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Unite warns high construction costs make student builds unviable
Unite plans to offload up to £400M of property and bring forward disposals of 15,000 to 20,000 beds after a £417M first-half pre-tax loss driven by a property revaluation.
Unite Group, the UK’s largest student accommodation provider, reported a £417M first-half pre-tax loss and said purpose-built student housing is being squeezed by soaring construction costs and weaker investment values. The company said the loss was primarily linked to a 6.4% fall in the value of its property portfolio, rather than weakening demand at the UK’s strongest universities.
Unite also disclosed that adjusted earnings slipped 2% to £142M, while a revaluation of its property estate delivered a £530M hit to profits. After a strategic review, the landlord said it was taking “ambitious” measures to sell as much as £400M of assets to focus on student tenants at the country’s strongest universities.
As part of the reshaping plan, Unite said it will accelerate disposals of between 15,000 and 20,000 beds and is reviewing options for a further 2,400 consented beds in London and Bristol, including potential third-party funding or disposal. The firm said it has 1,653 beds under construction, and it expects to spend £61M over the next two years on fire safety remediation, with an anticipated recovery of between 50% and 75% of those costs from contractors.
Unite guided to 94% to 96% occupancy for the 2026-27 academic year, with rental growth of 1% to 2%, and said demand remains resilient. Chief Executive Joe Lister warned that construction costs, tighter regulation, and lower investment values are making new developments financially unviable across much of the country, noting that schemes outside London now require rents above £300 per week versus Unite’s current average regional rent of around £190 per week, according to Bisnow.