Unite Group upbeat on strong valuation and sales performance

(Sharecast News) - Student accommodation owner, manager and developer Unite Students released its quarterly property valuation for the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV) as at 31 December on Thursday.
The FTSE 250 company said USAF's property portfolio was independently valued at £2.85bn, representing a like-for-like increase of 0.8% during the quarter and 3.1% for the year.

It said the portfolio comprised 30,209 beds in 79 properties across 22 university towns and cities in the UK.

LSAV's investment portfolio, meanwhile, was independently valued at £1.34bn, which was an improvement of 2.7% in the quarter on a like-for-like basis and 7.4% for the year.

That investment portfolio comprised 8,354 beds across 12 properties in London, and Aston Student Village in Birmingham.

The board said the like-for-like valuation increase was primarily driven by rental growth in USAF, and a combination of rental growth and yield compression in LSAV.

Overall the USAF portfolio was valued at an average yield of 5.3%, and the LSAV portfolio was valued at an average yield of 4.4%.

The board said the positive valuation performances in USAF and LSAV were further supported by a "strong start" to the 2020-2021 sales cycle, which was now well underway.

Across the group's entire property portfolio, 68% of rooms were now sold for the next academic year, up from 67% at the same time last year.

"The USAF and LSAV portfolios have both performed well in 2019 with property valuation growth of 3.1% and 7.4% respectively," said chief financial officer Joe Lister.

"Returns have been delivered through high levels of occupancy, rental growth and have been enhanced by yield compression in London.

"Bookings for the 2020-2021 academic year have started strongly with 68% of rooms already sold, ahead of the previous year, reflecting the continued strong demand for places at the high-quality universities with which we partner."

At 0902 GMT, shares in Unite Students were down 0.88% at 1,234p.