Student accommodation REIT Unite Group PLC (LSE:UTG) raised the better part of a billion pounds in a little over a year and investors will want to see how these funds are being deployed in Tuesday’s third-quarter update.
Unite closed a £450 million capital raise this July, which added to the £300 million raised in July 2023.
AJ Bell investment director Russ Mould highlighted that M&A activity in the commercial property industry has started to perk up “as if to suggest some of the leading players think there may be some value to be had”.
“Attention here will focus on new developments and approvals – UNITE already runs over 150 properties across 23 cities in Wales, Scotland and England – as they ultimately feed into rental growth and therefore changes in the valuation of the total asset base across the wholly-owned portfolio,” he added.
As it stands, market sentiment towards Unite is strong. At a time when many if not most investment trusts are garnering double-digit discounts to net asset value (NAV), Mould highlighted that Unite’s is just 4.5% (as of 3 October).
Maintaining this valuation will be contingent on hitting the targeted 7% rental growth and 98-99% occupancy rate.
Results are due on Tuesday, 8 October.