Unite Students sees strong growth amid student housing crisis

Student accommodation provider Unite Students has reported a strong first half of the year, driven by rising rental income and increasing demand for student beds. 

The company says the demand for high-quality university accommodation is particularly high in Russell Group cities.  

Unite is also expanding its development pipeline to £1.5 billion to meet this growing need, with a focus on strategic partnerships with universities. 

It has already formed a £250 million joint venture with Newcastle University to deliver 2,000 new beds. 

Landlords leaving the student accommodation sector 

However, the PBSA provider says that landlords leaving the student accommodation sector is also helping to fuel its success. 

It says that compared with pre-pandemic numbers, there are 100,000-150,000 fewer student HMO beds available. 

Unite's chief executive, Joe Lister, said: "We have had a strong first half, with 14% growth in adjusted earnings underpinned by full occupancy, rental growth and substantial investment into our platform and portfolio. 

"There is an acute and growing shortage of student homes, which is amplified by a shrinking private rental sector and depressed levels of new PBSA development.  

"Unite has a crucial role to play in partnering with universities to deliver new supply of high-quality, affordable accommodation where the need is greatest, which also frees up local family homes in the process.” 

Predicting more rental growth  

Unite is confident in its ability to maintain high occupancy levels of between 98-99% and is predicting more rental growth of 7% in the 2024/25 academic year.  

The company has also seen a growing number of universities partnering with them, accounting for around 58% of its beds for the next academic year. 

Mr Lister said: "Our development pipeline has grown to a record £1.5 billion for delivery into the strongest university markets, including our first university joint venture with Newcastle University.  

"We are uniquely positioned to secure further opportunities to support the growth of our university partners through our long standing and trusted relationships, in-house development capability and best-in-class operating platform." 

Earnings growth will accelerate 

The provider also says that as its development completions increase, then its earnings growth will accelerate from 2026. 

Unite also says in its results that there is 'significant unmet need' for high-quality, student homes offering value for money. 

The firm says it has planning consent secured for 2,400 beds in London, Bristol and Glasgow. 

'Demand for high-quality student accommodation' 

The managing director of Accommodation for Students, Simon Thompson, said: "Unite Students' results indicate a robust and growing demand for high-quality student accommodation in the UK.  

"This is evidenced by full occupancy rates, rising rental income and increasing partnerships with universities.  

"For student landlords, these results suggest a strong market with potential for rental growth." 

He added: "However, Unite highlights that a shrinking student accommodation sector is one reason why their results have been so impressive this year. 

"There's no doubt there are still opportunities for student landlords but having quality homes for rent will become increasingly important."