Quarterly property valuation update Q2 2016 – 08 July 2016
Unite Students, the UK’s leading developer and manager of student accommodation, announces the quarterly property valuation of the Unite UK Student Accommodation Fund (“USAF”) and the London Student Accommodation Joint Venture (“LSAV”) as at 30 June 2016.
At 30 June 2016, USAF’s property portfolio was independently valued at £2,149 million representing a like-for-like increase of 1.0% during the quarter. The portfolio comprises 26,319 beds in 74 properties across 23 University towns and cities in the UK.
LSAV’s investment portfolio was independently valued at £758 million, up 1.0% in the quarter. LSAV’s investment portfolio comprises 4,636 beds across 12 properties in London and three properties in Edinburgh.
The increase in valuations is driven primarily by rental growth in the quarter. Valuation yields have remained stable and the USAF portfolio is now valued at an average yield of 5.6% and LSAV’s portfolio at 4.9%.
The result of the EU membership referendum held on 23 June has resulted in a period of uncertainty in relation to many factors affecting the property investment market. The latest valuations of the USAF and LSAV portfolios, detailed above, were taken before the referendum vote and therefore do not reflect this uncertainty.
However, EU students represent just 7% of all full-time students in the UK and only 9% of Unite’s customers. Applications from EU students are up 6% for the 2016/17 academic year and the Government has confirmed that students starting courses this year will have access and funding guaranteed for the duration of their courses. Given the strength of UK Higher Education and long-term growth in student numbers, we expect to see continued high demand for purpose-built student accommodation.
Unite’s portfolio continues to perform strongly with reservations for the forthcoming academic year at 87% compared to 86% at the same point in 2015. These reservations are supportive of rental growth of 3.5-4.0% and are in line with last year.
Joe Lister, Unite Students Chief Financial Officer, commented:
“The latest USAF and LSAV valuations reflect further rental growth achieved in the quarter as a result of strong bookings progress for the coming academic year. Despite the uncertainty created by the EU referendum, reservations for the 2016/17 academic year are 87%, marginally ahead of the position at the same time last year.”
For further information, please contact:
Joe Lister, Chief Financial Officer
Tel: +44 117 302 7045
Tel: +44 20 3772 2562