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UK: Unite Students has recorded a £417 million pre-tax loss for H1 this year, compared with a £186 million profit for the same period last year.
The numbers were affected by a £500 million revaluation of Unite’s property portfolio and “extremely challenging” build costs. Unite’s portfolio reduced in value by 6.4 per cent year-on-year, according to its half-year trading update.
The company announced plans for a sharper focus on the country’s top 20 student cities, which will see it sell more than £300 million worth of assets this year.
Unite plans to reinvest some of the sales proceeds into projects such as the 2,330-bed Cambridge Halls in Manchester and a 2,000-bed scheme at the Castle Leazes estate in Newcastle, which are being delivered in joint venture with Manchester Metropolitan University and Newcastle University respectively.
Together, these schemes make up the majority of Unite’s committed 6,000-bed pipeline and will generate £29 million of net operating income.
Between 15,000 and 20,000 units have been identified for disposal, which will see Unite exit nine non-core cities to create a “more focused, higher-quality portfolio”.
Unite, which acquired Empiric in January, currently has 72,000 beds under management but is aiming to reduce this to between 55,000 and 60,000 as part of an ongoing rationalisation of its portfolio.
The company warned that it expects the supply of student accommodation to tighten in the next few years, as new construction slows and HMO landlords leave the sector.
“Higher build costs and new regulation have made development of new student accommodation extremely challenging,” the firm said. adding that it would need to charge £300 per week, compared with its average £190 rate, to make new development viable outside of London.
Highlights:
- Unite Students has recorded a £417 million pre-tax loss for H1 this year, compared with a £186 million profit for the same period last year
- The numbers were affected by a £500 million revaluation of Unite’s property portfolio and “extremely challenging” build costs
- The company announced plans for a sharper focus on the country’s top 20 student cities, which will see it sell more than £300 million worth of assets this year
- Between 15,000 and 20,000 units have been identified for disposal, which will see Unite exit nine non-core cities
