Unite Share Discussion Threads

[beltd] 13/6/2022 14:32

Universities facing new China cash crackdownhttps://www.thetimes.co.uk/article/e8776bac-ea90-11ec-b47a-cf598c451bbb?shareToken=de161146fc4a0d1ea68d843ac627a853

[maddox] 10/6/2022 13:09

Unite joins the FTSE 100 index on 20 June. 'FTSE Russell, a leading global index provider, confirms today Centrica and Unite Group will be joining the FTSE 100 Index as a result of the June 2022 annual review. In the rebalance, ITV and Royal Mail will leave the FTSE 100 index and enter the FTSE 250 index.' HttPs://www.ftserussell.com/press/ftse-uk-index-series-annual-review-june-2022 This was announced on Wed 1 June after the market close. In theory, this should mean that index tracking or FTSE 100 mandated investment funds should increase demand for the shares. We'll see.

[maddox] 10/6/2022 13:07

Good to see Marcus Phayre-Mudge still backing Unite - good spot speedsgh. The point about the 21,000 additional beds in 2020/21 - is that it is in no way keeping up with the number of new students requiring accommodation. According to HEPA first year higher education student enrolments increase by 117,670 (10.3%) in 21/20 over 19/20. This is driven by demographics - a growth in 17/18 year olds and a greater proportion participating in higher education. HttpS://www.hesa.ac.uk/data-and-analysis/sb262/figure-1 All of this increases the pricing power of PBSA providers as we enter a higher inflationary period.

[speedsgh] 08/6/2022 11:41

Interesting comment on the sector by Marcus Phayre-Mudge, the highly-rated fund manager of TR Property Investment Trust (TRY) in their recent results... Purpose built student accommodation (PBSA) has fared better as students clearly want the campus experience and value for money. The structural fundamentals remain sound; the combination of the growing numbers of students (post the recent demographic dip) coupled with the desire to live in better quality accommodation than previous student generations. According to UCAS, 30% of first year students live in PBSA and this has increased from 22% five years ago. An encouraging growth rate. Another 40% start their university life in halls of residence but that percentage has remained static over the same period, reflecting the lack of capacity or capability for universities to add to their own residential real estate portfolios. Cushman Wakefield have identified 681,000 student accommodation beds across the UK with a net increase of just 21,000 over 2020/21. Q1 2022 data has also revealed a marked slowdown in planning applications for new PBSA units. Importantly, quality is a key priority with prices up by 17% since 2019/20 for those with en suite bathrooms. We continue to hold Unite (UK) and Xior (Belgium, Spain) and note the recent takeover of American Campus Communities, an $8bn market cap US student accommodation REIT by Blackstone. Yet another privatisation.

[maddox] 01/6/2022 08:14

Huge purchase of student property in prospect as Brookfield Sells Student Housing Portfolio to GIC and Greystar. The deal values the Student Roost business at about £3.3 billion. GIC is the Singaporean wealth fund that is already in a 50/50 investor in Unite's LSAV - one of their two off balance sheet student accommodation funds. The jv was extended last year out to Sept 2032. So GIC's appetite for investment in the Sector was not sated. Student Roost operates in more than 20 cities across the UK. Its portfolio comprises over 23,000 beds, and there are plans to develop about 3,000 more. It drew interest from private equity and strategic bidders, including Blackstone Inc. and Unite Group Plc, Bloomberg News has reported. The sale of the business is one of the largest deals in the sector since Blackstone agreed to buy the iQ Student Accommodation business from Goldman Sachs Group Inc. and the Wellcome Trust for about $6 billion in 2020. Student housing continues to draw in financial investors as it presents a resilient asset uncorrelated with the wider economy. The severe undersupply of purpose-built student accommodation will offer pricing power in the face of rising inflation. It is thus a perfect strategic investment for pension funds with long-term liabilities to finance. https://www.bloomberg.com/news/articles/2022-05-30/gic-greystar-said-to-agree-3-3-billion-uk-student-housing-deal?utm_source=google&utm_medium=bd&cmpId=google

[maddox] 23/3/2022 18:08

It would appear that the police has arrested a suspect - a boyfriend, x-boyfriend by the looks of it. Very sad. [...]

[bothdavis] 20/3/2022 13:52

Sad to see the death of a student at one of Unite's buildings. Probably going to have to up security I would suggest.

[beltd] 09/3/2022 21:51

Well who knows Maddox. Is the market rationale? I see Unite more and more as a growth dividend stock. Like a McDonalds or Coke or such like. Investors will happily accept a lower yield as the company will likely deliver year on year dividend growth. When that yield looks higher on the dips, add more.

[maddox] 09/3/2022 20:35

Anyone reading my stream of consciousness on Unite will be familiar with my puzzlement as to why the share, which I regard as the most resilient, exhibits so much volatility? (Accepting Covid ofc which has obviously presented real tangible challenges) The explanation I have been offered is that I'm confusing the rationale for the seller with the fundamental attraction of the shares. Essentially, when the market collapses and investors in funds decide to exit the Fund Manager has to quickly find cash to redeem investors' holdings. In such circumstances the Fund Manager needs to sell a share that is liquid and has potential buyers prepared to pick-up the stock in large quantity - albeit at an attractive price. Unite's quality and resilience thus counts against it at such times - it's the ideal share to shift to raise cash quickly. OK, this is unproveable, I cannot look into the heads of those selling out of UTG because, for example, Russia invades Ukraine. Nevertheless, I can see the logic and it fits with a wider trend I've observed - the higher quality stocks fall furthest in a crash. (They also rise quickest and then perform more strongly.) So, a useful working hypothesis that I'll take onboard until a better explanation appears. Can you offer one? Regards, Maddox

[speedsgh] 08/3/2022 13:55

Unite Students to dispose of 11 properties - HTTPS://www.investegate.co.uk/unite-group-plc--utg-/rns/unite-students-to-dispose-of-11-properties/202203080700079899D/ ... The disposals are priced in line with prevailing book value, which reflects an NOI yield of 5.7%. The properties were treated as held for sale in the balance sheet as at 31 December 2021 and the disposal is incorporated into the Company's guidance for EPRA EPS of 41-43p for the 2022 financial year, which remains unchanged. Completion will occur on 15 March on four of the properties in the portfolio for £51 million (Unite share: £11 million). The completion of the remaining properties will occur on 31 August 2022. The disposals reduce see-through LTV to 25% on a pro forma basis, providing the Group with capacity to fund its £1 billion development pipeline and explore additional growth opportunities. Richard Smith, Chief Executive of Unite Students, commented: " We have now completed the disposal programme set out at the time of our acquisition of Liberty Living in 2019. These disposals have increased the focus of our portfolio in the strongest university cities and ensure our ability to sustain rental growth over a longer time horizon. Our balance sheet is also positioned for growth with the investment capacity to deliver our biggest ever secured development pipeline of £1 billion and pursue further opportunities to extend our best-in-class platform"

[beltd] 25/2/2022 17:40

Soon bounce back as expected!

[maddox] 23/2/2022 18:46

Looking at the share price recently you'd think Putin had invaded Unite not Ukraine. Yes, a very strong recovery is in-progress and the outlook for academic year (AY) 2022/23 is highly positive. The development pipeline is at an all-time high of 6000 beds(c.£1bn in value) that will increase the weighting 44% towards London (35%). The dividends are recovering nicely with more to come as the Covid effect wears-off. With the LTV ratio at 29% UTG have huge headroom should any peachy PBSA portfolio become available for acquisition. On Covid IMHO the virus is following a clear evolutionary pathway where each new dominant variant is more infectious but less severe – making the likelihood of the emergence of a more serious variant highly unlikely. The 20+ different viruses that we refer to as 'the common cold' was each probably a deadly human pandemic in its time. So, I think that this threat is being over-exaggerated. Some interesting strategic opportunities/initiatives were revealed today: >> HMOs: The private landlord with Homes of Multiple Occupation (HMOs) rented to students is a specific target for UTG. UTG is already competitively priced with HMOs and landlords are now under significant new pressures to comply with energy efficiency standards. The cost of retrofitting insulation to old property to meet the minimum standards could be prohibitive. UTG have their electricity costs fully hedged in 2022 and 85% hedged for 2023, and gas (which accounts for less than 0.5% of rent) is hedged through 2023. HMO renters are unlikely to be as well protected from escalating energy prices. >> Premium segments: UTG are also trialling greater segmentation of their portfolio to target some more premium-priced segments. One of these is the recently graduated professional requiring City Centre accommodation a.k.a build-to-rent. This closely associated market vertical could become an important new market for Unite and definitely something to watch. So, a very welcome set of results and plenty of interesting growth opportunities in-sight. I'd recommend you listen to the replay of the presentation as there is far too many points of interest for me to only scratch the surface of in this summary: httPs://webcasting.brrmedia.co.uk/broadcast/preview/61a62ec07aad4f60e33f6620 Regards, Maddox

[beltd] 23/2/2022 13:04

Good set results, better than expected. 2.2% yield that should keep growing.

[beltd] 22/2/2022 14:28

Well results tomorrow folks ...... drum roll

[speedsgh] 16/2/2022 12:31

Brookfield Starts $4.7 Billion Student-Dorm Unit Sale - HTTPS://www.bloomberg.com/news/articles/2022-02-15/brookfield-said-to-start-sale-of-4-7-billion-student-dorm-unit Brookfield Asset Management Inc. is preparing to kick off the sale of one of the U.K.’s largest student-accommodation businesses amid heightened investor demand for such assets, according to people familiar with the matter. The infrastructure specialist is working with advisers on the disposal of Student Roost, which could be valued at more than 3.5 billion pounds ($4.7 billion), the people said, asking not to be identified as the matter is private. It will send marketing documents to potential suitors imminently and the sale is likely to attract private equity and strategic bidders, including Blackstone Inc. and Unite Group Plc, the people said. Deliberations are ongoing and no final decisions on the timing of any sale have been made, according to the people. Representatives for Blackstone, Brookfield and Unite declined to comment. Toronto-based Brookfield entered the U.K. student housing market in 2016 when it bought a portfolio of roughly 5,000 beds from Avenue Capital Group and developed it into what is now Student Roost. The business operates in more than 20 cities across the U.K. and is expected to have about 23,000 beds by the end of the 2022-23 academic year. A sale of the Student Roost could be the largest deal in the sector since Blackstone Inc. agreed to buy the iQ Student Accommodation business from Goldman Sachs Group Inc. and the Wellcome Trust for about $6 billion in 2020. Student housing continues to be popular among financial investors in the U.K., with the number students vastly outnumbering the rooms available in purpose-built accommodation. The shortage is being exacerbated as international students return to the U.K. amid the removal of pandemic-era hurdles likes lockdowns and quarantines. Brookfield’s real estate business in Europe managed over $45 billion of assets as of the third-quarter in 2021, having more than doubled in size since 2016. Its overall assets in Europe topped $110 billion last year.

[speedsgh] 25/1/2022 10:53

Yes, I was rather confused by the explanation too as one would obviously expect a lower-than-normal yield for something with less risk attached. Perhaps not the best worded rns?!

[maddox] 25/1/2022 10:07

Thanks Speedsgh, good news and the 7% initial yield on costs is higher than normal - although I'm not sure I understand the explanation? 'which reflects the lower risk associated for a project with planning approval already secured.' I presume it means they secured the land at a price which did not fully reflect the additional cost of taking it through the planning process?

[speedsgh] 24/1/2022 10:44

Acquisition of development site in Nottingham - HTTPS://www.investegate.co.uk/unite-group-plc--utg-/rns/acquisition-of-development-site-in-nottingham/202201240700132892Z/ Unite Students, the UK's leading owner, manager and developer of student accommodation, has acquired a consented 270-bed development site in Nottingham city centre. Total development costs for the scheme, which will open for the 2024/25 academic year, are estimated to be £34 million. The direct-let development is expected to deliver a yield on cost of 7%, which reflects the lower risk associated for a project with planning approval already secured. Unite already owns and manages c.1,900 student accommodation beds in Nottingham with a further 970 beds to be added in the city across the new city centre site and the Company's 700-bed consented development at Derby Road, due for delivery in 2023. The development will increase our presence in Nottingham city centre, adding to Curzon House, which was acquired as part of the Liberty Living portfolio in 2019. The scheme also provides an opportunity to segment our portfolio in the city by creating a more tailored offer for second, third year and postgraduate students. Nottingham is home to two high-quality universities, the University of Nottingham and Nottingham Trent University, serving 64,000 full-time students. Nottingham has seen a 20% increase in students seeking accommodation in recent years, creating a clear need for new high-quality, purpose-built homes. The newly acquired site is located in a prime location on Lower Parliament Street in the heart of the city centre, close to Nottingham Trent University's campus as well as the University of Nottingham's planned city centre campus development for final-year and postgraduate students. Nick Hayes, Group Property Director of Unite Students, commented : "Through this opportunity we are able to cater for the increased number of students wanting to attend the University of Nottingham and Nottingham Trent University, both located in a growing regional city. This commitment increases our secured pipeline to over £800 million, its highest ever level, and we continue to see opportunities to add further schemes in London and prime regional markets at attractive returns".

[maddox] 22/1/2022 08:52

Hi BELtd, For what is such an extremely resilient business model - it seems that the weather affects the Unite share price looking at the volatility. tbh I am always at a loss to rationalise the share price movements on a short term timeframe. Essentially, these gyrations provide a good opportunity to pick-up shares at a better price. UTG is recovering strongly and potential Uni deals and current development pipeline will grow the value of the business. This growth trajectory is itself highly resilient and 'guaranteed growth' should command a premium. At some point, but who knows when, this will undoubtedly be reflected in the share price. Regards, Maddox

[beltd] 21/1/2022 13:27

Wonder if any private equity is running the slide rules over this? Must look appealing

[beltd] 19/1/2022 09:52

You would think this offers value at this level..... but who knows the markets

[maddox] 16/1/2022 19:30

Hi a_game, I think Covid has been the 'Black Swan' for Unite - but I'd welcome suggestions of other risks to the business - events, circumstances, competitive pressures that might damage the business?

[a_game] 16/1/2022 16:17

This is certainly a buy and forget stock. You can't go wrong here, unless a black swan appears ;)

[maddox] 11/1/2022 08:55

Very encouraging update on trading and valuations from Unite this morning. Good news on all fronts - trading, development pipeline and asset values. Current trading appears to be returning to normal levels despite the continuing Covid situation - which is fantastic news. Looking forward Unite are seeing strong demand for 2022/23 from both domestic and international students. They are not taking any chances on international students and are intending to retain their domestic students. UTG are clearly keen to hit their occupancy targets. Competition for prime city centre locations is more favourable for Unite in the wake of Covid. So, the pipeline will hopefully be expanded further with some juicy development opportunities. There is also strong investor demand for student accommodation as an asset class. This is leading to higher valuations and thus acceptance of lower yields - the 'yield compression' mentioned in the rns. Covid has highlighted the robust demand from young people for the university experience. On-line learning has its obvious advantages but Covid has also revealed its limitations. The 'right of passage' that a degree course at a university represents has been fully stress-tested and has come through strongly. The future outlook for Unite is looking very positive.