Unite Group plc: UK Student Accommodation Update

Research evidence excerpt

Unite Group plc: UK Student Accommodation Update

12/26E 42.51 42.11

The presentation highlighted a continued slowdown in new PBSA development, with 12/27E 43.40 42.34

beds submitted for planning down c.54% YoY and future supply growth concentrated 12/28E 44.07 43.43

in a relatively small number of markets, notably London, Birmingham and Glasgow.

Planning activity remains focused on a handful of cities, while development economics Zachary Gauge

Analystand planning constraints continue to act as barriers to wider expansion. Nevertheless,

zachary.gauge@ubs.com

supply growth has been supplemented by BTR stock, with StuRents estimating that 30% +44-20-7901 5534

of new BTR space is occupied by students. From a leasing perspective, occupancy trends

broadly resemble last year, with recent data points becoming more encouraging. Cluster Charles Boissier, CFA

Analystoccupancy has improved YoY over the last two months, while studio performance has

charles.boissier@ubs.com

also shown modest strengthening. However, performance remains highly localised, with +44-20-7568 4415

significant differences both between cities and individual assets, highlighting the

importance of market-by-market analysis rather than relying solely on national averages. Nadir Rahman

Analyst

nadir.rahman@ubs.com

Market outlook – modest growth still sufficient +44-20-7567 1750

Richard's view was that sector fundamentals have normalised relative to the

exceptionally strong conditions experienced during 2021-23, with the gap between

demand growth and supply growth having narrowed materially. However, the market

does not require particularly strong demand growth to maintain balance; StuRents

estimates that only c.0.5% annual demand growth is needed to absorb expected supply

additions.