Britain’s biggest student landlord is selling off some of its halls of
residence as
student booking rates dip
.
Unite Group has reserved just 74% of its 72,000 student beds for the 2026-27
academic year.
That figure stands below the 76% recorded at the same stage last year and
well short of the 80% or more the company would once have expected by
mid-April.
Industry analysts told The Times that they are not convinced the
accommodation provider can meets its revised targets for the next academic
year.
One said: “Unite needs a strong summer of [reservations]”, and another
warned that ‘The work ahead remains significant’.
Low occupancy levels
Occupancy looks like it will be towards the bottom end of a 93-96% range for
next year, with rent growth of 2%-3%.
In recent years, the firm’s halls regularly ran at more than 97% after the
pandemic.
The slowdown comes as overseas postgraduate numbers have fallen following
visa changes and more domestic students opt to live at home.
Pressure has been felt particularly in cities such as Leicester, Nottingham
and Sheffield, where Unite has cut rents in some buildings.
Increasing disposals
Chief executive Joe Lister said
the company’s strategy
is focused on working with the UK’s leading universities.
That’s where it sees the strongest prospects for student housing demand and
future rental growth.
To achieve this, Unite has already increased its disposal programme.
Along with £500 million of assets being earmarked for sale over the coming
year, Unite has already sold £130 million of its assets.
Advisers, including Goldman Sachs, have been brought in to accelerate the
shift towards a more focused, higher-quality portfolio.
Some of the proceeds will help fund a £100 million share buyback, of which
£85 million has already been spent.
Future student rental growth
Mr Lister said: “We have already increased our disposal programme, and the
board is exploring options to further accelerate our transition to a more
focused, higher-quality portfolio.”
However, portfolio valuations have slipped in the first quarter.
The Unite UK Student Accommodation Fund fell 1.7% to £2,798 million, while
the London Student Accommodation joint venture with GIC dropped 2.4% to
£2,034 million.
The integration of Empiric, bought last year, has delivered £3 million of
annual costs.
The Hello Student portfolio has only 33% of rooms reserved for next year,
down from 48% at this point in 2025.
Unite put the slower start down to a technology upgrade and the expiry of
some nomination agreements, but said recent interventions had lifted
bookings.
Mr Lister added that reservations for the 2026-27 academic year had
progressed in line with expectations.
He also said that Unite has taken ‘decisive action on costs’, including
cutting a fifth of its head office staff and halting two student development
schemes.
