Interim results for the six months ended 30 June 2024

Joe Lister, Chief Executive of Unite Students, commented:

“We have had a strong first half, with 14% growth in adjusted earnings underpinned by full occupancy, rental growth and substantial investment into our platform and portfolio.

“There is an acute and growing shortage of student homes, which is amplified by a shrinking private rental sector and depressed levels of new PBSA development. Unite has a crucial role to play in partnering with universities to deliver new supply of high-quality, affordable accommodation where the need is greatest, which also frees up local family homes in the process. Our development pipeline has grown to a record £1.5 billion for delivery into the strongest university markets, including our first university joint venture with Newcastle University. We are uniquely positioned to secure further opportunities to support the growth of our university partners through our long standing and trusted relationships, in-house development capability and best-in-class operating platform.

“Our alignment to the UK’s strongest universities, alongside a growing range of attractive investment opportunities and a more supportive policy environment, puts us in a strong position to deliver continued long-term growth for shareholders.”

HIGHLIGHTS

Growing earnings, strong demand for 2024/25

·      Adjusted EPS up 4% to 28.7p (H1 2023: 27.5p)¹, IFRS diluted EPS up 132% to 64.4p (H1 2023: 27.8p)

·      Confident in 98-99% occupancy and rental growth of at least 7% for 2024/25 (2023/24: 98% and 7.4%)

·      Growing demand from university partners, accounting for c.58% of beds for 2024/25 (2023/24: 53%)

Positive outlook supports accelerating earnings growth

·      FY2024 EPS guidance increased to upper end of 45.5-46.5p range, 4-5% YoY growth (2023: 44.3p)

·      Strongest demand for high-quality universities to which Unite is aligned

·      Earnings growth to accelerate from 2026 as development completions increase

Universities seeking partners to address housing shortages

·      Significant unmet need for high-quality, value-for-money student homes

·      New PBSA supply 60% below pre-pandemic levels and 100,000-150,000 fewer HMO beds available

·      Unique capability to deliver new beds in strategic partnerships with universities

·      £250 million joint venture with Newcastle University to develop 2,000 high-quality beds progressing well

·      Confident of securing second university joint venture in next 6-12 months

Record and growing pipeline with investment focused in the strongest markets

·      £1.5 billon pipeline in Russell Group cities at 6.7% yield on cost

·      Planning consent secured in H1 for 2,400 beds in London, Bristol and Glasgow

·      New acquisition of £170 million consented development in Zone 1 London for delivery in 2027

·      Portfolio enhanced through £47 million of refurbishments at 8% yield on cost in 2024

·      Completed disposals of £184 million (Unite share: £76 million) at 6.2% yield to improve portfolio quality

Rental growth driving total accounting returns

·      EPRA NTA up 5% to 969p (2023: 920p) and 7.9% Total Accounting Return in H1 (H1 2023: 2.4%)

·      £8.7 billion portfolio valuation (Unite share: £5.7 billion), up 2.7% on a like-for-like basis

·      Expect Total Accounting Return of around 12% pre-yield movement in FY2024

·      LTV of 26% at 30 June 2024³ and net debt to EBITDA of 5.7x (December 2023: 28% and 6.1x)

¹ Adjusted earnings and adjusted EPS remove the impact of SaaS implementation costs from EPRA earnings and EPRA EPS. See glossary for definitions and note 7 for calculations and reconciliations

² The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). The Group uses alternative performance measures (APMs), which are not defined or specified under IFRS. These APMs, which are not considered a substitute for IFRS measures, provide additional helpful information and include measures based on the European Public Real Estate Association (EPRA) best practice recommendations. The metrics are also used internally to measure and manage the business. The adjustments to the IFRS results are intended to help users in the comparability of these results across other listed real estate companies in Europe and reflect how the Directors monitor the business. See glossary for definitions

³ Excludes IFRS 16 related balances recognised in respect of leased properties. See glossary for definitions

⁴ Wholly-owned balances plus Unite’s share of balances relating to USAF and LSAV

⁵ Like-for-like properties owned at both 30 June 2024 and 31 December 2023

PRESENTATION

A live webcast of the presentation including Q&A will be held tomorrow at 8:30am BST for investors and analysts. The webcast can be accessed via https://brrmedia.news/UTG_IR24 and will be available for playback on our website (https://www.unitegroup.com) after the event.

To register for the event or to receive dial-in details, please contact unite@powerscourt-group.com.

For further information, please contact:

Unite Students