Unite property valuations drop across USAF and LSAV funds in Q2

(Sharecast News) - Student accommodation provider Unite Group reported a drop in property valuations across its USAF and LSAV funds in the second quarter. Unite said USAF's portfolio declined 2.2% on a like‑for‑like basis, while LSAV fell 3.7%, driven by yield expansion and limited transactional evidence in the investment market. Unite expects a 6% to 6.5% first‑half valuation deficit across its wholly-owned investment properties.

Despite the valuation hit, Unite said trading ahead of the 2026/27 academic year remained solid, with 86% of Unite beds reserved, up from 85% a year earlier, as its Empiric (Hello Student) portfolio continued to improve, with reservations rising to 71% from 61% last year. Unite now expects at least 87% occupancy for 2026/27 and said rental growth should match its core portfolio.

Unite reaffirmed FY26 adjusted earnings per share guidance of 41.5 to 43p, supported by solid first‑half trading and successful short‑term letting of vacant rooms, and also guided to 0% to 2% like‑for‑like income growth, now expected to be driven by 94 to 96% occupancy and 1 to 2% rental growth.

The FTSE 250-listed group also said it remained confident of delivering £300m to £400m of disposals this year. So far, £130m has been completed at a 4.8% yield, with around £500m of assets currently being marketed. Unite also noted that it had completed £165m of share buybacks in H1 at an average price of 505p.

Chief executive Joe Lister said: "We have seen strong progress in reservations for the 2026/27 academic year since our last update in May. This reflects our strong direct marketing and sales performance together with targeted adjustments to pricing in selected markets.

"We are also making good progress on our strategy to increase alignment to the UK's leading universities and are on track to deliver £300 to £400m (Unite share) of disposals this year in support of this objective. Our transition to a higher-quality portfolio, serving the UK's strongest universities, is accelerating, enhancing our ability to deliver future rental growth."

As of 0905 BST, Unite shares were down 1.83% at 510p.





Reporting by Iain Gilbert at Sharecast.com

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