Unite Group sees record early student booking

Shares in student accommodation provider Unite Group (LSE: UTE) fell 1.8% on Tuesday morning despite the company reporting a “strong start” to reservations for the 2024/25 academic year.

The company said 71% of its rooms have already been booked, a record high compared to 70% at the same time last year. Unite claims this early momentum positions it well to achieve its target of 5% rental growth for the upcoming student intake cycle.

A key driver has been higher demand from university partners, with 4,000 extra beds reserved versus last year. Unite is also on-site developing four new schemes comprising 2,000 beds for delivery over the next two years. Its flagship Meridian Square project in London remains on track to welcome students for 2027/28.

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However, its London Student Accommodation Joint Venture was valued at £1.92 billion, down 0.7% on a like-for-like basis during the quarter. Unite said the fall reflected its higher London weighting, “where greater increases in property yields have had a more significant negative impact on valuations.”

Unite continues tracking new development opportunities targeting attractive returns, stating it expects to add to its pipeline in the first half of 2024. The company has delivered a 10% share price return over the past year.