Unite remains bullish on growth despite coronavirus
Unite Students has yet to see any negative impact on reservations from international students for its accommodation for the 2020/21 academic year despite increasing cases of coronavirus across the globe.
However, the REIT added in its latest full-year results that it was monitoring the situation and the potential risk to its 2020 summer income and 2020/21 academic year income in the event of disruption.
“We will continue to work on mitigating actions and monitor the situation,” Unite said
Unite Students has yet to see any negative impact on reservations from international students for its accommodation for the 2020/21 academic year despite increasing cases of coronavirus across the globe.
However, the REIT added in its latest full-year results that it was monitoring the situation and the potential risk to its 2020 summer income and 2020/21 academic year income in the event of disruption.
“We will continue to work on mitigating actions and monitor the situation,” Unite said
It added that the outlook for demand remained strong despite the spread of the virus, Brexit and the review of higher education funding.
The early strength of applications and reservations for the 2020/21 academic year are supportive of rental growth of 3% to 3.5% through a combination of value-driven price increases and improved utilisation, Unite reported.
The firm added that rental growth, together with cost synergies from its £1.4bn takeover of Liberty Living and new openings net of planned disposals, could add 16p to 20p to earnings per share on completion of its secured pipeline.
Unite posted an 8% increase in EPRA NAV per share to 853p at the end of December 2019 and, following the acquisition of Liberty Living, the company’s combined portfolio value has risen to £5,2bn, compared with £2.97bn at the end of 2018.
Unite said it expected the integration of Liberty Living, which will create a combined portfolio of 74,000 student beds, to incur costs of £7m in 2020, but that it would create annual cost synergies of £15m from 2021.
Net debt for the company stood at £1.88bn at the end of 2019 due to the acquisition a 120% increase on 2018.
Rental growth across Unite’s portfolio in 2019 was 3.4%, with occupancy at 98%.
Revenue hit £156m, up from £113m in 2018, and the firm recorded a pretax loss of £101.2m for 2019, down from £246m profit in 2018.
Unite said the pretax loss was primarily the result of the impairment of goodwill and intangibles of £384.1m relating to the Liberty Living acquisition.
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