Unite Group portfolio 99% let for new academic year
Student accommodation manager and developer Unite Group updated the market on its current trading on Tuesday, confirming it was currently 99% let across its 49,000 bed portfolio for the 2017/18 academic year.
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The FTSE 250 company said beds under nomination agreements with universities had increased to 29,063, beds representing 60% of Unite's portfolio compared to 58% in the last academic year, with 40% directly let to students.
It said that sales performance would deliver annual rental growth at the mid-to-upper end of the board’s 3.0-3.5% expectations.
In September, Unite opened five new student residences - two in Edinburgh, and one in each of Oxford, Coventry and Liverpool, comprising a total of 2,152 beds.
All of the properties were completed on time and in-line with appraised costs.
The beds were now fully let with 67% of the beds secured on nominations agreements, with an average life of 13 years, delivering a yield on cost in-line with expectations.
Unite said it was continuing to make progress with the 2020 development pipeline and extending its university partnerships, having secured 1,000 beds under a lock-out agreement in an unnamed “strong regional market” for delivery in 2020 in line with the board’s return hurdles.
It added that it agreed the extension of its partnership with King's College, London, increasing the average life of its nominations agreements covering 2,355 beds from six years to nine years, with annual fixed uplifts of 3%.
Unite also extended the life of an agreement with the London School of Economics on a 455 bed property in London from 2030 to 2040, with annual RPI-linked uplifts.
“We are delighted to have delivered another year of full occupancy and strong rental growth,” said Unite CEO Richard Smith.
“This performance again demonstrates the value of our partnership approach with many of the UK's leading universities, built on our unique service platform and outstanding property portfolio.”