Unite posts £417m loss and plans portfolio reduction

Unite Students reported a £417m pre-tax loss in the first half, a result of a £530m property revaluation that wiped out a £186m profit from the same period last year. The Bristol-headquartered FTSE 250 landlord, Britain's largest student accommodation provider, is now reshaping its portfolio and expects £300-400m of disposals this year to handle sector-wide pressures from raised borrowing and construction costs.

Booking performance and rental trends

Despite these financial headwinds, Unite secured high occupancy for the upcoming academic year. The company has reserved 95.6 per cent of its beds for the 2026 to 2027 year, a marginal increase from 95.3 per cent a year earlier. Strategic rent cuts to secure tenants, however, resulted in modest income growth. Like-for-like rental income rose by just 0.6 per cent, with average annual rents dropping by 0.3 per cent. Chief executive Joe Lister said: "Unite had achieved bookings in line with forecasts despite shifts in student demand and university practices."

Portfolio reshaping through disposals

A central part of Unite's strategy involves reducing its overall bed count. The company intends to shrink its portfolio from 70,500 beds to between 55,000 and 60,000, focusing on universities where demand remains most robust. To achieve this, Unite is actively selling assets. It has already completed £200m of property sales this year at an average six per cent discount to book value, with another £225m of assets under offer. Proceeds from these disposals will fund remaining spending on committed developments and reduce debt.

Regional performance and acquisitions

Performance varied across the portfolio. The Hello Student business, acquired through Unite's takeover of Empiric, saw occupancy rise to 92 per cent from 87 per cent a year earlier. In specific markets like Nottingham, targeted pricing modifications to boost occupancy drove income up by 15 per cent. The company has previously warned that developing new student accommodation outside London has become increasingly challenging.

Valuation and earnings outlook

Unite's property valuations continued to face pressure. Its UK Student Accommodation Fund fell in value by four per cent during the third quarter to £2.8bn, while its London-focused joint venture recorded a 3.4 per cent like-for-like fall to £1.9bn. The decreases were attributed to higher yields being demanded by investors and weaker rental income at properties earmarked for disposal. Despite this, the group held firm on its full-year adjusted earnings guidance of 41.5p to 43p per share for the 2026 financial year. Unite expects to complete £300m-£400m of disposals this year to fund developments and reduce debt.