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Unite Group “Well Positioned” for Growth in Student Sector Post-Brexit

The Unite Group has reported a raise in earnings, net asset value and dividends in the first half of 2016, saying it remains confident opportunities will continue to rise in the student property sector following Brexit.

The Unite Group has reported a raise in earnings, net asset value and dividends in the first half of 2016, saying it remains confident opportunities will continue to rise in the student property sector following Brexit.

The student property developer has reported an increase in their EPRA earnings (a measure of its recurrent income) by £6.5 million, or 22%, to £36.1 million in 2016’s Q1.


Furthermore, it also reported an increase in their EPRA Net Asset Value (NAV), a measure of the fair value of a company on a long-term basis, by 7% to 620p – equating a total accounting return of 8.7%.


Also, the firm reported that their relationship with universities has strengthened as 71% of new openings and 57% of all rooms were let through University agreements - laying a solid foundation for future earnings, says the firm.


In light of these positive performance indicators, the Unite Group plans to add 2,100 beds to the “secured pipeline for delivery” in 2018 and 2019, further supporting growth.


Growth is also said to be fuelled by the record demand expected for the academic year 2016/17. The Group expects rental growth for the upcoming academic year to continue in the 3-4% range, in line with the previous years.


Unite has stated that 89% of their rooms are already reserved as of July 25th, and with rental levels in line with the previous year, the Group is confident they could see their value grow by a further 14 to 19 pence in the next few years.


Commenting on the results, Chief Executive Richard Smith said: “The demand:supply outlook for student accommodation remains favourable and our earnings growth trajectory is underpinned by our efficiencies of scale and a high quality development pipeline, focused on cluster flat accommodation with a lower price point, where the rental growth outlook is strongest.


“We continue to assess the broader impacts on the market and maintain a disciplined approach to investment and development activities.


“We remain confident of delivering meaningful year on year earnings and dividend growth over the next few years and are well placed to benefit from opportunities that may emerge from this period of uncertainty.”


During previous market volatility, the yields in student housing have proved much more resilient than those found in residential and commercial markets, due in part to the continued need for a greater supply of student housing in the UK.