3rd Feb 2021 08:25
(Alliance News) - Unite Group PLC on Wednesday said it will extend its rental discount offered to students in light of the latest lockdown measures imposed in the UK.
England entered its third nationwide lockdown in January, with the UK gripped by a more contagious variant of Covid-19.
Student accommodation provider Unite said it will extend its 50% rental discount to March 8, meaning the discount will now last seven weeks.
"All eligible students who applied for the four-week 50% rent discount will now receive the additional three-week 50% discount automatically. In addition, eligible students will be given a 4-week complimentary extension of their tenancy agreement at the end of the academic year to extend their stay into the summer," the FTSE 250 constituent added.
Unite will book an extra GBP6 million rental income hit as a result, the company explained, equivalent to 1.5 pence of EPRA earnings per share. In January, when it announced the initial rental discount period, it said would take a GBP8 million hit, two pence per share.
"This further three-week extension results in a total cost for the seven-week rental discount and tenancy extension of up to GBP15 million or 4 pence," the company added.
Unite added that it has now collected 91% of all rent to date for the 2020/2021 academic year.
"This reflects successful term one rent collection of 96% and a positive start to term two rent collection at 84% to date," Unite said.
"The strong cash collection to date for term two means we retain headroom against all of our debt covenants, even after allowing for the maximum potential take-up of the seven-week rental discount."
Teaching at universities across the UK has been hit by Covid-19, with some even being forced to provide just online learning only.
Unite Chief Executive Officer Richard Smith said: "Supporting students has been our priority throughout the Covid-19 pandemic, and we will continue to play our part during these exceptional circumstances. We recognise this is a challenging time for students, which is why we've extended our current 50% rent discount period."
Unite shares were down 3.1% at 954.50 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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