3rd Nov 2025 09:01
(Alliance News) - Empiric Student Property PLC on Monday said meeting its full-year occupancy target will be "challenging" if market conditions do not improve.
The student property company said there has been a "slowdown in the pace of reservations" since September, in line with the wider market.
"The booking cycle for the academic year 2025/26 has continued to moderate compared to the record levels of recent years," it said, noting its occupancy rate stands at 89% currently, down from 95% this time last year.
In the four weeks between August 14 and September 9, it saw a seven percentage point hike in its occupancy. Since then, however, occupancy has risen by five percentage points.
"Assuming that current conditions do not change, delivery of the company's occupancy target for this academic year will be challenging. However, January letting activity focussed on the spring intake for postgraduate courses continues to be a focus and we are actively seeking to capitalise on what is becoming an increasingly popular shorter term student lettings market," Empiric said.
"In this year's booking cycle we have experienced a reduction in the number of Chinese students staying with us and some localised supply and demand imbalances in three cities, being Nottingham, Sheffield and Glasgow, where available rooms account for over five percentage points of lost occupancy. The remainder of the portfolio has performed better and pleasingly we note an increase in the number of UK domestic students choosing to stay with us."
Empiric, which recently agreed to a takeover by fellow London listing Unite Group PLC, said like-for-like rental growth for the 2025/26 academic year in line with guidance at 4.5%.
Empiric reconfirmed its 3.7 pence per share dividend target and announced a 0.925p per share third quarter payout.
Empiric in August agreed to a takeover offer from Unite, valuing Empiric at roughly GBP710 million. For each share held, Empiric stockholders will receive 0.085 of a new Unite share, plus 32 pence in cash, valuing each Empiric share at roughly 94.2p for GBP634 million, with an additional dividend payment raising the total value to GBP723 million.
The UK Competition & Markets Authority in October confirmed the start of an investigation into the planned merger.
Unite on Monday noted Empiric's trading update.
"Our appraisal of the acquisition of Empiric had assumed lower occupancy and rental growth than the prior academic year, which was reflected in our offer terms. Empiric's occupancy for the 2025/26 academic year is slightly below these expectations, allowing for further typical letting activity for the spring intake of postgraduate courses, whilst rental growth is in line with our expectations," Unite said.
"Our strategic rationale for the acquisition is underpinned by Empiric's proven platform for expansion among returning students. We are actively preparing for integration following completion of the acquisition and continue to see a meaningful opportunity to improve occupancy across the Empiric portfolio over the next three years through our operational platform, strong university relationships and enhanced customer retention."
It reaffirmed its "confidence" that the deal can deliver "earnings and dividend accretion".
Unite shares were down 1.7% at 557.50 pence each in London on Monday morning. Empiric was down 0.9% at 77.20p.
By Eric Cunha, Alliance News news editor
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