Shortage of high-quality student homes drives growth at Unite
In a half-year update, the student accommodation provider Unite Group said strong rental growth helped drive up the value of its portfolio.
The real estate investment trust (REIT), which specialises in purpose-built student accommodation (PBSA), saw its rental income rise by 5.1 per cent in the first half of the year as demand for its rooms and apartments continued to exceed constrictive supply.
The group said it is confident in delivering 98 per cent to 99 per cent occupancy for the 2024/25 academic year, with rental growth of seven per cent expected for the year.
The upward pressure on rentals also increased the value of its managed portfolios. Its Unite Students UK Accommodation Fund (USAF) reported a value uptick of 2.8 per cent between January and the end of June.
Meanwhile, the value of its parallel London Student Accommodation Joint Venture (LSAV) grew by 3.6 per cent.
Joe Lister, Unite Students’ CEO, 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.”
The trust’s performance reflects the robust health of the PBSA sector.
Despite this, according to Savills, almost 100,000 new beds are needed in London alone, as the supply of rooms remains short of demand due to growing student numbers.
The REIT also said it remained unaffected by the previous Conservative government’s decision to deny of visas for students’ dependents and family members, given the single-occupancy nature of its homes.