Unite student housing suffers slump in property value as rents fall
Student accommodation giant Unite has suffered another drop in property values as higher interest rates and weaker rental income continue to weigh on the FTSE 250 landlord.
The company said on Thursday that the value of its UK Student Accommodation Fund fell four per cent in the third quarter to £2.8bn, while its London-focused joint venture saw a 3.4 per cent decline to £1.9bn.
The falls were driven by higher yields demanded by investors and weaker rental income at some properties, adding to pressure on the group after it reported a £417m pre-tax loss in July.
Unite, Britain’s largest student accommodation provider, said 95.6 per cent of its beds have been sold for the 2026 to 2027 academic year, slightly ahead of last year’s 95.3 per cent.
However, targeted rent cuts to attract tenants mean like-for-like rental income grew just 0.6 per cent, with average annual rents falling 0.3 per cent.
The company has been adjusting prices to boost occupancy, including in Nottingham, where the strategy helped lift income by 15 per cent.
Chief executive Joe Lister said Unite had delivered reservations in line with expectations despite changes in student demand and university behaviour.
“We are making good progress on our strategy to increase alignment to the UK’s strongest universities and are on track to deliver £300-400m of disposals this year in a market which continues to adjust to higher interest rates”, he said.
Unite presses ahead with £400m property sell-off
The landlord has already completed £200m of property sales this year, at an average six per cent discount to book value, with another £225m of assets under offer.
It plans to shrink its portfolio from 70,500 beds to between 55,000 and 60,000, concentrating on universities where demand remains strongest.
Unite also reported an improvement at Hello Student, the business acquired through its takeover of Empiric, where occupancy rose to 92 per cent from 87 per cent a year earlier.
The company maintained its full-year adjusted earnings guidance of 41.5p to 43p per share.
The update follows a difficult first half for Unite, when a £530m property revaluation helped push the landlord into a £417m pre-tax loss, reversing a £186m profit a year earlier.
Higher borrowing and construction costs have weighed on the wider property sector, with Unite previously warning that developing new student accommodation outside London had become increasingly difficult.