Unite targets Empiric in £705m acquisition to strengthen its student housing dominance
Leading purpose-built student accommodation (PBSA) provider, Unite Group, has launched a £705 million bid to acquire its smaller rival, Empiric Student Property, in a move that would solidify its position as Britain's largest student landlord.
The Bristol-based FTSE 100 company, which manages 68,000 beds across university towns from Bournemouth to Edinburgh, announced a cash-and-shares offer, proposing 30p in cash and 0.09 Unite shares per Empiric share, valuing each at approximately 106p.
Empiric, a London-based firm with 7,700 beds and a focus on second, third-year and postgraduate students, has granted Unite access to its financial books, indicating the board views the offer as potentially acceptable.
The two companies have until 3 July to finalise a firm offer or abandon the deal, as the City Code on Takeovers and Mergers dictates.
Unite and Empiric is a strategic fit
A Unite spokesperson highlighted the strategic fit, stating: "The addition of Empiric's high quality, complementary portfolio would create a combined group with enhanced scale and growth aligned to the UK's strongest universities.
"With the potential synergies that could be unlocked by Unite's operating platform, the possible offer has the potential to deliver accretion to earnings and shareholder returns while maintaining balance sheet strength."
Empiric's spokesperson confirmed: "On the basis of the proposal, the board has agreed with Unite to enter an initial period of due diligence.
"A further announcement will be made as appropriate."
Higher education landscape is changing
The proposed acquisition comes as both companies navigate a challenging landscape in higher education.
Together, they own £7.1 billion in student halls, generating £482 million in rental income last year.
Their success stems partly from stricter regulations forcing smaller student accommodation landlords out of the market, coupled with rising student numbers pushing up rent inflation.
However, both firms have noted slower letting rates for the upcoming academic year starting in September, compared to 2023 and 2024.
This has prompted a focus on properties near prestigious, high-tariff universities, where demand is expected to remain robust.
Unite sells nine-strong portfolio
Unite's bid follows its recent disposal of nine student accommodation properties, comprising 3,656 beds, to an affiliate of Lone Star Funds for £212 million.
The sold portfolio, including assets in Aberdeen, Leicester, Leeds, Nottingham and Sheffield, had an average property age of 19 years.
The sale aligns with Unite's strategy to prioritise locations with top-tier universities for sustainable rental growth, including a complete exit from the Aberdeen market.
However, despite the student property sector’s growth, challenges loom.
Some universities face financial difficulties, and a decline in international student numbers last year — the first in a decade — has raised concerns about the long-term appeal of UK degrees.
The outcome of Unite's bid could reshape the student housing market, creating a powerhouse with unparalleled scale and focus on premium university locations.
Role for smaller student landlords
Simon Thompson, the managing director of Accommodation for Students, said: "For student landlords, this potential merger points to a consolidating market where scale and strategic location are paramount.
"Smaller operators may face increased pressure as larger players like Unite expand their dominance."
He added: "To many, the student housing sector is becoming a game of giants, where only those with deep pockets and prime locations can thrive.
"However, there is still a role for smaller landlords offering quality student accommodation at attractive rents because not every student can afford or wants to live in PBSA units."
