UK Real Estate HY26 Results Preview

Research evidence excerpt

UK Real Estate HY26 Results Preview

We think investors will look for evidence that disposals are genuinely improving portfolio

quality. If realised yields are closer to the company’s implied 5.5-6.0% range, near-term

earnings and NAV may be better than feared. But that would likely mean the mix is

weighted to stronger assets, development land or non-core disposals, rather than a

clean exit from weaker regional assets. A 7% blended yield still feels more realistic if the

aim is to materially improve the portfolio.

Hello Student should benefit from the same demand signal. Hello Student

reservations improved to 71%, up 10pp y/y, and Unite raised expected occupancy to

above 87% from c.85%. Synergy guidance remains £9m in 2026 and £17m annually

from 2027.

The June application data are particularly relevant here. Chinese demand is important

for Empiric / Hello Student, given the portfolio’s 40% exposure to Chinese students. The

key question remains whether improved lease-up is being driven by genuine demand

strength or more aggressive pricing. The latest application data make the demand

explanation more credible.

Renters’ Rights Act leaves incremental upside potential for FY27E EPS. The one-

off impact for FY26E is included in guidance, but the company hasn't disclosed the

precise impact. The impact will likely reverse in FY27E when the PBSA exemption comes

into effect - and although likely to be relatively small - adds some more upside to the

growth trajectory into the following year.

Guidance and consensus: EPS likely to move further ahead; NAV remains the

challenge. We expect FY26 EPS guidance of 41.5-43.0p to be reiterated, with an upside

risk that the company could guide towards the higher end if occupancy continued to

trend well following the 2Q trading update.