Student accommodation landlord Unite Group results for 2022 show performance ahead of pre-pandemic levels.
Adjusted earnings were up 48% to 40.9p per share, while the company matched the uplift in its dividend of 32.7p (2021: 22.1p).
The group’s portfolio was back to full occupancy in the 2022/23 academic year, with 3.5% rental growth. The outlook for the 2023/24 academic year is strong, with 83% already reserved (67% at same time last year).
EPRA net tangible asset (NTA) was up 5% to 927p per share.
Other highlights included:
- Portfolio valuation of £5,690m (Unite share), up 4.0% on a like-for-like basis
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Targeting 6%-7% rental growth for 2023/24
- Guidance for 5%-8% growth in adjusted earnings in 2023 to 43p-44p
- LTV of 31%, with interest rates 97% hedged, resulting in an expected 3.6% cost of debt in 2023 (2022: 3.4%)
Richard Smith, chief executive of Unite Students, commented: “We delivered a strong operational performance in 2022, with earnings and dividends surpassing their pre-pandemic level, driven by a return to full occupancy, improving rental growth and investment into our estate.
“The outlook for the business and the UK Higher Education sector is strong with demand underpinned by demographic growth, high application rates and increasing international student numbers. PBSA supply cannot keep pace with growing student demand at the same time as HMO landlords are leaving the sector.
“We are confident that new development opportunities will emerge over the next 12 months, which we remain uniquely positioned to deliver through our university relationships and development capability. Our strong leasing performance also supports earnings growth in 2023 despite higher interest and operating costs.
“We recognise the cost-of-living pressures being faced by students and parents and are confident that our fixed price all-inclusive offer, student support programmes and balanced approach to rental increases will continue to provide value for money.”
UTG : Strong student accommodation sector boosts Unite Group
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