The supply of purpose-built student accommodation can’t keep pace with growing student demand as HMO landlords continue to leave the sector, according to the UK’s largest PBSA provider.
Unite Students reports that reservations for the 2023/24 academic year are at record levels, with 98% of rooms now sold, which CEO Richard Smith says reflects strong demand from both students and universities and the attractiveness of its fixed-priced all-inclusive offer.
“This supports an improvement in our rental growth guidance to around 7% for the 2023/24 academic year,” he adds. “Our strong leasing performance will continue to support our property valuations as the market adjusts to an environment of higher interest rates.”
Housing need
As traditdional HMO landlords leave the sector prompted by additional regulation and a looming overhaul of rental contract law, Unite is ‘uniquely positioned’ to address the housing need, says Smith, through its best-in-class operating platform, university relationships development and asset management capabilities.
Demand remains strong from both university partners and students booking accommodation on a direct-let basis, reports the firm, as universities increasingly rely on partners to meet their accommodation needs. It is committed to delivering four new schemes with a total development cost of £339 million.
Unite’s UK Student Accommodation Fund property portfolio – comprising 27,924 beds in 71 properties – has been valued at £2.9 billion, a 1.2% increase on a like-for-like basis during the last quarter.
Its London Student Accommodation Joint Venture investment portfolio – comprising 9,716 beds across 14 properties – is worth £1.9 billion, a 1.1% increase.
