Unite Group Plc, the largest student accommodation provider in the UK, has been experiencing a slowdown in rental growth and a decrease in demand, particularly from international applicants. As of late December, the company had sold 95.2% of its beds for the upcoming academic year, a decrease from 97.5% at the same time a year prior. Reservations for the 2026/2027 academic year stood at 68%, down from 71% and 79% in the preceding two years, indicating a persistent weakening of demand.
This softening demand has led to writedowns in the value of Unite's student accommodation funds. The USAF fund saw a 0.7% dip in value, while its LSAV venture with Singapore's GIC Pte was marked down by 1.4% in the fourth quarter. These financial adjustments come as the company reported that 64% of beds for the next academic year had been sold, a reduction from 67% a year earlier. For the 2026/27 academic year, 74% of beds are reserved, compared to 76% a year prior.
In response to these challenges, Unite Group is looking to accelerate asset sales to streamline its portfolio and focus on higher-return properties, particularly those serving UK universities with stricter entry criteria. The company has engaged Goldman Sachs to advise on this disposal program and has completed or is in the process of $174.42 million (£130 million) in asset sales. An additional $666.90 million (£500 million) in assets are being prepared for sale over the next six to 12 months. The proceeds from these sales are expected to fund share buybacks, with $113.23 million (£85 million) of a $133.26 million (£100 million) buyback already completed or underway.
Despite the softened demand and asset adjustments, Unite Group maintains its annual occupancy and rental growth outlook, expecting occupancy and rental growth at the lower end of its 93%-96% and 2%-3% forecast ranges, respectively, for the 2026/27 academic year. The company also anticipates $11.99 million (£9 million) in cost synergies in 2026 and $22.65 million (£17 million) annually from 2027 due to the integration of Empiric Student Property.
