Unite increases focus on top universities

Unite’s property portfolio is increasingly focused on high- and mid-ranked universities, which should be better insulated against current trends. Such institutions accounted for 85 per cent of the total in 2017, up from 82 per cent the year before. This will grow further once the existing plans for development, acquisitions and disposals have been carried out. Indeed, the development pipeline looks healthy, with a secured and university partnership pipeline of 9,400 beds over the next four years. The group intends to fund developments at Oxford Brookes and Kings College London through placing new shares, raising £170m.

The group has decided to increase its dividend payout ratio. From 2018 onwards, it will pay 85 per cent of earnings out in dividends. Analysts at Peel Hunt note that this means the yield on the shares could be more than 5 per cent by 2020. It forecasts an adjusted net asset value (NAV) per share of 776.5p at December 2018 (from 720p in 2017).