25 February 2025
If you are covering The Unite Group’s latest financial results, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“Full year results from The Unite Group this morning contains few surprises as growth moderates from a strong period this time last year. Rental growth in 2024 of 8.2% is impressive, but likely to be the high water mark in terms of growth rates, with guidance for 2025 of in the 4-5% range.
“The company saw the valuation of its portfolio increase 4.8%, which while strongly positive, and ahead of the wider UK property market, is less than the rental growth alone, suggesting that there has been some widening of valuation yields during the year – likely more outward yield movement than the average UK commercial property. Values moving upwards are never a bad thing for investors, but there will be some concerns about the investment yield movement, given student accommodation generally trades at tight yields compared to the wider market. It is also worth noting that while the company’s net asset value grew 5.7% in the year, almost all of that growth occurred in the first half of the year, with values flat through the final six months, suggesting a marked deceleration in valuation growth over the year.
“That said, the company remains well-placed, with exposure to the UK’s best university towns and a strong balance sheet and is in a good position to weather any choppy waters to come from the economic climate.”
