Unite Group reiterates rental guidance after solid Q1

(Sharecast News) - Student accommodation manager and developer Unite has said it is still confident in hitting rental growth targets for the next academic year while property values held more or less stable in the first quarter. The company reiterated its guidance to deliver rental growth of "at least 6%" for the 2024/25 academic year, down from 7.4% last year.

Demand is said to be "strong", with the percentage of beds sold for the upcoming year rising to at 86% by 31 March, up from 80% at the time of its full-year results in February, though down from 90% the same time the year before.

By the end of March, the Unite UK Student Accommodation Fund (USAF) was valued at £2.98bn, a 0.5% reduction on a like-for-like basis, as rental growth of 1.7% was offset by a 2.0% negative impact from the loss of Multiple Dwelling Relief (MDR) - the tax relief that was abolished as part of the Spring Budget which had benefitted a number of Unite's properties.

Meanwhile, the London Student Accommodation Joint Venture (LSAV) valuation increase 0.8% to £1.94bn, as 1.3% rental growth offset the 0.3% negative impact of losing MDR.

"Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes," said chief executive Joe Lister.

"Together with our alignment to the UK's strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations."