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Student accommodation firm Unite Group says full year rental growth on track

Unite said 98% of its accommodation has been let for the 2018/19 academic year

Unite Group
Unite opened seven new student residents in September, including two in Durham

Student accommodation provider Unite Group PLC (LON:UTG) said on Tuesday full year rental growth is in line with its target of 3-3.5% on the back of strong demand from partner universities.

The company also announced the issue of a 10-year £275mln senior unsecured bond at a rate of 3.5%, which will be used to fund general corporate purposes and the company’s development pipeline. 

Unite said 98% of its accommodation has been let for the 2018/19 academic year. The portfolio valuations of the Unite UK Student Accommodation Fund and the London Student Accommodation Fund are up 1.1% and 1.6% respectively.

READ: Unite Group targets portfolio growth as profits jump in first half

The EBIT margin is expected to reach 70% for the year, up from 68% in 2017, and the company aims to improve margins to 74% by 2021.

"It's great to see the momentum we achieved at the half year continuing,” said Unite Students chief executive Richard Smith.

“The supportive market dynamics are underpinned by a portfolio focused on universities where demand is strongest and our growing university partnerships. We have delivered on our efficiency targets in 2018. Going forward, we expect to deliver further efficiency gains, primarily through growing the scale of the portfolio under management."

In September the group completed the disposal of 13 properties for £180.5mln and opened seven new student residents in Birmingham, Bristol, Durham, Newcastle, Portsmouth and Sheffield. Beds at the new properties are fully let to students attending high and mid-ranked universities and 52% of these beds are secured on nomination agreements with an average life of 10 years. 

Quick facts: Unite Group

Price: 1296 GBX

LSE:UTG
Market: LSE
Market Cap: £4.71 billion
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