Share Name Share Symbol Market Type Share ISIN Share Description
Unite Group LSE:UTG London Ordinary Share GB0006928617 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -3.00p -0.36% 842.00p 840.50p 841.00p 846.00p 836.50p 842.00p 819,975 16:35:15
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 119.3 229.4 95.3 8.8 2,217.77

Unite Group Share Discussion Threads

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Good article in Citiwire: 'Brexit won’t bother investors in student property, says GCP' By Michelle McGagh 07 Sep, 2018 hTTp:// Whilst featuring GCP the arguments apply equally well to Unite.
'Give foreign students longer visas' says Universities UK The international director of Universities UK, Vivienne Stern, has called for a new visa to be created that would allow foreign students to get work experience in the UK for two years after they've graduated. She told BBCR4 Today Programme that international students are invaluable to British education and economy. The UK has been taking a very hard line on foreign students by not allowing them, as other counties do, to stay on for a period to gain work experience after graduating. Essentially, they are a soft target towards reducing UK immigration numbers. However, a recent The Home Office paper on “exit checks” data – a proper count of all people who are actually known to have left the UK – found 176,317 – 97.4% – of 181, 024 international students from outside the EEA left on time. This itself is probably an underestimate as others in the remaining 2.6% might have also left but via routes not subject to exit checks, such as via Northern Ireland. Foreign Students are estimated to contribute £25bn to the UK economy and play an important role in supporting the UK University Sector through the high fees they pay. Other countries' more welcoming attitude towards foreign students means that they are growing their numbers far more strongly than the UK. Regards Maddox
Just thought that I'd note that Unite closed at another high - and at an auspicious 888p! Unite is now consistently trading at a premium to EPRA NAV (761p at 30 June). This is justified by the growth trajectory unite is on. They signed three University deals in the last period, namely Aston Student Village, Oxford Brooks and Kings in London. However, they are in discussion on a further six deals (totalling c, 4000 - 6000 beds). Cheers Maddox
Unite hitting a new high at 865p. This follows news of planning approval for 928 bed development in the heart of Leeds bringing their Leeds portfolio up to 4,376. This is bang on Unite's strategy of building scale in locations with high-ranking universities. Leeds is a major university town with a student population of 58,000 with Leeds and Leeds Becket having options on half of Unites' current capacity. Unite shares have advanced 85p (c.11%)so far this year so any shareholder that opted for the scrip dividend at 805p should be feeling pleased. Regards Maddox
Unite returns to the London market for the first time since 2013 with a University Partnership Deal for a 1000 bed development. The advantage of a partnership agreement is that the financial return is underwritten by the University, in this case Kings College. There is a shortage of accommodation for Universities to place their first year and foreign students. So a 'nomination' agreement with Unite to allow the Uni to allocate the beds to their students suits both partners. Regards Maddox
Just want to highlight that I think Unite’s latest (RNS 8 Dec 17) is one of the eight University deals that Unite has under evaluation, part of a new strategic initiative: 'UNITE EXTENDS UNIVERSITY PARTNERSHIPS WITH OXFORD ACQUISITION Unite Students, the UK's leading manager and developer of student accommodation, has exchanged contracts on a development site in Oxford. It has, in parallel, agreed commercial terms with Oxford Brookes University for a 25-year nominations agreement covering the site, which will extend its partnership with Unite to 1,350 beds. Planning consent for the development has been granted subsequent to exchange. The new development is expected to provide 885 new beds and will be delivered for the 2019/20 academic year with total development costs expected to be around £75 million. Anticipated returns are in line with our stated targets for University Partnerships.' This new strategic initiative was revealed at Unite’s recent Capital Markets Day, held significantly at the Aston University Campus. They bought the whole of Aston’s student accommodation, Aston Student Village, in Feb 2017 for £227m. This was the first deal of this nature and could be the spark to consolidation of the sector. This is a very large potential opportunity for Unite as there is nearly as much student property owned by the university sector (280,000 beds) as in the private sector (300,000 beds). Another key piece of news at the Capital Markets Day was that they ‘have eight opportunities totalling 6,000 – 8,000 under active evaluation’. These deals might be either: >> Sale of student property to Unite but with commitments to upgrade and nomination agreements; >> On-campus development in partnership with the university; or >> Off-campus development in partnership with the university, supported by a nomination agreement. The theme of the Capital Markets Day was all about Unite's 'university partnerships’. This supported by the fact that 60% of Unite’s purpose built student accommodation is pre-let to universities to house their first-year students under what are called ‘nomination agreements’. Unite are clearly positioning themselves as the prime candidate for similar deals - for which they are ideally positioned: >> The Aston deal reflects Unite’s access to substantial funding through its co-investment partners (50% of funds came from GIC, Singapore's sovereign wealth fund); >> As the pioneer and largest independent provider of purpose-built student accommodation (PBSA) Unite's existing scale of operation and infrastructure puts it in a strategically strong position (operating 49,000 beds 2017/18 academic year; and >> They have long-established relationships with universities and are thus a known entity. This last point may be crucial as Unite won the Aston deal at a reasonable initial yield of 5% in a competitive tender process. The universities may not be happy selling to a faceless institution in view of the continuing need for a close working relationship. Other signs that Unite is clearing the decks for action have been: Unite have brought their debt leverage down to 30% giving them plenty of headroom to take on more debt; • A new lower cost £500m unsecured debt facility has been agreed (being unsecured gives great flexibility as to how this debt is deployed); and • Achieved a high investment grade (BBB from Standard & Poor’s and Baa2 from Moody’s) for their debt. Whether or how quickly Unite's strategic aspirations in this new arena are realised is of course uncertain. In the meantime, I’m happy looking at the current secured development pipeline of 6,500 beds through to 2020. Regards Maddox
Nothing to say since July? Thought the fire in Manchester would have caused some postings.
high park
Think its a typo...3 is £ sign on my computer!! If i depress the keys correctly!! As a shareholder for a long time and keen to help others, i saw this today in the Times, so thought i would share.....!
Hi bothdavis, Don't know where you got the £32m figure from? How about editing your post and I'll delete this line in mine. Firstly, and most important from a student safety viewpoint all 132 of Unite's properties have been judged, by local fire and rescue services, to be safe for occupation. However, Unite have 6 buildings out of 132 that have the Grenfall Tower-type aluminium/composite cladding. On four of them it is cosmetic (less than 25%) and two are 75% cladded. Should they need to replace the cladding the estimated cost is £1m - £2m in capital cost and between £0.5m - £1.5m in lost revenue. This is a small financial impact and a small price to pay to ensure their students are safe, Regards, Maddox
Cladding Risk at Student Halls The largest provider of student accomadation may need to close 600 rooms and spend 32 million replacing cladding after the Grenfell Tower fire. Unite, which owns 49,000 beds in 24 cities, said that tests on 132 of its buildings found that six in Bristol, London, Portsmouth and Leeds did not come up to standards. Fire officials concluded that after some alterations the buildings were safe, but a second test was being conducted into the panels. Unite said that if the second test found that the panels needed replacing, it could also result in lost earnings of as much as £1.5 million.
Ahead of the half-year results, due on the 26th July, today we have the Quarterly Fund Valuation Report that gives a good early indication of performance. As well as Unite’s wholly owned student digs Unite run a couple of student property funds of which they own a percentage: The two funds are: USAF – Unite own 23% LSAV – Unite own 50% These funds are independently valued for their large financial institution investors, and the good news is that USAF is up 0.9% and LSAF up 0.5% during the quarter. Also, quoted: ‘Reservations for Unite's portfolio stand at 89% for the coming 2017/18 academic year, compared to 87% at the same time last year, and is supportive of achieving target occupancy of 98% across the portfolio and rental growth of 3.0% - 3.5% for the full year.’ So solid progress is likely to be reported on the 26 July with strong demand and the outlook is positive for the full year. I note Mr Market likes the news and has marked the shares up 11p to 651p as I post. Regards Maddox
In response to Unite's latest £34m acquisition through it's USAF managed fund, Proactive Investors quote Broker Liberum: "We believe Unite offers one of the best combinations of capital and income growth in the sector, with forecast total returns of 12% p.a., and trading at a 10% discount to NAV. Forecast growth is anticipated to come from RPI linked rents and a secure development pipeline. While the cycle of yield compression may be over for student accommodation, we believe Unite's prospects for income growth remains attractive, and that the capitalisation of that gain to NAV will continue to support total returns," it said, 'Shares in UNITE dipped 3p to 633.50p. Liberum has a price target of 720p.' [...]
Maddox - you'll know more about UTG than I do, but my impression is that it's as much a property developer as a rent-taker. Property developers tend to command lower ratings (more risk when downtrun comes), and the company's gearing is there to finance development rather than leverage rental income. Hence dividends tend to be lower.
I'm already over-exposed to this sector so cannot contemplate further investment, but really like the WJG business model. As you say, the fact that they utilize their client's capital is very attractive. But overall I prefer Unite's asset backing - the LTV is c.35% so very conservatively financed with high covenants and long-term. I've long thought that Unite's yield might be a key factor in the lack of PI following. Property investors tend to be looking for income and Unite's share price never makes them look good value. Was that a factor for you?
Hi Maddox - held DIGS first, then ESP. I soon had doubts about ESP (over-expansion, stretched management? - anyway, it's been a bit dull). WJG builds stuff and gets staged payments - ie. de-risked construction. It also manages student lets for investors who don't want the hassle. Both these companies are protected from a sector downturn, I think. London will be most in demand for DIGS, and WJG is diversifying into build-to-rent. Both are debt free. UTG seems to be vertically integrated so it has exposure to the sector at every stage. Also has debt, though LTV 30% isn't a big issue. It certainly seems well-managed, so - good luck, should do OK.
Hi jonwig, Yep, thanks for posting - nice to have some company. Why have you chosen DIGS and WJG over Unite?
You seem to be alone here Maddox! I have a lot of exposure to the sector (DIGS and WJG) otherwise would be in this too. DIGS say that Woburn Place is in need of extensive redevelopment taking over a year. Clearly there will be a future uplift in value, and DIGS is a London specialist. Both sides come out of this well-satisfied I imagine.
Another insightful RNS from Unite - a disposal of a student property in London for £135m. This time the buyer is another quoted specialist student property REIT GCP Student Living (DIGS). GCP will be getting an initial yield on purchase of 4.5%. What is interesting is that the property was in Unite's books valued at 6% lower which puts it on a yield of 4.7% indicating how conservatively valued UTG's assets might be. Unite's share price is already well below the last reported NAV of 647p - if this 6% underestimation of asset values is consistent across the portfolio the NAV would be 710p. HTTP://
Investors Chronicle have tipped Unite this week, following the results: Bull points: >> Record reservation levels >> Strong earnings visibility >> Solid rental growth >> Reit status boosting the dividend Bear points: >> Uncertainty over foreign student numbers >> Strong competition for land IC View: 'Earnings growth in the next few years is likely to be significant. And while there may be doubts about the number of overseas students arriving, there is still a huge shortage of purpose-built space.' 'And yet the shares are trading at a noteworthy discount to forecast net asset value. Buy.' HTTP://
Extremely solid full year results from Unite the highlights being: >> Final dividend up 26% to 12p (2015: 9p) making 18p for the year up 20% overall; >> EPRA Net Asset Value up 12% to 646p per share; >> Like-for-like rental growth 3.8% for the full year (2015: 3.8%); >> The statutory reported profit is £201.4 million (2015: £388.4 million), down on 2015 due to the large property revaluation gain taken into the 2015 figures; and >> Conservatively financed loan-to-value LTV of 34%. The outlook for Unite is positive as well: >> Current reservations at record levels for 17/18 academic year at 73%; >> No material impact seen or anticipated from Brexit; >> Supply/Demand imbalance continues with 185k more applicants than university places in 16/17; >> Unite forecast rental growth of 3 - 3.5% in 2017. Mr Market appears to have liked these results with the share price at 626p at close from 611p the previous night's close. Regards, Maddox
.... and now a strategically significant disposal. Following a huge £227m purchase of assets comes and even bigger £295m disposal. A few points of significance: >> Unite have been able to sell a ready-made student property portfolio to a large US investment fund Brookfield Asset Management; >> This transaction demonstrates the continuing demand from large institutional investors for this asset class; and >> This deal further highlights Unites' unique capability to transact deals of substantial scale. This deal effectively restores Unites financial capacity bringing Unites LTV down to a conservative 34%. One wonders what else Unite has up its sleeve? Regards Maddox
I think that the 'penny is starting to drop' as to the strategic significance of this last deal.
Unite have made a substantial £227m acquisition of Aston Student Village comprising 3067 beds over five properties on the campus of Aston University in central Birmingham. Although it doesn't say so I presume bought from Aston University. HTTP:// Reflecting this hot sector of the property market and quality of the asset the yield on purchase is 5% - but Unite intend to grow this to over 6%. I'd pick out a couple of points of significance: >> The yield of 5% is pretty good as it's as good as guaranteed as these properties are the only accommodation offered to Aston's c. 11,000 students; >> The deal reflects UTG's access to substantial funding; >> UTG's existing scale of operation and infrastructure puts it in a strategically strong position in the likely consolidation of the sector; and >> This deal will put Unite as prime candidate for similar deals by other universities looking to realize the value in their student accommodation assets. Whilst, we're foregoing the 3% development yield gain on this new approach we'll be seeing the benefit far earlier in NAV and EPRA earnings. It's also worth noting that Unite is still very conservatively financed with loan-to-value (LTV) rising to 38% from 35% previously; and with the ability to sell its developed properties into either of its two managed funds (USAF or LSAF). Unite has unique advantages to compete effectively in this attractive sector of the property market. Regards, Maddox
More good news.... Unite has secured planning consent for two city centre developments in Birmingham and Sheffield totalling 1,186 student bedrooms. These latest consents take the total development pipeline to be delivered in the next three years to 6,500 beds, providing further visibility to our earnings growth outlook. HTTP://
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