Unite deepens ties to top institutions

The group has been building ties with top-ranked universities, counting on their continued appeal to provide a steady stream of students for the accommodation it develops. Nine-tenths of its portfolio is at high and mid-ranked universities, with more on the way. Management has signed partnerships with three top-25 institutions since the start of 2018 and is in discussions with 10 more.

Unite’s positioning in the market should help to offset at least some of the challenges looming over the sector. The UK’s departure from the European Union and demographic changes are expected to narrowly reduce the number of total students, while a government review into tertiary education is expected to be published in the coming weeks. The group is expecting to see increased pressure on courses judged to offer poor student outcomes, which will primarily impact institutions with lower financial strength and lower entry requirements.

While EPS has declined on a statutory basis, Unite typically reports earnings adjusted in line with the European Public Real Estate Association’s guidelines. On this basis, EPS was up 12.5 per cent to 34.1p.

Analyst Peel Hunt is forecasting an adjusted NAV of 830p per share for December 2019, up from 790p in 2018.