Unite remains cautious despite its strong results

UNITE, the student accommodation provider, said full-year profits would likely beat management expectations and it was well placed to outperform its rivals, but remained cautious over the economic outlook.

In an update for the six months to 15 November, Unite said 99 per cent of its portfolio of 41,000 beds had been reserved for the 2011-2012 academic year, up from 97 per cent last year. Like-for-like operating profit grew 3.1 per cent in the period, with rental growth of four per cent.

The government’s introduction of higher tuition fees in 2012 is expected to cause university applications to fall, however Unite is still confident demand for accommodation can grow.

Mark Allan, Unite chief executive, said the group’s pipeline of six student accommodation projects were progressing well, but warned it would not commit to any new schemes until “the funding climate becomes clearer”.

Unite has £200m of debt facilities maturing on balance sheet in 2013 which it said needed to be addressed.

“It is a volatile market at the moment and it would be prudent to make sure we have got those things buttoned down before we commit to new development activity,” Allan added.