Unite lettings robust despite drop in admissions

Student accommodation group Unite said occupancy for the 2012/13 academic year stood at 96 per cent and rental growth for the full year expected to be around 3 per cent, despite disruption to the University admissions process this year.

The UK's largest developer and manager of student accommodation said Scottish cities saw a strong performance, as did a number of English cities such as Bristol, Plymouth, Coventry and Newcastle. Letting performance in some cities in northern England and the midlands have been slightly weaker than expected.

In London, all of its new openings are fully let and as anticipated demand has generally been strongest for budget properties and premium product in central locations, Unite explained.

Unite said it was pleased with its performance throughout 2012, despite the disruption to university admissions caused by various government policy changes, and said it remains on track to deliver against its strategic objectives for 2012.

University admissions for 2012/13 have dropped by around 55,000 year on year, mostly as a result of government policy changes. Unite said this represents a 12% drop in admissions however, taking into account the growth in student numbers in recent years, it expects overall student numbers to be broadly static year on year.

For 2013/14 the company expects roughly 50% to 60% of this fall to be recovered as temporary factors and timing differences reverse.

Overall the group expects high occupancy, tight cost control, new development completions and rental growth to continue to underpin the group's prospects.

"We expect student numbers to grow for 2013/14, offsetting some of the reduction experienced this year and with relatively little new supply scheduled, the demand/supply fundamentals of our market remain solid."

CJ