Unite Group (UTG.L): Headwinds continue to persist, accelerated disposals

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Unite Group (UTG.L): Headwinds continue to persist, accelerated disposals

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28 Jul 2026 02:51:31 ET │ 10 pages

Unite Group (UTG.L)

Headwinds continue to persist, accelerated disposals

CITI'S TAKE

Buy EPS down -8% YoY and NAV down -9% in H1. Management note a

portfolio refocus to c20 cities and c55,000-60,000 beds compared to Price (27 Jul 26 16:30) £5.58

c72,000 beds as at H1 2026. Identified disposal pipeline of between Target price £9.06

15,000-20,000 beds and majority assets expected to be marketed in Expected share price return 62.4%

2026. Management expect a +3-4% increase in demand for student Expected dividend yield 6.8%

accommodation over 2026/27 concentrated in cities with stronger Expected total return 69.2%

universities where students are more likely to stay away from home.

Market Cap £2,868M FY2026 Adj.EPS guidance of between GBp41.5 to 43 was reiterated. We

US$3,812M expect headwinds to persist in H2 weighing on rental growth and asset

values.

Adj. EPS down -8% YoY — Adjusted earnings at £142Mn were down -2% YoY Aakanksha AnandAC

driven by higher rental income from Empiric acquisition, pipeline deliveries and LFL +44-20-7508-1045

rent growth more than offset by higher finance costs and disposals. Adjusted EPS at aakanksha.anand@citi.com

GBp27.1 was down -8% YoY including dilution from higher number of share post

Aaron GuyEmpiric acquisition (+57Mn shares) and subsequent accretion from £165Mn (-

32.7Mn shares) share buyback. LFL rents were up +1% with rental growth offsetting +44-207-986-1739

the lower occupancy impact. NOI margin at 69.7% (2025: 68.7%). EBIT margin at aaron.guy@citi.com

67.1% (H1 2025:71.7%). Cost of debt was 4% (2025: 3.9%) and expected to increase Temitayo Olayinka

to 4.3% in2026. Interest coverage at 4.8x (2025: 6x).