“Occupancy and rental growth are often negatively correlated, although not always. Reflecting a greater emphasis on filling beds, Unite has trimmed rental growth guidance by around 100 basis points to 1-2% for the year. Offering pricing concessions to drive occupancy makes sense at this late stage of the letting cycle, however, it also suggests that this year hasn't been straightforward to navigate and that while this may be the first step on the road to recovery, it could be a long journey.
“The greater concern for some investors is likely to be property valuations and their impact on NAV. Despite improving occupancy and continued positive rental growth, Unite expects its property portfolio valuation to decline by 6-6.5% in H1 2026. This represents a marked deterioration from recent trends: property values fell by just 0.5% over the whole of 2025 and by around 2% in H2 2025. Investors could see a reduction in NAV of roughly 7.5% for the half year.
“While the shares are already trading at a substantial discount to the previously reported NAV, suggesting some of this deterioration may already be reflected in the valuation, the scale of the expected write-down is nevertheless a reminder that improving operational performance has yet to feed through to the balance sheet. The latest update points to a business making progress operationally, but one that is still facing meaningful headwinds from weaker property valuations.”
