Unite Group said it has sold more beds than expected for the current academic year, and it cautioned on rent hikes due to inflationary pressure. The student accommodation developer has sold 99% of its beds for the 2022-23 academic year, up from 94.1% in 2020-21. It had expected to sell 97%. “In addition, the group has significant waiting lists in many of its largest markets, where there remains a shortage of high-quality, purpose-built student accommodation close to university campuses,” Unite said.
It has seen rental growth of 3.5% for the academic year. It expects further rental growth for 2023-24, targeting a climb in the range of 4.5% to 5.0%, in a bid to “offset inflationary cost pressures”. In addition, Unite said it has acquired 180 Stratford, a 178-unit purpose-built build-to-rent property in east London, for GBP71 million. For 2022, Unite now expects adjusted earnings per share at the top end of 40p to 41p guidance.
These results from the leading purpose built student accommodation (PBSA) supplier demonstrate the shortage of supply for the student market, despite securing a 3.5% increase in rents.
In our recent meeting with civil servants, to discuss the Government’s White Paper, we questioned why only the PBSA has been given an exemption to retain fixed term tenancies. We highlighted that PBSA is generally higher cost and does not offer the more community based solution, which many students seek.