Unite Group PLC (LON: UTG), the UK’s leading provider of purpose-built student accommodation (PBSA), delivered a confident trading update for Q1 2025, underpinned by high occupancy rates, strong rental growth, and strategic expansion through joint ventures.
Solid Q1 Performance with Robust Rental Momentum
For the 2024/25 academic year, Unite Group has already secured 70% of rooms under reservation — a strong indicator of student demand and a return to pre-pandemic seasonal booking patterns. This is in line with the company’s forward-booking strategy and compares favorably to prior years. The group reiterated its rental growth forecast of 5% for the year, driven by structural undersupply in key student markets and continued alignment with high-quality university partners.
The company noted that occupancy for the 2023/24 academic year remained high at 98%, with rental growth of 7.3%, reflecting not only strong demand from students but also effective operational management.
Advancing Strategic University Partnerships
A key highlight of the update is Unite’s continued focus on deepening relationships with top-tier universities through long-term partnerships and joint ventures. In Q1, the company progressed a new development joint venture (JV) with Manchester Metropolitan University (MMU), one of the largest institutions in the UK.
The proposed JV includes the development of a new 1,100-bed student accommodation property on MMU’s Birley Fields Campus. Subject to planning approval, construction is expected to commence in late 2025, with completion targeted for 2027. This project will further enhance Unite’s footprint in Manchester — a strategically important city with one of the highest student populations in the country.
These partnerships are central to Unite’s strategy, enabling long-term rental visibility, lower development risk, and alignment with universities’ own accommodation needs. As of Q1, around 70% of Unite’s beds are aligned to the UK’s top 30 universities — a key metric for the company’s investment case.
Development Pipeline and Portfolio Growth
Unite’s secured development pipeline remains strong at £1.2 billion, with active projects underway in major academic hubs, including London, Nottingham, and Birmingham. The company expects these developments to generate an attractive yield on cost of approximately 6.8%, contributing an estimated £72 million in net operating income (NOI) upon completion.
The company also continues to recycle capital efficiently, disposing of non-core assets and reinvesting in high-demand markets. The group remains disciplined in its capital allocation, targeting markets with limited PBSA supply and high full-time student growth.
Positive Outlook for FY2025
Management reaffirmed its adjusted earnings per share (EPS) guidance in the range of 47.5p to 48.25p for the full year 2025, underpinned by strong operational momentum and continued demand for PBSA. The group remains on track to deliver its long-term target of 8–10% total accounting return per year.
CEO Joe Lister commented, “Our performance in Q1 demonstrates the continued resilience of our business model and the strength of our university partnerships. With rising demand for high-quality, affordable student accommodation, Unite Group is well positioned for sustainable, long-term growth.”
Sector Context
Unite Group’s update comes amid growing structural demand for PBSA in the UK. Student numbers continue to rise, particularly among international students, while supply remains constrained by planning hurdles and rising construction costs. This supply-demand imbalance has enabled operators like Unite to deliver consistent rental growth and high occupancy.
Investors have increasingly looked to PBSA as a stable, income-generating real estate segment, especially as traditional office and retail sectors face ongoing uncertainty.
Conclusion
Unite Group’s Q1 trading update underscores its strong operational footing and strategic focus on university-aligned growth. With resilient demand, a robust development pipeline, and deepening institutional partnerships, the company remains a market leader in UK student accommodation — well-positioned to capitalize on the evolving needs of students and universities alike.
