Strong student demand drives rental growth for Unite
Leading student accommodation provider Unite Students says it is experiencing a surge in demand with 86% of its beds already booked for the 2024/25 academic year.
That's down slightly from the previous year's record of 90%.
The purpose-built student accommodation (PBSA) provider says this strong demand and projected rent growth of at least 6%, is bolstering its property values.
Unite has also announced planning approvals for 1,450 new beds in Bristol and London.
Student demand is strong for the 2024/25
The firm's chief executive, Joe Lister, said: "Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes.
"Together with our alignment to the UK's strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations."
He added: "We continue to progress the delivery of our record £1.3 billion development pipeline, securing planning approvals on two schemes in London and Bristol.
"These projects will deliver much needed new student homes in two of the UK's strongest university cities."
UK visa regulations haven't affected student demand
The PBSA provider also says that tighter UK visa regulations haven't affected demand from international students.
It says that the proportion of rooms let directly to overseas students for the 2024/25 academic year is currently 13%, which is roughly consistent with the 15% figure from the same period last year.
Mr Lister says it is this international student demand that will help deliver the expected 6% growth in rent and full occupancy for the next academic year.
He says that Unite's strategy for rent growth is designed to yield long-term, sustainable returns while maintaining affordability for students.
Unite has also revealed rising demand from universities, with various agreements leading to an extra 1,000 beds this year.
Planning approvals for two development projects
The firm's annual report also reveals that Unite has secured planning approvals for two development projects.
They are the Freestone Island project in Bristol, a 500-bed facility near the University of Bristol's new Temple Quarter Enterprise Campus, with land for the site being purchased soon and project completion set for the 2026/27 academic year.
Meridian Place in Stratford has also received planning permission and full planning consent is expected with the 952-bed project being ready for the 2028/29 academic year.
Other projects include a tie-up with Newcastle University at Castle Leazes in the city to demolish existing buildings and create 2,000 new beds.
Unite also stresses it is pursuing other development opportunities and university partnerships in London and other ‘strong regional markets’.
The report also highlights that Unite is selling a portfolio worth £180 million in the coming months, and its share is £75 million.
Good news for student landlords
Simon Thompson, the managing director of Accommodation for Students, said: "There's some good news in Unite's annual report that student landlords should appreciate.
"Along with the levels of strong demand, the UK visa regulations aren't putting international students off from travelling to the UK for their studies.
"And the student accommodation sector as a whole will benefit from that."
He added: "There's obviously still a lot of investment for the PBSA sector but student landlords with quality accommodation can look forward to strong tenant demand for years to come."
