8th Jul 2016 06:26
LONDON (Alliance News) - The Unite Group PLC on Friday said the value of its UK student accommodation fund and the London student accommodation joint venture portfolio have both risen during the last quarter.
Unite's UK student accommodation fund was valued at GBP2.14 billion at the end of June, a 1.0% like-for-like increase from the end of March. That portfolio is comprised of 26,319 beds spread over 74 properties across 23 university towns and cities in the UK.
The London student accommodation portfolio was valued at GBP758.0 million at the end of June, also a 1.0% increase during the quarter. That portfolio is comprised of 4,636 beds over 12 properties in London alongside three properties in Edinburgh.
The increase in valuations was driven primarily by rental growth in the quarter, Unite said. Valuation yields have remained stable and the student accommodation fund portfolio is now valued at an average yield of 5.6% whilst the London portfolio is at 4.9%.
Unite said the latest valuations were calculated before the UK's EU referendum vote last month, therefore any impact of that event is not reflected in the valuations published Friday.
However, Unite said 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," said the company.
"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 added.
Unite said reservations for the coming year are slightly higher than the previous year at 87% compared to 86%, supporting rental growth of 3.5% to 4.0%, Unite said.
By Joshua Warner; [email protected]; @JoshAlliance
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