Unite Group Launches £100M Share Buyback Amid Stable Student Accommodation Demand

Unite Group (UTG), the UK's leading student accommodation provider, issued a trading update today, reaffirming its FY2025 adjusted EPS guidance of 47.5-48.25p.

The company also announced a £100 million share buyback program, signaling confidence in its financial position despite modest valuation reductions in its property funds.

Sales for the 2026/27 academic year are progressing in line with expectations, with 64% of beds already sold. This compares to 67% at the same point in the previous year. Unite anticipates occupancy rates between 93% and 96% and rental growth of 2-3% for the upcoming academic year (2025/26 saw 95.2% occupancy and 4.0% rental growth).

The £100 million share buyback is slated to be funded initially by curtailing some off-campus development activities. The company stated it will continue to allocate capital to projects offering the strongest risk-adjusted returns and anticipates further surplus generation from planned asset disposals throughout the year.

While overall performance remains solid, Unite reported slight valuation dips in its Unite UK Student Accommodation Fund (USAF) and London Student Accommodation Joint Venture (LSAV) during Q4, with reductions of 0.7% and 1.4% respectively. However, for FY2025, these funds still showed positive growth of 0.7% and 0.5%. Funding has been secured and construction is underway at the Newcastle University joint venture.

The initiation of the share buyback program is a clear indication of Unite's commitment to returning value to shareholders. The company's strong balance sheet provides the flexibility to execute this buyback while continuing to invest in strategic growth opportunities. Markets will likely view this as a positive sign, potentially leading to increased investor confidence.

Driver Breakdown

• Consistent Demand: University partnerships continue to drive demand for Unite's accommodation offerings.
• Capital Allocation: Focus on high-return projects and strategic disposals optimizes capital efficiency.
• Operational Excellence: Drives improvements in efficiency and profitability.

CEO Joe Lister commented, “Sales progress to date is consistent with our guidance…Our conversations with our university partners show continued demand for our high-quality, value-for-money accommodation.” This reinforces the company's confidence in its core business model.