Unite Group PLC (LSE:UTG) has stepped up its disposal programme as it refocuses its portfolio in line with its capital allocation framework.
In a first-quarter trading update, the owner, manager and developer of student accommodation in the UK said 74% of beds are now reserved for the 2026/27 academic year. This is slightly below the 76% reported last year. It still expects occupancy to come in at the lower end of the 93–96% range, with rental growth of 2–3%.
Progress on disposals continues. £130 million of assets have either been sold or are under offer. Around £500 million more is being marketed. The company said it remains on track to deliver £300–400 million of disposals in 2026.
Unite has spent £85 million of its £100 million share buyback programme so far. It expects to complete this by the end of June and may return more capital as further disposals are completed.
Joe Lister, chief executive officer, said: "Our strategy is focused on increasing our alignment to the UK's leading universities, where we see the strongest prospects for housing demand and future rental growth. To achieve this, we have already increased our disposal programme and the Board is exploring options to further accelerate our transition to a more focused, higher-quality portfolio, which would release surplus capital for reinvestment into share buybacks or University Partnerships consistent with our capital allocation framework.
"We are being proactive in driving income through both our partnerships with universities and direct-let sales channels, and reservations for the 2026/27 academic year have progressed in line with our expectations as set out at our Preliminary results."
Bookings at the Empiric portfolio are moving in line with expectations. 33% of rooms are now reserved for 2026/27. The company expects occupancy of around 85%. Integration work has delivered £3.0 million of annualised cost savings so far.
The group said it is well protected from recent energy price increases. Utility costs are fully hedged through 2026 and around 70% for 2027. All debt is either fixed or capped.
Property valuations moved lower during the quarter. The Unite UK Student Accommodation Fund was valued at £2.8 billion, down 1.7% on a like-for-like basis. The London Student Accommodation Joint Venture was valued at £2.03 billion, down 2.4%.