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Full year results for the year to 31 December 2018 – 27 February 2019

26 February 2019



Richard Smith, Chief Executive of Unite Group, commented:

“2018 was another successful year for Unite. We made good progress against all of our core objectives and continued to deliver sustainable growth in our recurring earnings and cash flows. Our strong results remain underpinned by our brand, our sector-leading operating platform, the quality of our portfolio, our deep and valuable University relationships and sector fundamentals. These qualities set us apart in a sector that remains undersupplied and, more than ever, has a need for accommodation that is delivered efficiently and with a focus on value for money.

“We continue to work in partnership with and align our portfolio to the strongest Universities in the UK, where student demand is both sustainable and at its greatest with 90% of our portfolio located at these Universities. This strategy has led to a further improvement in the quality and security of our income, with 60% of beds underpinned by agreements, in line with our target. University partnerships, alongside our development pipeline, are key drivers of continued growth and forward visibility of our earnings.

“Looking ahead, we maintain our positive outlook for the business. Reservations for the 2019/20 academic year are in line with record levels for this time of year, supporting our like-for-like rental growth guidance of 3.0-3.5%. Our secured development and University partnerships pipeline of 6,579 beds being delivered over the next four years will further improve operating efficiency and generate significant earnings growth.

“Whilst the backdrop of the ongoing Brexit negotiations and the impending review into Higher Education funding provide some uncertainty, our strategy of aligning to the best Universities and providing good-quality, value-for-money accommodation for resilient segments of the market reinforces our long-term confidence in the business. This confidence is reflected in our 28% increase in the full-year dividend.”

Operational delivery drives continued strong financial performance

Year ended

31 December 2018

31 December 2017


EPRA earnings*




EPRA earnings per share*




Profit before tax




Dividend per share




Total accounting return*




Like-for-like rental growth*




EBIT margin




As at

31 December 2018

31 December 2017


EPRA NAV per share*




Net debt*




Loan to value*





EPRA earnings up 25% to £88.4 million, 34.1p per share (2017: £70.5 million and 30.3p)

  • 98% occupancy and like-for-like rental growth of 3.2% (2017: 99% and 3.4%)
  • Increased dividend, up 28% to 29.0p, driven by growing earnings and higher payout
  • Profit before tax up 7% to £245.8 million (2017: £229.4 million)
  • 13% total accounting return (2017: 14%)

Record level of reservations for 2019/20 academic year supports rental growth outlook

  • Reservations for 2019/20 academic year at 75% in line with record levels in 2017
  • Rental growth outlook for 2019/20 of 3.0-3.5% on a like-for-like basis

Earnings growth underpinned by operating platform, nomination agreements and development and partnerships pipeline

  • Nomination agreements with Universities on 60% of beds (2017: 60%) with proportion benefitting from contractual uplifts up to 76% from 71%
  • New nominations secured on 50% of the 2018 openings (70% expected in 2019), including three new agreements with top 25-ranked Universities
  • Secured development and University partnerships pipeline of 6,579 beds for delivery over the next four years, generating an attractive 7.0% yield on cost
  • Together with rental growth, these new openings net of disposals could add 13p to 17p to earnings per share on completion of the pipeline
  • Leveraging operating platform to drive further efficiencies – 2018 targets delivered and set new EBIT margin target of 74% by end of 2021

High-quality portfolio aligned to the strongest Universities where intake continues to grow

  • Significant progress with University partnerships – two deals secured in 2018, one deal secured since the year end and further pipeline emerging through 10 active discussions
  • Disposal of 3,436 beds for £180 million (£85 million Unite share) to support increased focus on high-quality Universities
  • 90% of Unite’s portfolio located at high and mid-ranked Universities
  • Continue to see a number of attractive development and University partnership opportunities in line with our target returns and expect to add to the pipeline whilst maintaining financial discipline

Strong financial position

  • LTV of 29% (2017: 31%), cost of debt reduced to 3.8% (2017: 4.1%)
  • Transition to unsecured borrowing structure following issuance of £275 million unsecured corporate bond, backed by investment-grade credit rating from Standard & Poor’s and Moody’s
    * The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). These financial highlights are based on the European Public Real Estate Association (EPRA) best practice recommendations and these performance measures are published as they are intended to help users in the comparability of these results across other listed real estate companies in Europe. The metrics are also used internally to measure and manage the business and to align to the performance related conditions for Directors’ remuneration. See glossary for definitions.
    Read the complete Preliminary Results Statement


There will be a presentation for analysts this morning at 08.15 at the Andaz London Liverpool Street. An archived webcast is available at:

For further information, please contact:
Unite Students

Richard Smith / Joe Lister / Paul Richmond          
Tel: +44 117 302 7005

Justin Griffiths / Alison Watson / Mazar Masud     
Tel: +44 20 7250 1446