Student accommodation developer Unite Group PLC (LSE:UTG) reported stronger rental growth for the new 2024/25 academic year but occupancy slightly below a year ago.
Like-for-like rental growth was 8.2% for the new batch of students, ahead of the 7% guidance given at the interims.
Occupancy is at 97.5%, with Unite noting the strong demand for university places this year, albeit with some normalisation after the exceptional prior year.
"This has been characterised by record demand from UK school leavers and resilient international demand in the face of changes to visa policy over the past year," it said.
Undergraduate acceptances for the group's core UK 18-year-old demographic were up 3% on last year, to record levels, which it said was driven by population growth and an increased acceptance rate.
For the 2025/26 academic year it currently expects 4-5% rental growth.
The FTSE 250-listed group said growth in rents was underpinning valuation increases for its blocks of flats, with the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) valuations up 1.5% and 1.6% respectively, and capital growth for the year to date up 4.4% and 5.3%.
United reiterated its full-year outlook for adjusted earnings per share at the upper end of its 45.5-46.5p range.
The shares fell 0.55% to 911.5p in early trading on Tuesday, down over 12% so far this year.
Analysts at Peel Hunt said this fall in the shares made them one of the weakest performers in the sector, currently priced at circa 20 times earnings, and offering a 4.0% dividend yield.