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UK: Unite Group has lowered rents in some cities for the current academic year because of falling demand.
The company’s overall rental income was down by 0.3 per cent. This is the first time in more than 25 years, apart from during COVID-19, that Unite, the UK’s largest student accommodation provider, has dropped rents. By cutting the rents, Unite has been able to fill 95.6 per cent of its 72,000 places this year, in comparison to 95.3 per cent last year.
In a trading update, the company said: “Strong cities with growing student demand and constrained supply continue to deliver robust operating performance. We have seen strong performance from new developments and major refurbishments delivered in 2025 and 2026, securing additional income in London, Bristol and Edinburgh. We have also seen a 15 per cent improvement in income in Nottingham, where targeted price reductions have driven materially higher occupancy.”
In response to falling demand, Unite has been selling some of its assets. The group’s portfolio valuation has fallen by almost four per cent between July and September to about £4.7 billion and has now dropped by around eight per cent this year.
“We have delivered reservations in line with our expectations as student demand and university behaviour evolved through this sales cycle,” said chief executive Joe Lister. “We are making good progress on our strategy to increase alignment to the UK’s strongest universities and are on track to deliver £300-400 million (Unite share) of disposals this year in a market which continues to adjust to higher interest rates. We have conviction that the assets which will form our future portfolio will continue to deliver a superior operating performance supported by growing demand at the strongest universities and constrained supply.”
The company says the integration of Empiric is progressing well, and it remains confident in delivering its targets for £9 million in cost synergies in 2026 and £18 million per annum of run rate synergies.
Highlights:
- Unite Group, the UK’s largest student accommodation provider, has reduced rents by 0.3% for the current academic year in response to weaker student accommodation demand
- This was the first rent reduction in more than 25 years, excluding the COVID-19 period
- Falling international student numbers and more UK students living at home are contributing to weaker demand for purpose-built student accommodation (PBSA), particularly in university cities including Nottingham, Leicester and Sheffield, where demand has been subdued
- Unite Group has achieved 95.6% occupancy across its 72,000 student beds for the current academic year, up from 95.3% in the previous year following the rent adjustments
Unite Group is considering selling some of its student residences as it responds to changing demand and reassesses its portfolio. The company’s portfolio valuation fell by almost 4% between July and September to approximately £4.7 billion, representing a decline of around 8% so far this year - The UK student accommodation sector faces continued uncertainty as providers and universities respond to changing international enrolment patterns and domestic students’ efforts to manage rising living costs
