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CREATING A
HOME FOR
SUCCESS
THE UNITE GROUP PLC
Annual Report and Accounts 2023
THE UNITE GROUP PLC Annual Report & Accounts 2023
FINANCIAL HIGHLIGHTS
OUR 2023 ANNUAL REPORT
Adjusted earnings
£184.3m
2022: £163.4m
Adjusted earnings per share
44.3p
2022: 40.9p
Dividend per share
35.4p
2022: 32.7p
EPRA NTA per share
920p
2022: 927p
Total accounting return
2.9%
2022: 8.1%
IFRS diluted earnings per share (p)
24.6p
2022: 87.6p
OPERATIONAL HIGHLIGHTS
Record 99.8% occupancy in
2023/24 academic year
Significant capital investment
in our existing estate
Completed 705-bed new
property in Nottingham
Partner for 2,000-
bed jointventure with
Newcastle University
Four pipeline
developments on track for
2024–26 delivery
Delivering on our
sustainability targets
We were named Student Accommodation Operator of the Year for the
second year running at Property Week’s RESI Awards 2023. The award
recognises our commitment to supporting students’ mental and physical
health, as well as our diversity and inclusion initiatives.
We also secured Alternatives Team of the Year at
Property Week’s Property Awards. Our win highlighted
our achievements with developments and operations,
innovation, client feedback, diversity and inclusion, our
sustainability agenda, employee initiatives and The
Academy, which is our commitment to providing our
employees with lifelong learningopportunities.
AWARD-WINNING 2023
Students voted five of our properties across the
country as Best Properties in Student Crowd’s Student
Voice Awards 2023. Cambrian Point, Cardiff; Angel
Lane, London; Sky Plaza, Leeds; New Medlock House,
Manchester; and Brass Founders, Sheffield were all voted
in first place, while three of our properties were awarded
second place and eight won third place. The Student
Voice Awards are given to the highest-rated properties
based on authentic student reviews on the Student
Crowdplatform.
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CONTENTS
Strategic report
2 Our strategy in action
10 Who we are
12 Investment case
14 Business model
18 Chief Executive’s review
24 CEO and CFO Q&A
26 Market overview
30 Key performance indicators
32 Financial review
48 Sustainability
58 Climate-related financial disclosures
(including TCFD)
67 Principal risks and uncertainties
Corporate governance
80 Chair’s introduction
to governance
82 Board of Directors
86 Board statements
89 Board leadership and purpose
97 Division of responsibilities
99 Section 172
102 Board activities
110 Nomination Committee
114 Audit & Risk Committee
120 Sustainability Committee
123 Health & Safety Committee
127 Remuneration Committee
163 Directors’ Report
166 Statement of Directors’ responsibilities
Financial statements
167 Independent auditor’s report
176 Consolidated income statement
176 Consolidated statement of
comprehensive income
177 Consolidated balance sheet
178 Company balance sheet
179 Consolidated statement of changes
inshareholders’ equity
180 Company statement of changes
inshareholders’ equity
181 Consolidated statement of cashflows
182 Notes to the financial statements
Other information
237 Financial record
238 Glossary
241 Company information
OUR REPORTING SUITE
Annual Report
https://www.unitegroup.com/annual-report-2023
Sustainability Report
https://www.unitegroup.com/sustainability
Investor site
https://www.unitegroup.com/investors
Read more
18
CONTENTS
The business has delivered
another year of strong operational
and financial performance, with
growth in earnings and dividend,
full occupancy, and ongoing
investment into our platform
and portfolio. We continue to see
strong demand and pressures on
housing supply and are confident
in our growth outlook.
Joe Lister
Chief Executive Officer
01
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR STRATEGY IN ACTION
Everything we do at Unite Students goes into providing a
home, where the tens of thousands of students who live
with us canthrive.
This is more than a space to live. We offer a place where students feel
they belong, in an inclusive community with plenty of opportunities
to have fun. Our accommodation is offered at a range of price points,
including affordable beds. All staff working in our student properties
are trained in mental health and active listening with access to round-
the-clock support should students need it.
We deliver this through our common purpose of creating a Home for
Success. Our teams provide the right home where students can learn,
so they can be their best and go on to achieve theirambitions.
This involves everyone in the business doing the right thing for our
stakeholders – meeting the needs of students and their parents, the
universities we partner with, our own teams, local communities and
our investors, who recognise the link between ourpurpose and our
plans for long-term growth.
This chapter demonstrates how we have lived our purpose in 2023.
CREATING A HOME
FOR SUCCESS
Committed and talented people
The passion and commitment of our people is the main driving force behind our success.
We believe doing what’s right for students starts with doing what’s right for our people.
We recognise the importance of being a place where people want to come to work.
Wesupport our people and invest in their skills. We are also working to create a culture
where difference is valued, so both our customers and employees feel they genuinely belong.
Our ongoing commitment to our colleagues was demonstrated by internal promotions in
key areas right across the business, including our new Chief Executive Officer, Joe Lister,
and our Chief Financial Officer, Mike Burt.
First Real Living Wage
employer in the sector.
A culture where
difference is valued.
Best-in-class
training and
careerprogression.
02
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OUR STRATEGY IN ACTION continued
ATTRACTIVE
RETURNS FOR
SHAREHOLDERS
More than a space to live, we provide homes where
students feel they belong, where they can thrive.
CREATING A HOME FOR SUCCESS
OUR PURPOSE
OUR STRATEGIC OBJECTIVES
DELIVERING
FOR OUR
CUSTOMERS
AND
UNIVERSITIES
A RESPONSIBLE
AND RESILIENT
BUSINESS
Keeping
ussafe
Creating room
for everyone
Raising the
bar together
Doing
what’sright
GUIDED BY OUR VALUES
Read more 4 Read more 6 Read more 8
02 03
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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OUR STRATEGY IN ACTION continued
DELIVERING
FOR OUR
CUSTOMERS AND
UNIVERSITIES
We are proud to be the UK’s leading
provider of purpose-built student
accommodation (PBSA). Founded in
Bristol in 1991, we have decades of
experience developing and operating
student accommodation across the UK,
so we know what works.
Our experience shapes how we are delivering
for our customers and universities. We provide
high-quality homes, equipped with passionate
and committed teams, offering a stand-out
student experience where wellbeing isprioritised.
04
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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CASE STUDY
Providing a supportive living environment
Support to Stay, CARE, a new 24/7 helpline and Aldi voucher trial
Read more about our work in
student mental health.
OUR STRATEGY IN ACTION continued
Our 24/7 Student Wellbeing Helpline and Digital Therapy
initiative was launched in 2023, adding to our existing
welfare support. It provides students with unlimited access
to a British Association for Counselling and Psychotherapy
accredited, 24/7 counselling helpline. This includes an
interpretation service in over 240 languages and online
support resources, including cognitive behavioural therapy.
We provide these services through a partnership with
Endsleigh Insurance, as part of our Support to Stay
framework. The framework aims to give all students a
supportive living environment so they can fulfil their
potential, particularly when experiencing medical,
physical or mental-health difficulties. All our property
teams complete training on a range of student support
matters, including support for students with disabilities,
safeguarding and signposting students for support. Also,
our Resident Ambassadors continue to provide important
peer-to-peer support to students, and lead on social events
within our properties.
Earlier this year, we launched a pilot scheme in partnership
with Aldi supermarket to distribute food vouchers to
students most in need of financial support, at four
universities. Provision was means-tested and recipients
were determined by our university partners – Liverpool
John Moores University, Middlesex University, Birmingham
City University and the University of Westminster.
We also revamped our customer service CARE principles
– Connect, Act, Respect and Encourage – to help students
feel even more welcome within our buildings.
60+
university partnerships
Established provider
of choice for more
than 60 UK universities.
+42
customer Net
PromoterScore
Up 4 points from +38
in2022.
+32
university Net
PromoterScore
Higher Education Trust
(NPS) up 25 points from
+7in 2022.
2,000
new beds
Through an innovative
partnership with
NewcastleUniversity.
£79m
investment
To enhance our
existingproperties.
04 05
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OUR STRATEGY IN ACTION continued
A RESPONSIBLE
AND RESILIENT
BUSINESS
The property sector needs to reduce
its carbon footprint so like many
businesses, we are playing our part.
We are driving lasting improvements
in our sustainability performance
and aspire to lead the living sector
onsustainability.
The targets we have set are ambitious, including
delivering against a plan to become net zero
carbon by 2030 across our existing estate and new
developments. Our efforts on sustainability don’t
just stop with our environmental commitments, we
are also making a positive impact for our employees,
students and young people, and localcommunities.
Through a programme of thought leadership,
wehelp shape the standards which will define the
PBSA and Higher Education sectors for decades
tocome.
06
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CASE STUDY
Leading on sustainability
New Sustainable
ConstructionFramework
Our Sustainable Construction Framework is a roadmap
that lays out our approach to the sustainable design and
construction of new PBSA, refurbishments and retrofits.
It explores how we work internally, as well as with our
supply chain, and identifies key areas of focus. This is
three-pronged, covering supply chains, biodiversity and
socialimpact.
Our core elements include carbon reduction, energy
efficiency and a move towards a circular economy. The
framework is a resource for our own teams and to meet
the needs of external stakeholders, such as investors,
university partners, students and local authorities.
We have already made some significant progress but
recognise there is more work to do. Our new Morriss
House development in Nottingham (pictured) achieved
embodied carbon of c.800kg/m
2
which is 33% below the
RIBA baseline of 1,200kg/m
2
.
Net Zero Carbon by 2030
CDP rating improved from
B to -A, reflecting progress
made in our management
of climate-related risks
andissues.
£2.4m
invested in good causes
Making a difference through
investment in social
impactinitiatives.
99%
of properties A-C EPC rated
Up from 80% in 2022.
29
community projects
Received 9 Gold and 20 Silver
Positive Impact Awards.
Detailed sustainability
achievements
Are covered inmore detail
on pages 4857 of this report
and throughourseparate
Sustainability Report.
Leading positive change
Held our Living Black at
University conference and
published the Living Black
at University Commission
Report, and our research
intoneurodiversity.
OUR STRATEGY IN ACTION continued
The framework shows our aspirations, also ensuring each
development project delivers a great place to live and work.
We want to go beyond carbon reduction in construction
and optimise the performance of our properties.
Other areas include health and wellbeing, water and
long-term resilience against climate change risks. We’re
also looking to enhance the wider impact of our projects
–forcommunities and the environment.
Find out more about our
Sustainable Construction
Framework.
06 07
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OUR STRATEGY IN ACTION continued
ATTRACTIVE
RETURNS FOR
SHAREHOLDERS
There is strong demand for high-quality
student accommodation across the UK
and demographic growth underpins
a positive outlook for several years.
Working closely with university
partners, we are focused on increasing
the supply of much-needed student
accommodation and intend to invest
£200-250 million p.a. to achieve this.
Thiscommitment will free up shared
homes for families.
The UK has a world-leading Higher Education
sector and we are proud to support its ongoing
success. We take our responsibilities seriously as
leaders in the PBSA sector, which contributes £7
billion to the UK economy and is closely aligned
tothe success of world-leading UK universities.
08
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CASE STUDY
Joint venture with Newcastle University
toprovide 2,000 beds
Unite Students has entered into a new joint venture (JV)
partnership with Newcastle University to deliver 2,000
high-quality, affordable beds in 2027 and 2028.
Dependent on gaining planning approval later in 2024,
this sector-leading scheme will provide the Russell Group
university with the opportunity to unlock the potential
of their campus and to deliver much-needed, new
accommodation for their students.
The proposed c.£250 million development will see 1960s
accommodation replaced at the university’s Castle Leazes
site. The JV deepens our existing 20-year relationship with
Newcastle University, which will benefit from our scale
and operational expertise, as well as third-party funding
toimprove the accommodation available to their students.
Construction is expected to commence in early 2025.
Newcastle University will own a 49% stake and Unite
Students a 51% stake, with the remaining funding
comingfrom debt secured against the JV.
£8.7bn
portfolio
Significant opportunity to
enhance our existing £8.7
billion portfolio* through
ongoing, capital programmes.
* Portfolio owned and managed.
8% growth in adjusted EPS
Record earnings and
sustainable rental growth.
£1.3bn
pipeline
Our development pipeline
now totals 7,327 beds.
28% loan-to-value (LTV) ratio
Robust balance sheet with
capital recycled through the
sale of weaker assets.
Unlock campus potential
Deepening relationships
withuniversities to help
themunlock the potential
oftheir campuses.
OUR STRATEGY IN ACTION continued
To support Newcastle University’s accommodation
requirements during the development phase, Unite
Students has separately entered into a four-year
nominationagreement for 1,600 beds in other Unite
Students’ properties in the city.
Read more about the JV.
08 09
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
2023
rank
CITY
COMPLETED
BEDS (23/24)
1 London 12,574
2 Liverpool 5,975
3 Manchester 5,639
4 Birmingham 5,582
5 Leeds 5,533
6 Bristol 4,085
7 Newcastle 3,763
8 Cardiff 3,481
9 Sheffield 2,798
10 Portsmouth 2,706
Top 10 52,136
Total 70,442
WHO WE ARE
 7
 5
 3
 2
 9
 4
 6
 8
 10
 1
Liverpool
Aberdeen
Edinburgh
Glasgow
Newcastle
Durham
Leeds
Sheffield
Manchester
Leicester
Nottingham
Loughborough
Coventry
Birmingham
London
Medway
Bournemouth
Southampton
Bath
Portsmouth
Cardiff
Bristol
Oxford
Beds
70,442
In properties across the UK
Ranked
No.1
The largest provider of student
accommodation inthe UK
University partners
60+
Working alongside university
partners to deliver their
accommodation needs
Properties
158
Operating in 23 cities and towns
across England, Scotland and Wales
KEY STATS
Unite Students is the UK’s largest owner,
manager and developer of purpose-
built student accommodation, meeting
the country’s demand for high-quality
studenthousing.
HOME FOR
SUCCESS
10
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
2023
rank
CITY
COMPLETED
BEDS (23/24)
1 London 12,574
2 Liverpool 5,975
3 Manchester 5,639
4 Birmingham 5,582
5 Leeds 5,533
6 Bristol 4,085
7 Newcastle 3,763
8 Cardiff 3,481
9 Sheffield 2,798
10 Portsmouth 2,706
Top 10 52,136
Total 70,442
WHO WE ARE continued
Karan leads the operational and commercial functions
for Unite Students, working with his team to enhance the
student experience, deliver commercial performance
and raise brand awareness.
Q: How is Unite Students putting students at the heart
of everything it does?
A: “Our focus is on providing a home where students can
thrive. A home that is affordable, supportive, fun, inclusive,
safe, secure, as well as environmentally friendly. It is about
giving our residents the foundation to achieve any of the
goals or ambitions they aspire to.
In line with this, we are investing significantly across our
estate – with £79 million spent on building improvements and
offer enhancements over the last year, and more planned.
It’s also about ensuring our offer is fit for purpose for
all students and we’ve ramped up efforts on customer
segmentation to meet this need effectively.”
Q: Student wellbeing has always been a core focus for
Unite Students, why is it so important?
A: “Our residents are coming to live with us at a pivotal
point in life. They are taking the leap, beginning the
transition to independence and in most cases, living
away from home for the first time. We therefore need
tobe more than just their accommodation provider –
weneed to help them to navigate the change. As a parent,
Iwould expect nothing less if my son was living in a Unite
Studentsproperty.
That’s why we offer 24/7 round-the-clock support at all
our properties, place a focus on creating community and
have clear pathways for any students facing difficulty.
We’re continuously reviewing and improving our approach
here – always ensuring our students have somewhere to
turn, whatever their concern. Last year, we launched our
industry-leading welfare programme, Support to Stay,
which has been well received by students and our university
partners. This year, we have expanded that programme by
including additional counselling and therapy support for
Unite Students’ residents.“
Q&A
with Karan Khanna,
Chief Operating Officer
Q: What measures are you taking to help students
manage the cost-of-living crisis?
A: “We are acutely aware of the cost-of-living pressures
facing students. Here at Unite Students, affordability sits
at the heart of everything we do, and we’re committed
to providing value for money. The Unite Group provides
a range of fixed-price, all-inclusive products – covering
all utility bills, Wi-Fi, contents insurance and 24-hour
security – which gives students certainty on their outgoings
and is highly competitive, compared to other forms of
accommodation. We also have a comprehensive package
ofsupport available for those who may be struggling under
our Support to Stay offer.”
Q: How important is the sustainability agenda for
students when selecting accommodation?
A: “Our research shows that students care deeply about
living in a sustainable way – and so do we. That is why
we are committed to enabling our residents to limit
their impact on the environment day-to-day within
our properties – via substantial investment in energy
management solutions, such as air source heat pumps,
forexample – as well as to progressing towards net zero
asa business.
We also strive to have a positive, long-lasting impact on
the local communities in which we operate. Our colleagues
are actively involved in voluntary Positive Impact schemes,
while many of our properties now incorporate community
spaces. At Hayloft Point, for example, we’ve partnered with
Streets of Growth, a youth intervention charity, providing
them space at a peppercorn annual rent, giving them their
first permanent HQ.
We’ve come a long way on sustainability but there is still
work to do and this is a core focus for 2024.”
Watch Karan Khanna and
Claire Barber, Group Asset
ManagementDirector, as they
answer morequestions.
10 11
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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INVESTMENT CASE
We are the UK’s largest owner, manager and
developer of purpose-built student accommodation.
Aligned to the
strongestuniversities
Our portfolio is increasingly focused
on the UK’s leading universities,
where we see the strongest prospects
for student number growth, and
sustainable income growth.
Value for money
We offer students a value-for-money
living experience, in a community
where they belong and with round-
the-clock support. Our range of
fixed-price, all-inclusive products
cover all utility bills, Wi-Fi, contents
insurance, maintenance and 24-hour
security, giving students certainty on
their outgoings.
Investing to enhance our
operational estate
There is a multi-year opportunity
to enhance rents and reduce
operational costs through
refurbishment projects and energy
efficiency measures which improve
the student experience and reduce
resource use in our buildings.
Structurally
growing sector
Demographic growth
The UK’s 18-year-old population
is set to grow by 16% by 2030,
supporting demand for an
additional c.130k undergraduate
places at current participation rates.
Rising Higher
Educationparticipation
Participation rates for 18-year-olds
going to university have been at
record levels for the past two years,
demonstrating young people’s
desires and recognition of the
opportunities and life experience
that university provides.
Growing international demand
The UK has a world-leading Higher
Education sector and we are seeing
record levels of international
students. The Government is
supportive and is focused on
attracting more students from
Africa, the Middle East and Asian
countries outside ofChina.
Over 60 university partnerships
We are the partner of choice for a
large number of the UK’s leading
universities, reflecting our track
record, focus on student support
and our high-quality, affordable
accommodation and services.
Passionate city teams
Service excellence is delivered
by 1,400 passionate colleagues
who work in our properties. This
brings together our experience of
over 30years of operating in the
PBSAsector.
Sector-leading
operating margins
We drive cost efficiencies through
scale using our PRISM technology
platform. Management fees from
joint ventures and funds cover two-
thirds of our annual overheads.
18-year-old participation
rate in Higher Education 2023/24
35.8%
Alignment to high and
medium-tariff universities
87%
Number of beds let under
nomination agreements for2023/24
37,000
SUSTAINABLE GROWTH
High-quality
portfolio
Best-in-class
operating platform
12
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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INVESTMENT CASE continued
Sustainable rental growth
Underlying rental growth driven by
student demand and contracted
increases under our multi-year
university nomination agreements,
supported by ongoing investment
into our estate.
Growing dividends
As a result of our Real Estate
Investment Trust (REIT) status,
we target sustainable growth in
dividends for our investors. We
distribute 80% of our recurring
earnings each year as dividends.
Targeting attractive total
returnsof 8.5-19% p.a.
Achieved through recurring
earnings, rental growth and
development profits.
Resilient and flexible
balancesheet
We maintain a strong balance sheet
with robust credit metrics. We
nurture strong relationships with
our shareholders, co-investment
partners and debt providers to
ensure continued access to capital.
Market share gains
fromHMOsector
Almost a million students live in
houses in multiple occupation
(HMO), providing a significant
opportunity to attract more non-
first year students.
Development of £200-250m
perannum
Proven ability to drive earnings
and development profits through
our in-house development team.
Investment focused on the strongest
8–10 markets in the UK.
New university partnerships
Opportunities for new
developments on- and off-
campus,as well as partnerships
forthe transfer of universities’
existing accommodationstock.
Emerging young
professional market
Significant potential to expand our
platform to cater for the growing
number of professional renters
living in major student cities.
Net zero carbon
Becoming a net zero carbon
business for both our operations
and developments by 2030, based
on SBTi-validated targets.
Energy-efficient homes
99% of our portfolio already
achieves an EPC rating of A–C with
asset-level plans to reach 100%.
1% of adjusted
profitscommitment
We have committed to donating 1%
of annual adjusted profits to social
initiatives aligned to our purpose
of creating a Home for Success for
students and widening participation
in HigherEducation.
Unite Foundation
Through our financial commitment,
the charity Unite Foundation provides
accommodation scholarships for
estranged and care-experienced
students throughout the course of
their studies.
Total accounting
returns over the
past 10 years
12.4% p.a.
Full-time students living
in university-owned
accommodation or HMOs
1.4 million
Target reduction in
Scope 1+2 carbon
emissions by 2030
56%
High visibility
over returns
Substantial growth
opportunities
Leadership in
sustainability
12 13
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Best-in-class
operating platform
BUSINESS MODEL
We are differentiated by our operating platform,
long-standing university partnerships, our development
expertise and our values.
We manage two co-investment vehicles – Unite UK
Student Accommodation Fund (USAF), a specialist
fund, and London Student Accommodation Vehicle
(LSAV), a 50:50 joint venture with Singapore sovereign
wealth fund GIC which provide recurring fee income
and access to additional capital.
We adopt a consistent sales and operating
model across our entire portfolio, regardless
offundownership.
Manage
We drive sustainable rental growth and improve
the environmental performance of our buildings
through targeted refurbishments, which enhance
thecustomer experience and support our value-for-
money proposition.
We have a range of refurbishment options available,
which are tailored for each property according to
the needs of the relevant customer segment and
demand levels within each city.
Improve
We are trusted by universities and are the provider
of choice for the UK Higher Education sector.
We partner with leading UK universities through
nomination agreements. These partnerships
enable us to support universities in delivering
their accommodation guarantee to first-year
and international students and provide us with
asignificant level of income visibility each year.
Our joint venture with Newcastle University is an
exciting opportunity to deepen our partnership
withthe university and paves the way for further
on-campus or stock transfer partnerships.
Partner
We create a Home for Success for the 70,000
students who live with us.
This is more than a space to live, it is a home where
students feel they belong to a community and where
they can thrive. Our best-in-class welfare support and
operational teams are dedicated to delivering on
this promise.
Serve
HOW WE DO IT
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BUSINESS MODEL continued
We aim to dispose of £100–£150
million p.a. of weaker assets to improve
the quality of our portfolio, increase
alignment to the strongest universities
and strengthen the future rental growth
outlook. This capital recycling provides
funding to invest in new development
opportunities and improvements to our
existing portfolio, while maintaining the
strength of our balance sheet.
Recycle
Portfolio enhancement
We appraise and selectively acquire single assets and
portfolios which enhance portfolio quality, where there
isclear alignment to the strongest universities.
Acquire
We develop high-quality PBSA in the strongest university
markets where the supply/demand imbalance is most
acute. We are focused on delivering our secured pipeline
and adding new schemes in the 8–10 strongest markets.
Weaim to invest c.£200–£250 million p.a. into development
in those markets with the highest barriers to entry, where
our expertise and university relationships give us a significant
competitive edge in delivering schemes.
Develop
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BUSINESS MODEL continued
How we engaged
Our colleagues working in properties
around the country engage with students
on a day-to-day basis, supplemented
by peer-to-peer engagement and social
activities provided by our resident
ambassadors. During the year we
partnered with Endsleigh Insurance
to provide 24/7 access to trained
counsellors and other support services.
We also engage with students using
our MyUnite app, including pre-arrival
support and networking opportunities.
Throughout their stay, students are
encouraged to participate in surveys
and campaigns, such as Personal Safety
Week and Winter Wellbeing and they
are signposted to our Support for You
webpage.
This is complemented by our customer
research programme which includes
surveys on specific issues, providing
arich source of insight.
Value creation in 2023
Embedded the Support to Stay
programme with our university
partners, delivering support when
students needed it most.
Provided access to a 24/7 student
wellbeing helpline and digital
therapyservices.
Trialled new design concepts
for ourbedrooms, kitchens and
amenityspaces.
Supported the award of 106 new
accommodation scholarships by the
Unite Foundation.
Refreshed our service style, CARE, to
further enhance customer service.
Priorities for 2024
We will focus on improving the customer
experience. This will include property
upgrades through refurbishment
projects. We will continue to respond
to the needs of under-represented
students and those with additional
challenges. Upgrades to our technology
platform will deliver an improved end-
to-end experience from booking and
throughout a student’s stay with us.
How we engaged
We held quarterly sessions of our
employee engagement forum,
Culture Matters, during the year with
attendance by Non-Executive Director,
Ilaria del Beato. Feedback from our
representatives has helped to inform
the review of our people-related policies,
see page 94 for further details.
We hold regular Unite Live sessions
with our CEO and key senior leaders
to provide business updates, including
financial and economic factors affecting
the performance, with the opportunity
for employees to askquestions.
We conduct regular employee
engagement surveys with findings
shared with our teams, to help jointly
develop action plans.
Engagement in the company performance
is through the annual bonus scheme.
Reward and recognition
programme introduced in 2023
8% average pay award, with frontline
teams receiving over 10% in uplifts,
maintaining Real Living Wage.
Introduced a sector-leading family
leave policy.
Embedded our diversity, equity,
belonging and wellbeing strategy.
Launched a dedicated training
programme for General Managers.
Launched in 2022, The Academy
delivered 36,000 training events,
through a personalised, tailored
learning experience for ourteams.
Priorities for 2024
Our focus is to provide our employees
with a great place to work.
In 2024 we will focus on delivering on
our talent agenda by investing in our
learning and development programmes
and continuing our focus on diversity,
equity, inclusion and belonging.
How we engaged
Through our Higher Education
engagement team, we meet regularly
with leaders across the UK university
sector. We engage at different levels
within institutions to discuss a range of
topics from strategic planning to day-to-
day operational requirements.
We engage actively in the wider
Higher Education sector, presenting
at conferences and contributing
toresearch.
We have launched the Living Black at
University Commission, to help black
students more easily acclimatise to life
at university.
Value creation in 2023
Provided 37,000 beds to universities
for the 2023/24 academic year.
Secured planning permission to create
a new college at Rushford Court in
Durham with our long-term partners,
the University of Durham and work
started on site.
Our Support to Stay framework links
wellbeing services with those of our
university partners.
A sold-out conference by the Living
Black Commission, the publication
of toolkits on cultural services and
research, an EDI Data Maturity
Framework and practical tips,
resources and case studies.
Priorities for 2024
We will continue to support the growth
ambitions of our university partners
through nomination agreements and
joint venture opportunities which
deepen strategic partnerships.
We will continue our research
programme, in partnership with
universities, so we can better
understand the evolving needs
ofeachcohort of students.
STAKEHOLDER VALUE
Students
Key issues
Value for money
Customer service
Safety and welfare support
Our People
Key issues
Learning and development
Diversity, equity and inclusion
Health, safety and wellbeing
Universities
Key issues
Student experience and welfare
Operational performance
Health and safety
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BUSINESS MODEL continued
How we engaged
The availability of housing is a key
issue for our local communities. We
are focused on supporting the growth
of our university partners through
the delivery of new, high-quality and
affordable student homes, which increase
housing supply and help free up more
traditional housing for families and young
professionals. We also engage actively
with local stakeholders on development
projects so the design of our buildings,
public spaces and community facilities
meet their needs.
Our Positive Impact programme
encourages participation and includes
awards for volunteering projects
undertaken by our employees which
deliver measurable benefits in their
localcommunities.
Value creation in 2023
We committed to the development of
a further 3,000 beds which will free up
more traditional accommodation in
the communities where we operate.
29 community impact projects
received 20 Silver and 9 Gold
PositiveImpact Awards.
22% of all employees participated
involunteering.
Priorities for 2024
We aim to increase community
engagement through our Positive
Impact programme, via volunteering
initiatives delivered by local teams in
ourproperties and central offices.
We will continue to engage with local
authorities and local communities
around sites identified for new
development to explain the potential
community benefits of creating new,
high-quality student accommodation.
How we engaged
We completed the redesign of the
procurement function in 2023, moving
to a standardised approach to the
management of our supply chain. The
role of the function has expanded into
professional services, business services
and construction, in addition to the
existing portfolio of estates, facilities
management, and technology.
We continued to ensure our buildings
meet existing and emerging safety
regulations, including planned work
forthe remediation of cladding.
Underpinned by our Unite Group
Supplier Code and procurement
approaches, we published our
Sustainable Construction Framework
during the year, which will inform how
we procure net zero developments in
the future.
Value creation in 2023
Spent £275 million with suppliers
across development activity, cladding
remediation andrefurbishments.
Higher quality service from suppliers,
supporting improved NPS scores
fromcustomers.
Reduced risk through anenhanced
supplier vettingprocess.
Priorities for 2024
We will expand our new procurement
approach across the wider business and
progress the development ofour new
technology platform withpartners.
We will utilise our Sustainable
Construction Framework, published
at the end of 2023, to inform
the way in which we procure net
zerodevelopments.
How we engaged
We engaged regularly with investors
around our financial results as well as
through ad hoc events, such as property
tours, conferences and meetings. Key
themes for engagement during the
year included our response to higher
inflation, increased interest rates and
the acute shortage of high-quality
student accommodation. These
discussions informed our decision
to raise capital to invest in new
accommodation and accelerate the
upgrade of our existing estate.
We engaged with selected investors
immediately prior to announcing
the capital raise in July to discuss the
proposed use of proceeds and gauge
the level of shareholder support.
In November, the Executive team and
other senior leaders hosted a property
tour in London which focused on the
activity of our development and asset
management teams.
Value creation in 2023
Delivered 99.8% occupancy and
rental growth of 7.4% for the 2023/24
academic year.
8% growth in adjusted earnings per
share (EPS).
Total accounting return of 2.9%.
Full year dividend per share of 35.4p.
Priorities for 2024
We will deliver growth in EPS, through
rental growth, improvement in operating
margins, and investment in our portfolio
while ensuring a robust capital structure.
We aim to achieve this through a strong
sales performance for 2024/25, ongoing
cost discipline and management of
interest rate risk.
Communities
Key issues
Trust and transparency
Housing availability
Local investment and job creation
Suppliers
Key issues
Quality
Performance and efficiency
Risk management
Investors
Key issues
Financial performance
Strategic direction
Sustainability and risk management
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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CHIEF EXECUTIVE’S REVIEW
A POSITIVE
OUTLOOK
FOR THE
YEAR AHEAD
The strength of our relationships
with universities, combined with our
best-in-class operating platform,
strong balance sheet and development
expertise, create unrivalled
opportunities for partnership
both on- and off-campus.
Joe Lister
Chief Executive Officer
The business has performed strongly in 2023, delivering record
earnings and dividends. This reflects the strength of our best-in-
class operating platform, the commitment of our teams and the
ongoing appeal of our value-for-money proposition. We operate in a
structurally growing sector, underpinned by the attractiveness of the
UK’s Higher Education sector to domestic and international students.
The growing shortage of accommodation to meet this demand
supports sustainable rental growth and our standing in the sector
and creates compelling investment opportunities for the business.
Record earnings and dividend
We delivered record occupancy during the year, supporting
growth in adjusted earnings to £184.3 million and adjusted EPS
of 44.3p, up 13% and 8% respectively year-on-year. The impact
of rental growth, development completions and lower interest
costs more than offset increases in operational costs during the
year. The growth in adjusted EPS also reflects the increased share
count following our capital raise in July 2023. IFRS profit before
tax of £102.5 million and EPS of 24.6p (2022: £350.5 million and
87.6p) also reflect the valuation change of our property portfolio
during the year. We have proposed a final dividend of 23.6p
which, if approved, totals 35.4p for the full year, representing
apayout ratio of 80% of adjusted EPS.
Total accounting returns for the year were 2.9%, with adjusted
earnings offsetting a 1% decrease in EPRA NTA per share to 920p.
Our LTV ratio reduced to 28% during the year, reflecting lower
netdebt following the capital raise in July and broadly stable
property valuations.
ADJUSTED EARNINGS
£184.3m
(2023: £163.4)
DIVIDEND PER SHARE
35.4p
(2023: 32.7p)
ADJUSTED EARNINGS PER SHARE
44.3p
(2023: 40.9p)
Watch Joe Lister share
his thoughts on our
performance in 2023
and the future outlook
for the business.
18
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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CHIEF EXECUTIVE’S REVIEW continued
Net debt:EBITDA and ICR also improved to 6.1x and 4.6x
respectively (2022: 7.3x and 3.7x). Our robust balance sheet
provides the financial headroom to deliver our committed
development pipeline and pursue new growth opportunities.
Our key financial performance indicators are set out below:
Financial highlights
1
2023 2022
Adjusted earnings £184.3m £163.4m
Adjusted EPS 44.3p 40.9p
IFRS profit before tax £102.5m £350.5m
IFRS diluted EPS 24.6p 87.6p
Dividend per share 35.4p 32.7p
Adjusted EPS yield 4.8% 4.6%
Total accounting return 2.9% 8.1%
EPRA NTA per share 920p 927p
IFRS net assets per share 931p 944p
Loan to value 28% 31%
1. See glossary for definitions and note 7 for Alternative Performance Measure
calculations and reconciliations. A reconciliation of profit before tax to EPRA
earnings and adjusted earnings is set out in note 7 of the financial statements.
Positive outlook for 2024/25
We continue to see strong demand for our well-located,
value-for-money student accommodation at a time of
declining numbers of Houses in Multiple Occupancy (HMOs),
obsolescence in older university stock and lower levels of
new supply. This is reflected in our strong progress with
reservations for the 2024/25 academic year.
Across the Group’s entire property portfolio, 80% of rooms are
now sold for the 2024/25 academic year, ahead of our typical
leasing pace and slightly below demand in reservation rates
last year (2023/24: 83%).
We have seen increased demand from universities as they look
to secure accommodation earlier in the sales cycle, resulting in
nomination agreements for an additional 1% beds for 2024/25
compared to the same stage of the 2023/24 sales cycle. These
agreements deepen our relationships with universities and
provide income security at rental levels comparable with
direct-let sales.
Direct-let sales have also started well, with customers looking
to secure accommodation early in the sales cycle. We have
continued to see strong demand from UK students as our
product grows in popularity with second- and third-year
students who recognise the value of our all-inclusive product.
As a result of this strong demand and the need to offset cost
pressures in our business, we now expect to deliver rental
growth of at least 6% for 2024/25 (previously at least 5%).
Providing value for money
We are committed to delivering value for money to our
customers and increasing rents at a responsible and sustainable
pace. We recognise the cost-of-living pressures faced by students
and parents and are confident that our fixed price, all-inclusive
offer will continue to provide value for money.
Our rents are 7% more affordable in real terms than 2019 (based
on CPI) and have grown in line with the student maintenance
loan over the same period. Rental increases are a response to
higher operating costs, particularly for utilities and staff, as well
as our commitment to being a Real Living Wage employer.
CASE STUDY
Morriss House opens to students
Our new 705-bed development, Morriss House in
Nottingham, welcomed students at the start of the
2023/24academic year. The development, on Derby Road
in Lenton, had a gross development value of £89 million.
We have a decade-long partnership with the University
of Nottingham, a world-leading university, and this
development is next to the university’s Jubilee Campus.
The property contains low-carbon features, running on
renewable electricity with solar panels installed on the
roofand an all-electric heating system, including air
sourceheat pumps.
Green public space connects the development to the
RiverLeen and the University of Nottingham campus.
Inside, Morriss House has the largest study and social
spaces in Unite Students’ portfolio and an open reception
providing a welcome hub for students, as well as an open-
air amphitheatre. The development, previously a former
car showroom, also provides c.16,000 sq ft (gross internal
area) of a commercial building for external use.
Watch our video to find out
more about this property.
19
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CHIEF EXECUTIVE’S REVIEW continued
Our pricing is comparable in cost to HMOs once bills are
included. This is before allowing for the high quality of our
product and price certainty we provide on utilities and the
additional product and service features we offer, such as
on-hand maintenance teams and 24/7 security, high-speed
Wi-Fi and contents insurance. Our rents have also grown by
less than the wider private rental sector, which rose 10% in
2023 (source: Zoopla), and at a comparable rate to university
ownedaccommodation (source: Cushman &Wakefield).
We also continue to make significant capital investment into
our operating model and estate to improve the customer
experience, as well as the safety and sustainability of our
buildings. During 2023, we continued to enhance the service
weoffer to students through the embedding of our 24/7
operating model, the expansion of our Support to Stay
programme for student wellbeing and the launch of a 24/7
mental health and wellbeing helpline in partnership with
Endsleigh and Health Assured.
Growing shortage of high-quality student homes
Structural factors continue to drive a growing supply/demand
imbalance for student accommodation. Demographic growth
will see the population of UK 18-year-olds increase by 124,000
(16%) by 2030, supporting growing demand for UK Higher
Education. Demand from international students also remains
high, as reflected in the 23% growth in overseas students
since2019/20 (source: HESA).
Many university cities are facing housing shortages and our
investment activity is focused on those markets with the most
acute need. Since 2021, there has been an 8% reduction in the
number of HMOs in England (source: Department for Levelling
Up), equivalent to 100,000-150,000 fewer beds available for
students to rent. Private landlords are choosing to leave the
sector in response to rising mortgage costs and increasing
regulation. New supply of PBSA is also down 60% on pre-
pandemic levels, reflecting planning backlogs and viability
challenges created by higher costs of construction and funding.
Obsolescence of older university accommodation is also expected
to increase due to building age and the need to operate buildings
more sustainably. In many cities, property valuations are below
replacement costs, further constraining new supply.
The combination of these factors has significantly increased
demand for our accommodation in many cities and we expect
this supply challenge to continue for a number of years.
Strategic overview
Our purpose is to deliver a Home for Success to allow students
to make the most of their time at university. We also support
the growth of the UK’s Higher Education sector by delivering
new high-quality, homes that are affordable and sustainable.
We achieve this by partnering with universities to deliver long-
term growth and attractive returns for our shareholders.
Our strategy is focused on three key objectives to deliver
ourpurpose:
Delivering for our customers and universities
Attractive returns for shareholders
Being a responsible and resilient business
Delivering for our customers and universities
We have a best-in-class 24/7/365 operating platform in the
student accommodation sector, underpinned by our PRISM
technology platform, passionate customer-facing teams and
sector-leading student support. We are currently in the process
of a £26 million upgrade to our PRISM platform to enhance
customer experience and deliver operational efficiencies,
which will start to deliver in 2024 with the remainder in 2025.
The impact of our customer initiatives is reflected in an
increase in our Net Promoter Scores to +42 for students
at check-in (2022: +38) and +32 (2022: +7) with university
partners. We are targeting further improvements in our
customer experience during 2024. We have also seen an
increase in our retention of direct-let customers for 2023/24
andthe proportion of beds under nomination agreements
rose to 53% (2022/23: 52%).
Our long-term university relationships remain a key
differentiator for Unite Students and a significant source of
potential growth opportunities. This is reflected in over 90%
of our development pipeline by cost being underpinned by
university partnerships, either through long-term nomination
agreements or a joint venture, in the case of our strategic
partnership with Newcastle University.
Attractive returns for shareholders
We delivered full occupancy for the 2023/24 academic year and
rental growth of 7.4%, reflecting improving market conditions.
Total accounting returns were 2.9% for the year, reflecting
adjusted earnings and broadly stable property valuations
(2022: 8.1%). Strong rental growth offset the valuation impact
of increases in property yields as the market adjusted to an
environment of higher interest rates.
The quality and scale of our portfolio is key to delivering
attractive, sustainable returns for our shareholders. We
successfully delivered £84 million in development and major
asset management projects in the year at a blended yield
on cost of 9%. We continue to recycle capital with a focus on
increasing alignment to the strongest universities and expect
to complete the disposal of a £197 million portfolio in the first
half of 2024 (Unite share: £79 million).
In July 2023, we raised £300 million in equity to accelerate our
investment activity into development and asset management.
We have fully allocated the proceeds and expect the
transaction to enhance earnings and total returns as projects
are delivered between 2024 and 2027. We are tracking further
opportunities in London and strong regional markets at
attractive returns and expect to add to our pipeline in 2024.
Being a responsible and resilient business
Our Sustainability Strategy is focused on delivering a
positiveimpact for our stakeholders. This is driven by the
social contribution we make to the students who live with us,
our employees and local communities as well as our progress
in minimising our impact on the environment. We are proud
to be a Real Living Wage employer and havehonoured the
recommended 10% increase for 2024 for our relevantemployees.
20
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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CHIEF EXECUTIVE’S REVIEW continued
Claire Barber, Group Asset Management Director,
joined Unite Students in January 2023. Here, she
discusses theyear’s key asset management work
andmajor projects planned for 2024.
Q: What were your aims for 2023 and how are these
continuing into 2024?
A: “To create a strong pipeline, be very clear on what we’re
doing and spend the time understanding the buildings so
we can create the best possible offer for the customer.
In 2024, we’re making our biggest ever investment into
building improvement projects. We’re doing this in a way
that’s carefully thought through, so we’re spending money
sensibly. It is about making the right level of investment,
which will be different for each building. It’s about setting
ourselves up for success in the future.
The team has been working to identify an asset
management pipeline. This includes the assets we want
to invest in, how we could potentially segment our offer
to appeal to different types of students and the level of
returnthe investment would create.”
Q: Why do we need to invest?
A: “It is important we provide students with value for
money, and this requires investment in our buildings. I
am leading the business’s estate investment programme,
which will see investment into our estate over the next five
to seven years to ensure we deliver a portfolio that we are
proud of and makes us the home of choice for students.”
Q: How does design and sustainability tie into our
asset management Initiatives projects?
A: “We are trying to take a holistic approach to investment
in our properties, so any projects identified, be these
value-add asset management initiatives (refurbishments
or extensions), estates work, fire safety – we want to link
it altogether, so we only impact the customer once. In all
our projects, sustainability is of paramount importance
and we have a clear path to net zero carbon by 2030.
There is a planned programme ofworks to achieve this.
We’re developing a matrix of specifications with our
new generation design specification, which is still being
developed and tested.
Q&A
with Claire Barber,
Group Asset Management Director
This includes redesigned kitchens, geared more towards
our students having space to socialise and eat together.
It’s not a one-size-fits-all approach, but there will be a clear
evolution of the Unite Students look and feel, including
amenity space, which you can see in our new builds such
as our 705-bed Morriss House in Nottingham.”
Q: What has our work in 2023 meant for
ourstakeholders?
A: “From a student perspective, our work is important
because it enhances their experience. Particularly with
the bedrooms, bathrooms and kitchens. But we’re also
thinking more about how students experience the spaces
they’re in, so we’re being more considered and thoughtful
about how they can meet as a group in a flat. We’ve also
tried to understand what amenity space is well used in our
buildings to meet students’ needs, for example, smaller
study areas.
This year we have focused our investment in projects in
three of our strongest markets – London, Birmingham,
and Edinburgh. Oak Brook Park in Birmingham needed
investment, given its age and increasing student
expectations around quality. Similarly with The Bridge
House in Edinburgh – it’s an impressive location and
great market, so our investment has a big impact on how
the brand is seen. The Bridge House also underwent a
cladding project at the same time, so the building has been
completely transformed both internally and externally.”
Q: What will be the major works in 2024?
A: “Our focus in 2024 will be on two properties in Glasgow,
subject to the relevant consents, and another in Bristol.
Allthree are positioned in incredible locations. Work is also
ongoing in some of our existing properties in London, as
well as broader investment in fire safety improvements in
properties around the country.”
Watch Claire Barber and Karan
Khanna, Chief Operating Officer,
answer more questions around
enhancing the student experience.
21
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CHIEF EXECUTIVE’S REVIEW continued
We continue to make good progress towards our objective
of becoming a net zero carbon business by 2030. During the
year, we invested £8 million in energy initiatives to reduce
consumption, save carbon and ensure ongoing compliance with
regulations. This contributed to a further improvement in the
EPC ratings of our portfolio during the year, with over 99% of
the portfolio now A–C rated (2022: 80%). We have now reduced
the energy intensity of our estate by 8% compared to our
2019 baseline. We also published our sustainable construction
framework, setting out our approach to reducing the embodied
carbon and whole life impact of our development pipeline by
around half by 2030. Our most recent development completions
demonstrate that we on track to deliver this improvement
by2030.
Higher Education and housing policy
Higher Education is one of the UK’s leading sectors,
contributing £130 billion to the economy, delivering world-class
research and supporting employment of more than 750,000
people. Our universities attract young people from around
the world for the quality of learning and life experiencethe
UKoffers.
International students are fundamental to the sector’s
health and contribute £42 billion to the UK economy. The
Government recently reiterated its commitment to hosting
600,000 international students each year, with a focus on
attracting the best and brightest. Changes to UK visa rules
mean that from January 2024, postgraduate taught students
can no longer be accompanied by their family members. We
expect this change to particularly impact postgraduate student
numbers from India and Nigeria, who are more likely to bring
dependants, with a disproportionate impact on lower-ranked
universities. Postgraduates from India and Nigeria accounted
for less than 3% of our bookings for 2023/24. Moreover,
our product offering is focused on single occupancy rooms,
meaning we expect limited direct impact from the change.
The Renters Reform bill is expected to be introduced in late
2024 and will further increase regulatory requirements for
HMO landlords. We expect the change to further reduce the
availability of HMOs as more landlords will choose to leave the
sector, increasing demand for the professionally managed,
sustainable accommodation we provide. Purpose-built student
accommodation is recognised as being different to traditional
rental accommodation, with students seeking accommodation for
one academic year, and has been excluded from the bill’s scope.
We are confident that our alignment to the strongest universities,
high-quality portfolio and responsible approach to rent setting
position us well to navigate potential changes inpolicy.
Management succession
I would like to extend my thanks to Richard Smith and
acknowledge his significant achievements over the last eight
years as CEO. He has been a driving force behind our successful
strategy of aligning to the best universities and building Unite
Students into a purpose-led, responsible business.
I am excited to take over as CEO after 22 years with the business
and look forward to working with the leadership team and all our
colleagues to deliver the next stage of Unite Student’s growth.
Opportunities for growth
We now have our largest ever development pipeline at £1.3
billion, focused on delivering new homes in the most supply
constrained markets and aligned to the UK’s strongest
universities. It will deliver significant earnings and NTA growth
over the next four years. The outlook for development is
strong and we are tracking a number of further opportunities
at attractive returns, which we will look to secure over the next
6–12 months.
Universities increasingly see access to high-quality and
value-for-money accommodation as a barrier to growth.
Funding challenges and competing priorities for capital are
encouraging universities to partner with Unite Students to
deliver new accommodation. This has become more pressing
due to acute housing shortages post-pandemic and growing
obsolescence in university estates. In February we announced
our first joint venture with a university, to redevelop existing
accommodation in partnership with Newcastle University.
The agreement to deliver 2,000 new beds on the University’s
land highlights how Unite Students is uniquely positioned to
address housing shortages.
We believe that there is also an exciting opportunity to
grow our platform in the wider living sector by catering to
the growing number of young professional renters living in
major UK cities. Our pilot asset in Stratford has performed
well during our first full year of ownership and is now fully
integrated into our operational platform. We are exploring
opportunities to grow our operational platform by partnering
with co-investors.
Positive outlook for growth
We are confident in the outlook for the business. Student
accommodation is structurally supported by growing demand
for Higher Education and constrained supply, which supports
long-term sustainable rental growth and creates significant
investment opportunities to deliver new homes.
The strength of our relationships with universities, combined
with our best-in-class operating platform, strong balance sheet
and development expertise creates unrivalled opportunities
for university partnerships both on- and off-campus. We are
the provider of choice for universities seeking nominations
agreements, which underpins over half of our letting activity
each year and underwrites over 90% of our development
pipeline. Our first joint venture with Newcastle University
underlines these qualities and we are confident there is more
to come as we help universities unlock potential housing
supply on their campuses.
Strong reservations support rental growth of least 6% for
the 2024/25 academic year. Despite ongoing cost pressures,
this supports an improvement in our EBIT margin and 3–5%
growth in adjusted EPS in 2024. We expect earnings growth to
accelerate from 2026 as development completions increase.
Rental growth, together with value creation through
planning milestones, development and asset management
supports total accounting returns of 10–12% in 2024, prior
toyieldmovements.
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The key pillars of our strategy reflect our commitment to deliver long-term value for our stakeholders. This means
delivering for our customers and universities by creating a Home for Success for students, providing attractive returns
for shareholders and ensuring we operate as a responsible and resilient business so we can create a positive impact for
the environment, our people and communities.
DELIVERING FOR OUR
CUSTOMERS AND
UNIVERSITIES
STRATEGIC FOCUS
Delivering a best-in-class
studentexperience.
Investment to enhance
ourproperties.
Investment in our
digital capabilities and
technologyplatform.
PROGRESS IN 2023
Further improved student support
through a wellbeing partnership
withEndsleigh.
Significantly improved our Student
Net Promoter Score to+42.
Opened a new development,
Morriss House, in Nottingham
and refurbished three properties
in Edinburgh, Birmingham
andLondon.
OBJECTIVES FOR 2024
Deliver an enhanced
digital experience through
continued investment in our
technologyplatforms.
Deliver our Bromley Place
development in Nottingham for the
2024/25 academic year.
Secure a university partnership
jointventure.
Deliver asset management projects
on around 5,000 beds to further
enhance ourportfolio.
Continue to deliver our technology
upgrade programme to enhance
customer experience.
CREATING A
RESPONSIBLE AND
RESILIENT BUSINESS
STRATEGIC FOCUS
Becoming net zero carbon across
our operations and developments
by2030.
Creating positive impact for
communities and students.
Supporting wider access to
HigherEducation through the
UniteFoundation and sector-
leadingresearch.
Maintaining our proactive approach
tofire safety.
PROGRESS IN 2023
Delivered energy-efficient capital
projects representing over £8.2
million in total investment and
increased the proportion of floor
space achieving A–C EPC ratings
from80% to 99%.
Published our Sustainable
Construction Framework.
Provided 106 new Unite
Foundationscholarships.
OBJECTIVES FOR 2024
Embed our Sustainable Construction
Framework within our supply chain.
Enhance the Unite Group’s reputation
with key stakeholders.
Deliver lasting improvements
in environmental performance
through capital projects and
studentengagement.
Continue to progress fire safety
improvement projects.
ATTRACTIVE
RETURNSFOR
SHAREHOLDERS
STRATEGIC FOCUS
Sustainable growth in rental income
and earnings.
Delivery of attractive total
accountingreturns.
Sourcing new growth opportunities
through development and
universitypartnerships.
PROGRESS IN 2023
Achieved >99% occupancy and
7% rental growth for the 2023/24
academic year.
Committed to five new
developmentschemes.
Delivered 8% adjusted EPS growth.
Raised capital to accelerate growth in
earnings and total returns.
OBJECTIVES FOR 2024
Secure new investment opportunities
through development and
universitypartnerships.
Deliver 10–12% total accounting
return before yield movement.
Continue asset disposals to recycle
capital and enhance portfolio quality.
Grow EBIT margin by around
0.5–1.0%.
OUR STRATEGIC OBJECTIVES
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Q: You both secured internal promotions at the start
of January 2024. What are your main ambitions for the
business goingforward?
Joe Lister: “I’ve taken over the role of Chief Executive at a time
of great opportunity. Unite Students is poised to take advantage
of a significant period of growth thanks to our unique position,
market-leading platform, and unrivalled relationships with
university partners.
Growth is, therefore, absolutely a key ambition for the business
going forward. There is a shortage in student accommodation and
we are focused on increasing supply of high-quality, affordable
homes through our development pipeline and by helping
universities to unlock the value of their campuses.
Ensuring Unite Students continues to be a great place to live is
also front of mind. We’re committed to making sure that our all-
inclusive proposition remains relevant to evolving student needs
– and a broad student mix. More than just a space to live, we offer
a home and a community – where students can thrive.
An enhanced employee proposition is another key ambition for
me as we look ahead – ensuring that Unite Students is a great
place to work. We want to attract and nurture the best talent –
which is why we’re proud to be the first in our sector to be a Real
Living Wage employer and are committed to offering our staff
best-in-class training and career progression opportunities.”
CEO AND CFO Q&A
Watch Joe Lister and Mike Burt
sharetheir thoughts on our performance
in 2023.
with Joe Lister, Chief Executive Officer
& Mike Burt, Chief Financial Officer
Q&A
Q: What are the main areas of focus in 2024?
Joe Lister: “An immediate focus of mine has been visiting all our
sites and cities to speak to people on the ground. I want people to
know they’re being listened to – to make sure I fully understand
their concerns and where they see opportunities. This will be
crucial in ensuring a smooth transition for the new leadership
team. I’m honoured to have received such a positive reception
so far but that’s not something I – or any of us – want to take for
granted. That also links to our focus on culture and values. We
want to build on a culture where difference is valued so that all
our customers and employees feel they belong.”
Mike Burt: “As Joe has said, culture and clearly-understood values
are hugely important to all of us at Unite Students. That filters
through to our overarching purpose: creating a Home for Success.
A key area of focus throughout 2024 must be doing the right thing
for all our stakeholders. That includes our customers, universities,
local communities, and our investors.
Putting us in the best possible position for sustainable growth is
key. The acute need for new student beds supports the strongest
growth outlook Unite Students has seen for several years. We
have a fantastic pipeline of 7,300 beds in the strongest university
cities, which will see us invest around £1.2 billion to increase the
supply of much-needed student accommodation. Delivering our
growth potential while also maintaining a high-quality balance
sheet is crucial, which is why we chose to raise equity in 2023 to
support our future growth ambitions.”
Unite Students now accounts for
4 in 10 beds nominated by Higher
Education institutions, and this
is a key area of growth potential.
We’re trusted by universities
to deliver safe, high-quality
homes and a stand-out student
experience, where everyone’s
wellbeing is prioritised.
Joe Lister
Chief Executive Officer
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CEO AND CFO Q&A continued
Q: How do you plan to build on three decades of success?
Mike Burt: “It’s an exciting time for us and the sector – and
we’re fortunate to find ourselves in a position where we can
continue to grow our platform and go from strength to strength.
The growth we’ve delivered in the past gives us the foundations
to push ahead and thanks to our track record we are a partner
ofchoice for the UK Higher Education sector.”
Joe Lister: “Those strong relationships and historical ties are
key. Unite Students now accounts for 4 in 10 beds nominated
by Higher Education institutions, and this is a key area of growth
potential for us. That we’re trusted by universities to deliver safe,
high-quality homes and a stand-out student experience, where
everyone’s wellbeing is prioritised, is testament to our successes
to date. We see huge potential for working collaboratively with
university partners further, to unlock the full potential of their
campuses. That’s why we’re so excited about our joint venture
with Newcastle University, an industry-first deal which will
deliver 2,000 affordable beds to students.”
Q: How will you continue to make Unite Students a great
place to work?
Joe Lister: “Our Home for Success ethos extends to all those who
work with us.
We are focused on being a great place to work and, as we’ve said,
are working to create a culture where everyone can thrive. Part of
that is building and supporting great frontline teams and we have
various initiatives to help attract and nurture the best talent.
I’m really excited by the potential of The Academy, which was
launched in October 2022 and encourages on-the-job learning and
development for colleagues across all career stages. This ranges
from fast-track leadership training to mentoring and coaching.
Our strong employee offer and staff benefits provide a great place
to build a meaningful career.
We’re working with young people at such an important time of
their lives and as such that gives us a huge opportunity to provide
real value to them. Our teams frequently go above and beyond
and volunteer in local communities, which is so important and
appreciated by our students.”
Q: What do you think investors are looking for as the
business grows?
Mike Burt: “It’s clearly a challenging time for many businesses.
We’re operating in a high cost and inflationary environment which
impacts the viability of new development, alongside a broader
cost-of-living crisis. Generating value and sustainable growth for
our investors, while also maintaining a prudent approach to costs,
is key. It’s about balance right now.
Our strong track record, high-quality balance sheet and disciplined
approach to capital allocation is very important to investors.
Our approach, a really strong team and a stand-out customer
proposition delivers sustainable growth in earnings and dividends,
backed by a high-quality balance sheet, which translates to
attractive returns for our investors.”
Q: How is sustainability going to shape how we do
businessin future?
Joe Lister: “We aspire to lead the living sector on sustainability
that’s important to us and is reflected by our ambitious targets.
We’re already delivering against our plan to become a net zero
carbon business by 2030 and are committed to having a positive
impact on people and the communities in which we operate.
We’re also delivering against our new Sustainable Construction
Framework which formalises our approach to sustainable design
and construction, as well as looking at how we reduce carbon
emissions internally and with supply chain partners.”
Mike Burt: “We’ve invested c.£50 million in sustainability
improvements since 2018, which sets us in good stead. Our
sustainability framework sets our growing social impact within the
context of our wider sustainability goals, which is important to us.
We now commit to donating 1% of our adjusted profits to
social initiatives, to ensure we are continuously giving back. This
delivered £2.4 million of investment last year and, as part of that,
we’re proud of our continued support of the Unite Foundation,
which does vital work for care leavers and estranged students.
Over 700 young people have now benefited from accommodation
scholarships since 2012.
In addition, research we commissioned in 2023 showed that
purpose-built student accommodation contributed more than
£7 billion to the national economy through operational costs and
spending of undergraduate students, demonstrating the impact of
the sector.”
Q: How will Unite Students maintain its
sector-leadingposition?
Joe Lister: “As we’ve said, we believe we have a really exciting
future and are well-positioned to build on our successes to date.
As well as providing significant socio-economic benefits to the
areas in which we operate, student accommodation is a vital part
of the university experience.
However, the UK is increasingly short of suitable, high-quality
accommodation – especially as HMO landlords continue to leave
the market. We therefore have a crucial role to play in increasing
supply and we have a clear strategy to do so – maintaining our
sector-leading position at the same time. In addition, our ongoing
investment into building enhancements, new technology and our
broader service offering means we can be confident of providing
the best possible proposition and support to our students.”
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The outlook for our business is influenced by structural trends in Higher Education and student accommodation,
which impact the size of our addressable market. Cyclical factors also have an impact on the economic conditions
we face, the cost and availability of funding for the business and our investment plans. Together these factors
influence our strategy and the long-term growth prospects of the Unite Group.
UK Higher Education policy recognises the global standing
of the UK’s universities, including how universities attract
students from all over the world, conduct vital research and
contribute £42 billion to the UK economy, and the benefits
this provides to our society.
The Higher Education sector regulator, the Office for Students
(OfS), is responsible for monitoring the quality of HE provision
to ensure successful outcomes for students. The OfS has
established minimum expectations for course continuation,
completion rates and graduate outcomes, to determine if
perceived low-quality courses should be subject to caps on
student numbers.
Changes to visa rules, which become effective in 2024, mean
postgraduate taught students will no longer be able to bring
dependant family members to live with them in the UK.
Private landlords face a growing regulatory burden. Minimum
EPC standards, local authority licencing and the upcoming
Renters Reform Bill all add to the challenges of being an
HMOlandlord and some will choose to leave the sector.
The number of full-time students in UK Higher Education
hasgrown by 545,000 (32%) over the past 10 years,
driven bya combination of rising participation rates
andinternationalgrowth.
The application rate to university by UK school leavers is
above pre-pandemic levels, reflecting the continued value
young adults place on a higher level of education and the life
experience and opportunities it offers. There has also been
significant growth in postgraduate students over the last four
years, with an extra 190,000 students compared to 2017/18.
International student numbers have also continued to grow
thanks to increased demand from non-EU markets such
as China and India, more than offsetting a reduction in EU
student numbers post-Brexit.
Looking forward, there is potential for strong growth
in student numbers over the next decade. This reflects
significant demographic growth, which will see the population
of UK 18-year-olds increase by 124,000 (16%) by 2030.
Government
policy
Growing demand for
Higher Education
What it means for Unite Students
Potential for stronger growth in student numbers
forthose universities and cities delivering high-quality
teaching, strong employment prospects for graduates
and internationally recognised research.
Changes to visa policy, restricting the ability of
taught postgraduate students to bring dependant
family members to the UK, are unlikely to significantly
impact demand for our single occupancy rooms. Our
portfolio also has limited indirect exposure to those
cities and universities expected to be most negatively
impacted by the visa change.
We are confident that our strategic alignment to
high- and mid-ranked universities positions us
to successfully navigate future changes in the
Government’s Higher Education policy.
What it means for Unite Students
Increased demand for PBSA from students and
universitypartners.
Opportunities for new development in markets
wherethe supply/demand imbalance is greatest.
MARKET TRENDS
MARKET OVERVIEW
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MARKET OVERVIEW continued
The number of households living in the private rented sector
in England and Wales has more than doubled over the
past 20 years. As a result, government policy in the private
rented sector is focused on ensuring that homes are of good
quality and safe for tenants. The Government estimates that
over a fifth of privately rented homes are in poor condition
and launched a consultation in the second half of 2022
on whether minimum standards should be introduced.
The Renters (Reform) Bill will increase tenants’ rights and
may reduce the attractiveness of letting to students, if
they are able to end tenancies early. PBSA is recognised by
theGovernment as being different to traditional HMOs and
has been removed from the draft legislation.
The Government has recognised the shortage of housing
inthe UK and the need for new housing in our markets.
The UK’s commitment to achieve net zero carbon by 2050
willrequire significant reductions in energy use from domestic
properties. This includes potentially increasing minimum energy
efficiency standards (MEES) which require rental properties to
achieve EPC ratings of at least C by 2027 and B by 2030.
Universities recognise that high-quality and affordable
student accommodation is a major differentiator in their
ability to attract and retain students. They will typically seek
toguarantee accommodation for their domestic first-year and
international students. Universities own around 300,000 beds
of their own accommodation but new investment tends to
be prioritised towards their academic estate and investment
in research capabilities. As a result, universities have relied
on private PBSA owners to deliver new accommodation to
support growth in student numbers.
Inflationary pressures and higher interest rates have increased
the operational and financial challenges faced by universities
and there is a growing appetite for partnerships with leading
operators of student accommodation.
Focus on quality,
sustainable housing
University
outsourcing
Structural trends
Demand for PBSA is underpinned by a range of structural
drivers, which support growth in student numbers for UK
Higher Education.
What it means for Unite Students
Growing regulation of the HMO sector may
resultinmore private landlords seeking to exit
themarket, creating opportunities for the PBSA
sectorto capture a growing share of students
requiring accommodation.
Increasing likelihood of a green premium or
brown discount for PBSA assets as sustainability
considerations grow in importance for stakeholders.
The growing number of long-term renters in the UK
supports the growth of the build-to-rent sector. We
believe there is an opportunity to grow our platform
in the living sector by catering to the growing number
of young professionals living in major UK cities.
What it means for Unite Students
Demand for new, long-term nomination agreements
with universities.
Opportunities for strategic university partnerships
for on- and off-campus development, as well as the
transfer of existing accommodation stock, requiring
investment andrepositioning.
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Cyclical trends
Economic and financial conditions have become more challenging over the past year. Demand
forHigher Education and student accommodation has historically proven to be non-cyclical and the
business is protected from rising costs through rental growth and its risk management approach.
MARKET OVERVIEW continued
What it means for Unite Students
We raised capital during the year to commit to
developing two new schemes and accelerate asset
management investment.
We reduced our medium-term LTV target to c.30% in
response to higher funding costs which have made
debt less attractive.
We anticipate a gradual increase in our cost of debt
as we refinance debt facilities put in place at a time of
lower interest rates.
It is possible we will see a further rise in valuation
yields for PBSA in 2024, albeit the strong outlook
for rental growth is expected to offset the negative
impact on propertyvaluations.
We expect attractive opportunities to emerge for
new acquisitions and developments given the
funding constraints faced by some PBSA owners
anddevelopers.
What it means for Unite Students
Inflation has a positive impact on rental growth
through the c.33% of our beds under nomination
agreements with contractual uplifts linked to RPI or
CPI. All of our beds are repriced annually, either based
on open-market lettings, index-linked or fixed uplift
nomination agreements. We will monitor the impact
of inflationary pressures on our student customers
and their guarantors to ensure we continue to offer
affordable, value-for-money accommodation.
We expect increases in operating costs and
overheads in 2024, particularly around utility and
staff costs, which we will mitigate through operational
efficiencies, as well as higher income growth for the
2023/24 and 2024/25 academic years.
Interest rates have remained at elevated levels over the past
year. Rates are now expected to moderate in 2024 but remain
above levels seen between 2015 and 2021. Liquidity has also
reduced in debt and equity capital markets resulting in above-
average borrowing spreads for companies and limited capital
raising activity.
Investment volumes for PBSA assets were lower in 2023
than recent years, reflecting the more challenging funding
environment for potential purchasers. Valuation yields
have risen gradually over the year, reflecting the impact of
these tighter funding conditions. Despite these short-term
pressures, the PBSA sector’s fundamentals continue to
attractsignificant levels of institutional capital from the UK
and international investors.
Our portfolio currently yields 5.0%, which offers attractive
returns given the positive outlook for rental growth.
Inflation and interest rates appear to have peaked in the UK,
with modest economic growth expected through 2024. There
will be a general election in 2024, with potential for changes in
economic policy by either main party.
Funding
conditions
Economic
outlook
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MARKET OVERVIEW continued
What it means for Unite Students
We are focused on developing in the strongest
markets where the supply/demand imbalance
isgreatest.
We are targeting higher returns on new development
activity to reflect the higher funding cost environment,
which will require a reduction in land values or build
costs as well as potentially increased rents.
More predictable build costs mean greater confidence
in returns from development, supporting our ability
to commit to newschemes.
Property values are now below replacement costs in
several cities, creating significant opportunities to invest
in asset management projects in our existing estate.
What it means for Unite Students
Tight supply conditions and healthy student demand
are supportive of full occupancy for the 2024/25
academic year.
Lower supply of HMO properties and increasing costs
for tenants in the HMO sector create an opportunity
to retain more first-year customers who might
otherwise move into the HMO sector.
Reducing construction activity in the PBSA sector and
wider economy is likely to result in a reduction in land
pricing and construction costs over time.
Slowing development activity will create significant
demand/supply imbalances in stronger markets, which
increases the attractiveness of development activity.
Construction costs have risen significantly since the pandemic
due to a shortage of raw materials, rising energy costs and
a tight labour market. However, we are seeing a moderation
in price rises as commodity prices stabilise, coupled with a
broader economic slowdown. The rise in development costs
has created viability challenges for new PBSA development
in a number of our markets, where the minimum rents
required to justify new development (£180–£190 per week)
are unaffordable relative to alternative options in the local
market. This is resulting in lower volumes of new supply and
is contributing to a reduction in land values.
With modest economic growth expected through 2024 we
anticipate that pricing for build contracts may become more
competitive, as well as potential reductions in land values
from competing uses.
There has been a steady slowdown in the new supply of PBSA
from a peak of 30,000–35,000 beds p.a. in 2017–2019 to less
than 15,000 beds delivered in 2023. This reflects delays to
development deliveries resulting from planning delays, as
wellas more restrictive funding conditions fordevelopers.
The stock of student housing in the HMO sector is also
expected to reduce as a result of increasing regulation for
private landlords. This includes increasing minimum energy
efficiency standards (MEES), which will potentially require
rental properties to achieve EPC ratings of at least C by 2027
and B by 2030, and proposed changes in regulation through
the Renters (Reform) Bill. Rising mortgage interest costs will
reduce financial returns available in the sector. This will result
in additional costs for HMO landlords and may see many
choose to exit the market, which we expect to be reflected
inhigher rents for students living in HMOs.
Development
viability
Competing
supply
29
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37.1p
2019
24.0p
2020
27.6p
2021
40.9p
2022
44.3p
2023
20222020
847p
818p
882p
927p
20212019
2023
920p
11.7%
2019 2020
10.2%
2021
8.1%
2022
2.9%
2023
31%
37%
2019
34%
2020
29%
2021 2022
28%
2023
-3.4%
KEY PERFORMANCE INDICATORS
Financial KPIs
1. The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). The Unite Group uses Alternative Performance
Measures (APMs), which are not defined or specified under IFRS. These APMs, which are not considered to be a substitute for IFRS measures, provide additional
helpful information and are based on the European Public Real Estate Association (EPRA) best practice recommendations. The metrics are also used internally
to measure and manage the business and to align to the performance-related conditions for Directors’ remuneration. See glossary for definitions and note 8 for
calculations and reconciliations.
Adjusted earnings
per share
1
(p)
44.3p
EPRA NTA
per share
1
(p)
920p
Total accounting
return (%)
2.9%
Loan-to-value
ratio (%)
28%
Link to remuneration
Bonus and LTIP
Measure
EPRA NTA per share measures
the market value of rental
properties and developments,
less any debt used to fund
them, and working capital in
the business.
Performance in 2023
The NTA decrease reflects
an increase in the value of
the Unite Group’s property
portfolio, additional
provisions for cladding
remediation projects and
retained profits.
Priorities going
forward
Grow NTA through rental
growth, asset management
and development profits,
while continuing to maintain
the portfolio and remedy fire
safety defects.
Link to remuneration
Bonus and LTIP
Measure
Total accounting return
measures the NTA in EPRA
NTA per share plus dividends
paid, as a percentage of
opening EPRA NTA per share.
Performance in 2023
Dividends paid of 35.4p were
the key driver, together with
a small reduction in NTA.
Priorities going
forward
Deliver 10–12% total
accounting return in 2024
through dividends and
NTAgrowth prior to any
yieldmovement.
Link to remuneration
Bonus
Measure
Loan-to-value measures net
debt as a proportion of the
value of our rental properties
and developments, on a
Unite Group share basis.
Performance in 2023
The decrease in LTV during
the year was primarily driven
by our £300 million capital
raise, partially offset by
capital expenditure on our
development pipeline and
rental properties.
Priorities going
forward
Maintain a strong balance
sheet with LTV of c.30% in
the medium term. Continue
capital recycling through
disposals to fund new
investment in development
and asset management.
Link to remuneration
Bonus and long-term
incentive plan (LTIP)
Measure
Adjusted earnings measures
the recurring profit delivered
by operating activities, on a
per share basis.
Performance in 2023
The business delivered
a strong operational
performance in 2023, with
adjusted earnings of 44.3p,
up 8% year-on-year. This
reflects sustained occupancy
of 99.8% and rental growth
of 7.4% for the 2023/24
academic year.
Priorities going
forward
Deliver sustainable growth
in adjusted EPS through full
occupancy for the 2024/25
academic year and cost
discipline.
30
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
2
2019
12
2020
7
2021
7
2022
1
2023
2019 2020
35
2021
38
2022
44
33
42
2023
20
2021
24
2019
N/A
2020
7
2022
32
2023
74
75
65
78
2019 2020 2021 2022
70
2023
KEY PERFORMANCE INDICATORS continued
Operational KPIs
Safety
(number of accidents)
1
Customer
satisfaction
+42
Employee
engagement
70
Higher Education
Trust
+32
Link to remuneration
Taken into consideration
Measure
The number of RIDDOR
reportable accidents in
our health and operations
each year acts as an
indicator of our health
andsafetymanagement.
Performance in 2023
There was 1 RIDDOR with
an accident frequency rate
of 0.03 for 2023. There were
nosignificant trends in terms
ofcausation.
Priorities going
forward
Our focus for 2024 will be
improving our safety culture,
colleague engagement
and competence. We will
ensure our people have
the tools they need to work
effectively while continuing
to review our health and
safety trainingcourses,
alongside our learning
anddevelopment team.
Link to remuneration
Bonus
Measure
Customer Net Promoter
Score (NPS) provides a
commercially relevant
customer experience
measure, based on an annual
externally provided survey.
Performance in 2023
The Net Promoter Score
for our 2023 student arrival
check-in was +42, a 4-point
improvement year-on-year,
after adjusting for properties
that were non-comparable
due to cladding remediation
works. Improvement in
the score followed further
training being delivered in
our Class of ‘23 programme
and the launch of our CARE
customer service model, to
give our teams the tools for a
service excellenceexperience.
Priorities going
forward
With the continued
investment in training city
teams, further improvement
in NPS isanticipated.
Link to remuneration
Bonus
Measure
Independent, anonymous
surveys are undertaken
by an external provider
amongst our employees to
gain regular and insightful
feedback on how they feel
and how we can continue
toimprove.
Performance in 2023
Employee engagement
for 2023 was 70, a 5-point
improvement year-on-year.
2023 was a challenging
year for our people, in
part due to cost-of-living
pressures, but also as a
result of implementing our
new operating model and
there was above average
employeeturnover.
Priorities going
forward
Providing training sessions
and supporting toolkits to
line managers, enabling
them to take appropriate
and meaningful action for
theirteams.
Bi-annual surveys will be
undertaken, supplemented
by a number of other
engagement channels.
Link to remuneration
Bonus
Measure
The Higher Education (HE)
Net Promoter Score (NPS)
provides a measure of how we
have met the needs of our
Higher Education partners
and their perception of
UniteStudents.
Performance in 2023
The HE Net Promoter
Score (NPS) for 2023 was
+32, a 25-point increase
from +7 in 2022. Our local
teams have worked hard
all year to develop the
kind of partnership that
universities want – proactive,
collaborative, delivering a
great student experience, and
adding value to universities by
sharing newideas.
Universities have praised
our approach to student
support and the wider student
experience and the value that
we add to the sector through
our research.
Priorities going
forward
We are committed to
further strengthening our
relationships with universities
and anticipate continuing
improvement of the NPS.
31
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ADJUSTED EPS
44.3p
(2022: 40.9p)
TOTAL ACCOUNTING RETURN
2.9%
(2022: 8.1%)
LOAN-TO-VALUE RATIO
28%
(2022: 31%)
Watch Joe Lister,
ChiefExecutive, and
Mike Burt answer
morequestions.
A POSITIVE
OUTLOOK
FOR THE
YEAR AHEAD
Rents increased by 7.4% on a
like-for-like basis for 2023/24. We
maintained a high proportion of
income let to universities, with 53%
of beds provided under nomination
agreements while also achieving our
highest ever university NPS score.
Mike Burt
Chief Financial Officer
Operations Review
Full occupancy for 2023/24
We achieved occupancy of 99.8% across our total portfolio
for the 2023/24 academic year (2022/23: 99.2%), reflecting
the quality of our offer and university relationships, strong
student demand and the shortage of supply in many markets.
We have been deliberate in aligning our portfolio to high and
medium-tariff universities, where the number of accepted applicants
grew slightly for the 2023/24 academic year. By contrast, lower-tariff
universities saw a 5% reduction in acceptances, continuing the trend
of the past decade for a flight to quality. Our portfolio is 93% aligned
to Russell Group markets, where the number of accepted students
rose by 2% year-on-year and is now 7% above pre-pandemic
levels. Overall, the undergraduate intake for 2023/24 reduced by
2% to 554,000 (2022/23: 563,000), but remained 2% higher than
pre-pandemic levels.
FINANCIAL REVIEW
32
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
FINANCIAL REVIEW continued
Strong rental growth
Annual rents increased by 7.4% on a like-for-like basis for
2023/24 (2022/23: 3.5%), reflecting average increases of 7.7%
for nomination agreements and 7.1% for direct-let tenancies.
Rental growth from our nomination agreements exceeded the
portfolio average despite the rental caps in place on many of our
multi-year nomination agreements. This reflects our success in
agreeing increased rental levels on renewals of single-year deals
and new multi-year agreements where our university partners
recognise the value our accommodation provides at a time
of increasing costs. Continued enhancements to our service
and product offering drove strong demand and supported the
increase in our check-in NPS score to +42 (2022: +38). Occupancy
was broadly consistent across our wholly-owned portfolio, USAF
and LSAV, with limited availability in all markets.
2023/24 rental growth
andoccupancy Rental growth
1
Occupancy
2
Nomination agreements 7.7%
Direct-let 7.1%
Total 7.4% 99.8%
1. Like-for-like properties based on annual value of core student tenancies.
2. Beds sold.
We have maintained a high proportion of income let to
universities, with 37,143 beds (53% of total) provided under
nomination agreements for 2023/24 (2022/23: 36,611 and
52%). The increase in the percentage of beds under nomination
agreements reflects universities’ growing reliance on partners
to meet their accommodation needs. We achieved our highest
ever university NPS score of +32 (2022: +7), recognising our
sector-leading student welfare offer, Support to Stay, and
thought leadership in the sector.
The unexpired term of our nomination agreements is 5.8years,
down slightly from 6.3 years in 2022/23. A balance of nomination
agreements and direct-let beds provides the benefit of having
income secured by universities, as well as the ability to offer
rooms to re-bookers and postgraduates and determine market
pricing on an annual basis. We expect to maintain nomination
agreements between 50–60% of beds going forward.
65% of our nomination agreements, by income, are multi-
year and therefore benefit from annual fixed or inflation-
linked uplifts based on RPI or CPI. The remaining agreements
are single year, and we achieved a renewal rate of 89% with
universities for 2023/24 (2022/23: 92%). As inflation reduces,
index-linked agreements will move below their capped annual
uplifts, meaning a return to historical levels of rental growth
over time.
Agreement length
Beds
2023/24
% Income
2023/24
Single year 12,877 35%
2–5 years 6,535 19%
6–10 years 5,362 15%
11–20 years 6,581 16%
20+ years 5,788 15%
Total 37,143 100%
UK students account for 72% of our customers for 2023/24
(2022/23: 72%), making up a large proportion of the beds
under nomination agreements with universities. This
represents a significant increase in our weighting to UK
students over recent years, compared to 60% immediately
prior to the pandemic, and reflects our success in retaining
second- and third-year students who might have historically
moved into the HMO sector. In addition, 26% and 2% of our
customers come from non-EU and EU countries respectively
(2022/23: 25% and 3%).
33
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
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FINANCIAL REVIEW continued
Operations Review continued
Postgraduates make up around 20% of our direct-let customer
base and re-bookers accounted for 43% of our direct-let bookings
for the 2023/24 academic year (2022/23: 39%), reflecting the
proactive retention campaign in our properties. The growing
share of postgraduate and non-first-year undergraduate students
in our properties, who typically seek greater independence,
supports our strategy of increasing the segmentation of our
customer offer to capture market share form the traditional
HMOsector.
Occupancy by type and domicile by academic year
Direct-let
Nominations UK China EU
Non-
EU Total
2020/21 53% 16% 11% 4% 4% 88%
2021/22 51% 21% 13% 3% 6% 94%
2022/23 52% 24% 14% 2% 7% 99%
2023/24 53% 24% 13% 2% 8% 100%
Positive outlook for 2024/25
Applications data for the 2024/25 academic year is encouraging,
with total applications flat on 2023/24 but still 6% ahead of pre-
pandemic levels. We continue to see strongest demand for the
high and mid-tariff universities to which we have aligned our
portfolio. Application rates remain strong for UK 18-year-olds
at 41.3% and there continues to be significant unmet demand
for university places, as demonstrated by the nearly 200,000
unplaced students in 2023/24. Applications from international
students are 1% higher for 2024/25, with 2% growth from non-EU
markets more than offsetting a 3% reduction in EU applicants.
Demand for the Group’s accommodation remains strong.
Across the Group’s entire property portfolio, 80% of rooms are
now reserved for the 2024/25 academic year, which is ahead of
our typical leasing pace. We have seen increased early demand
from universities who see quality accommodation as a key part
of their offer to prospective students. Current reservations
under nomination agreements account for 55% of available
beds for 2024/25, an increase of two percentage points
compared to 2023/24.
In our strongest markets, we have also seen students looking to
secure accommodation early in the sales cycle. Our nominations
and direct-let sales performance is supportive of our guidance
for full occupancy and rental growth of at least 6% for the
2024/25 academic year (previously at least 5%).
Technology upgrade to enhance customer experience
and operating margins
We are in the process of upgrading our end-to-end technology
systems to enhance customer experience and drive efficiencies
which deliver margin improvement. The project is our largest
investment in technology since the implementation of PRISM
in 2016 and will deliver enhanced systems for customer
relationship and property management, as well as improved
booking and marketing platforms. The initial phase of
upgrades has now been implemented, with the remaining
elements of the programme expected to be delivered over
the next 12–24 months. Around half of the total £26 million
programme cost has already been incurred. We expect to
achieve a payback of under five years through enhanced
utilisation and cost efficiencies which will increase our EBIT
margin by around 1%, as benefits accrue from mid-FY2025.
Software as a Service accounting
Our technology upgrade project includes transitioning from
traditional on-premises solutions to a predominantly cloud-
based Software as a Service (SaaS) model. Following a review
of our accounting treatment, implementation costs which
were previously capitalised will now be recognised as an
expense when incurred. £12.8 million of costs have already
been expensed in 2022 and 2023, reflecting around half of the
overall project costs. We expect to incur around £10 million of
further implementation costs in FY2024 and the remaining £3
million in FY2025. To better reflect the underlying operating
performance of the business, these implementation costs will
be removed from adjusted earnings. Post implementation,
technology licence costs will be expensed on a recurring basis.
Following completion of the technology upgrade, we expect a
reduction in annual depreciation and amortisation charges of
around £3 million from FY2026 due to less intangible assets.
The change has no impact on EPRA NTA, which excludes
intangible assets. Further information is included within
section 1 of the financial statements.
34
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
FINANCIAL REVIEW continued
Operating costs
Inflation remained higher than expected through the year and
resulted in our operating costs growing faster than initially
expected. We are partially protected but not immune from
the effects of inflation on our cost base, thanks to our hedging
policies and proactive steps to deliver efficiencies through
technology and a review of discretionary spend. Inflationary
pressures, combined with higher marginal costs from increased
occupancy, resulted in a 4% increase in property operating costs
during 2023.
Staff costs increased by £1.5 million due to underlying wage
increases, driven by the pay award for 2023.
We hedge our utility costs in advance of letting rooms, providing
visibility over our cost base at the point of sale. This policy
helped limit utility cost increases to 18% or £4.1 million during
the year. Our utility costs are fully hedged through 2024 and
55% for 2025. As cheaper hedges put in place before the war
in Ukraine expire, we expect the cost of utilities to increase by
around 15% in 2024, equivalent to 1% growth in rental income.
Reductions in power and gas prices would support margin
improvement from 2025 if sustained at current levels.
Summer cleaning costs increased by £0.5 million as we
enhanced our pre-check-in cleaning in response to student
feedback, which supported the improvement in our NPS score.
Marketing costs increased by £0.6 million, reflecting ongoing
investment in our brand and commercial proposition.
Central and other costs increased by £7.5 million due to
cost increases or buildings insurance, reactive maintenance,
broadband, bad debt and council tax/HMO licences, as well as
a c.£0.8 million full year impact of our BTR pilot in Stratford.
Property operating
expenses breakdown
2023
£m
2022
£m Change
Staff costs (29.7) (28.2) 5%
Utilities (26.9) (22.8) 18%
Summer cleaning (5.7) (5.1) 9%
Marketing (7.3) (6.7) 9%
Central costs (16.8) (14.4) 16%
Other (26.6) (21.5) 24%
Property operating
expenses (113.0) (98.7) 14%
35
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Property Review
Our property portfolio saw a 1.7% increase in valuations on
a like-for-like basis during the year (Unite share: 1.2%), as
strong rental growth offset increases in property yields as
the market adjusted to a higher interest rate environment.
The see-through net initial yield of the portfolio was 5.0% at
31December 2023 (December 2022: 4.7%), which reflects like-
for-like yield expansion of 31 basis points in the year.
CASE STUDY
Meeting housing need with development
Our pipeline of developments is freeing up shared houses (HMOs) in UK cities.
In Bristol, we are building a c.600-bed development at the heart of one of the UK’s
largest regeneration projects, next to the University of Bristol’s new Temple Quarter
campus. The university will lease at least half of the rooms at Marsh Mills, which is
due to open for the 2025/26 academic year.
The construction phase of our £185 million London property, Hawthorne House,
in Stratford, has started and it is due to open for the 2026/27 academic year.
Half (51%) of the rooms in the 36-storey property will be for University of the Arts
London students. 65,000 sq ft will be occupied by a school, the London Academy
ofExcellence, for a 35-year term.
We have entered an option agreement to acquire a £95 million city centre development,
800-bed project in Glasgow, subject to planning. The aim is to deliver the property
for the 2026/27 academic year.
In Nottingham, Bromley Place a 271-bed, £34 million development will be ready for
the 2024/25 academic year, incorporating Victorian features of the existing building.
Since June 2022, we have seen a total 40–60 bps of yield
expansion across our markets. The weaker valuation
performance for LSAV reflects its higher London weighting
when compared to USAF (85% and 14% by value respectively),
where greater increases in property yields have had a more
significant negative impact on valuations.
Breakdown of like-for-like capital growth
1,2
£m
Valuation
31Dec 2023
Rental
growth
Yield
movement Other
3
Total
Wholly-owned 3,748 301 (223) (42) 36
LSAV 1,922 171 (166) (4) 1
USAF 2,992 223 (121) 2 104
Total (Gross) 8,662 695 (510) (44) 141
Total (Unite share) 5,550 66
% capital growth
Wholly-owned 8.3% (6.2)% (1.2)% 1.0%
LSAV 8.9% (8.6)% (0.2)% 0.0%
USAF 7.7% (4.2)% 0.1% 3.6%
Total (Gross) 8.2% (6.0)% (0.5)% 1.7%
Total (Unite share) 1.2%
1. Excludes leased properties and gains on disposals.
2. Excludes NTA neutral re-allocation of fire safety provision to Investment Property from Other assets/ (liabilities) on balance sheet.
3. Other includes changes to operating cost assumptions and income adjustments on reversionary assets.
FINANCIAL REVIEW continued
36
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
The proportion of the property portfolio that is income
generating is 97% by value, up from 96% at 31 December
2022. Properties under development have decreased to 3%
of our property portfolio by value (31 December 2022: 4%),
following the completion of our development at Morriss House
in Nottingham offsetting the impact of additional spend on our
committed pipeline during the year. We expect the proportion
of properties under development to grow as we commit to
additional projects.
The PBSA investment portfolio is 38% weighted to London
by value on a Unite share basis, which is expected to rise to
43% on a built-out basis following completion of our secured
development pipeline.
Development and university partnership activity
The slowing supply of competing PBSA and an 8% decline in HMO
supply over the last two years creates significant opportunities for
new development. There is widespread acknowledgement from
universities and local authorities of the need for new student
accommodation to relieve pressure on housing supply in local
communities. New supply of PBSA is down 60% on pre-pandemic
levels, reflecting viability challenges created by higher build and
funding costs. Planning timescales are also increasing as local
authorities face significant backlogs, further constraining supply.
Moreover, property valuations are now below replacement costs
in many university cities, making new development less viable.
Positively, we saw build cost inflation moderate during the year,
on the back of lower material prices, though the availability of
skilled labour remains tight.
These conditions, while challenging, play to the strengths of
our development capabilities and well-capitalised balance
sheet. As a result, the current market environment offers the
strongest opportunity for new development in recent years.
Our development pipeline is aligned to the highest quality
universities with 100% located in Russell Group cities.
Development and university partnerships will be a significant
driver of future growth in our earnings and EPRA NTA as we
build out the pipeline. Our development pipeline now includes
7,327 beds, with a total development cost of £1,271 million, of
which 2,741 beds or 53% by cost will be delivered in London.
This will contribute £77 million (Unite share) of net operating
income when complete.
The Building Safety Act is now in effect and addresses the
safety of new residential accommodation, by adding three
gateways to the design, build and occupation of new buildings.
We expect these gateways will add around six months to PBSA
development programmes, which will further slow new supply.
Our appraisals and delivery targets fully reflect the expected
impact of the Act.
We continue to see opportunities for new development
and university partnership schemes at attractive returns
and expect to add new opportunities to our pipeline during
theyear.
Completed schemes
During the year, we completed our 705-bed Morriss House
scheme in Nottingham at a cost of £60 million. Thedevelopment
is fully let for the 2023/24 academic year, achieving a yield on
cost of 8.5%. The project trialled a new design concept with
enhanced communal areas and welcome desk, which has been
well received by customers. The project’s embodied carbon
of c.800kg/
m
2
is 33% below the RIBA baseline of 1,200kg/
m
2
and ahead of annual milestones on our path towards
net zerodevelopment from 2030. The scheme also achieved
BREEAMExcellent and EPC A ratings and is fully electric, with
nogas reliance.
Committed schemes
We are committed to five development schemes, totalling
2,954 beds and £569 million in total development costs.
The £407 million of costs to complete these projects is fully
fundedfrom the Group’s cash and available credit facilities.
When complete, the projects will add a combined £37 million
to net operating income.
Our £36 million Bromley Place development in Nottingham
city centre will deliver 271 new beds for the 2024/25 academic
year. We will deliver a higher specification product, with larger
bedrooms and an enhanced design for the common areas, which
we will target at the post graduate market. We expect a significant
reduction in embodied carbon, to around 670kgCO
2
e/m
2
, through
adoption of low-carbon construction materials and retaining
elements of the existing building.
At Abbey Lane in Edinburgh, we are on-site and targeting
completion for the 2025/26 academic year. We will deliver 298
beds in cluster-flats as well as 66 two- and three-bed clusters
in a separate block. These smaller flats will be available for
postgraduate students, university staff and other young
professionals and form part of our BTR pilot.
Construction is also underway at our Hawthorne House scheme
in Stratford with the student accommodation element expected
to be delivered in time for the 2026/27 academic year. The
development will be delivered as a university partnership,
withover half of the beds let under a nomination agreement
for10 years to an existing university partner.
At Marsh Mills, construction is underway and on track to deliver
for the 2025/26 academic year. The 614-bed scheme will be 50%
nominated by the University of Bristol on a long-term agreement.
The site is adjacent to the University of Bristol’s new Temple
Quarter campus and will grow our portfolio in Bristol to
4,700beds.
FINANCIAL REVIEW continued
37
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Our Meridian Square project in Stratford is set to be heard at
planning committee in the coming weeks and we expect to
acquire the site and start construction later in the year. We
are targeting delivery of the 952-bed project for the 2027/28
academic year.
Future pipeline
There are an additional 2,373 beds in our secured pipeline for
as yet uncommitted schemes with total development costs of
£452 million. We expect to fund these schemes through a mix
of disposals and new borrowing.
Planning is progressing well for our Freestone Island project in
Bristol, which we expect to secure later in Q1 2024. Following
planning, we will exercise our option to acquire the site this
year for delivery for the 2026/27 academic year.
In September we announced our new Central Quay
development in Glasgow which aims to deliver 800 beds for
the 2026/27 academic year. We have an option to acquire the
land once planning is secured, which is targeted for the second
quarter of 2024.
We have recently secured an option to acquire a 501-bed project
in Elephant and Castle in London, which is well located for
a number of leading London universities. The scheme is
expected to be delivered in 2028, subject to planning.
New development opportunities
In addition to our uncommitted pipeline, we continue to
progress a number of further development opportunities
inLondon and prime regional markets at attractive returns.
We are seeking prospective returns on new direct-let schemes
at around 7.5–8.0% in regional markets and 6.5–7.0% in London.
We have lower hurdle rates for developments that are supported
by universities or where another developer is undertaking the
higher-risk activities of planning and construction. For new
schemes, viability has been supported by strong recent rental
growth and a stabilisation in build costs.
University partnerships pipeline
Co-investment in accommodation alongside a university has been
an objective for the business for several years. In February 2024,
we announced that Unite Students and Newcastle University
have agreed to enter into a joint venture to develop c.2,000 beds
at the University’s Castle Leazes site for delivery in 2027 and
2028. The joint venture deepens our 20-year relationship with
Newcastle University through a long-term strategic partnership.
The Castle Leazes site currently provides c.1,250 beds and was
built in 1969. Newcastle University has committed to close the
existing accommodation on the site and commence demolition
in the summer of 2024. Total development costs are expected
to be c.£250 million with Unite Students expecting to commit
c.£70 million in equity for a 51% stake. Newcastle University will
own a 49% stake in the JV and contribute to the Castle Leazes
site on a 150-year lease, with remaining funding coming from
new debt secured against the JV. To support the University’s
accommodation requirement during development, Unite
Students has provided 1,600 beds on a four-year nomination
agreement. Entry into the joint venture is subject to planning
approval. Planning submission is expected by the end of Q1,
which would support formation of the JV before the end of 2024.
Building on this proof of concept, we are in active discussions
with a range of high-quality universities for new partnerships
which we are looking to progress over the next 12–18
months. These include discussions around stock transfer
and refurbishment of existing university accommodation
as well as new development both on- and off-campus. We
expect our agreement with Newcastle University to support
further progress in other discussions. Our existing university
relationships through nomination agreements, best-in-class
operating platform and development capability, as well as
access to capital, provide us with a unique opportunity to
deepen these partnerships.
In addition, our four London developments will be delivered as
university partnerships, in line with requirements in the London
Plan for the majority of new beds to be leased to a Higher
Education provider. Our two Bristol projects will be delivered
as partnerships with the University of Bristol, building on our
existing city-wide agreement with the university and helping to
address an acute shortage of studentaccommodation in the city.
FINANCIAL REVIEW continued
Property Review continued
38
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Secured development and partnerships pipeline
Type
1
Target
delivery
Secured
beds/
units
No.
Total
completed
value
£m
Total
development
costs
£m
Capex in
period
£m
Capex
remaining
£m
Forecast
NTA
remaining
£m
Forecast
yield on
cost
%
Committed development
Bromley Place, Nottingham DL 2024 271 47 36 10 19 4 7.1%
Abbey Lane, Edinburgh DL 2025 614 122 78 7 52 21 7.3%
Marsh Mills, Bristol UPT 2025 401 74 62 4 49 6 7.1%
Hawthorne House, Stratford
3
UPT 2026 716 238 194 14 102 33 6.1%
Meridian Square, Stratford
2
UPT 2027 952 265 199 11 185 40 6.4%
Total committed 2,954 746 569 46 407 104 6.5%
Future pipeline
Freestone Island, Bristol
2
UPT 2026 500 71 69 7.2%
Central Quay, Glasgow
2
UPT 2027 800 97 97 7.2%
TP Paddington, London
2
UPT 2028 572 157 152 6.4%
Elephant & Castle, London
2
UPT 2028 501 127 127 6.5%
Total future pipeline 2,373 452 445 6.7%
Castle Leazes, Newcastle
4
JV 2027/28 2,000 250 250 7.3%
Total pipeline 7,327 1,271 1,102 6.8%
Total pipeline
(Unite share) 7,327 1,149 980 6.7%
1. Direct-let (DL), University partnership (UPT).
2. Subject to obtaining planning consent.
3. Yield on cost assumes the sale of academic space for c.£45 million.
4. Unite share 51%. Yield on cost includes management fees in NOI and deducts development management fee from costs.
Asset management
In addition to our development activity, we see significant
opportunities to create value through asset management
projects in our estate. These projects have shorter lead times
than new developments, often carried out over the summer
period, and deliver both attractive risk-adjusted returns and
significant enhancements to student experience.
In September we completed three asset management schemes
in London, Edinburgh and Birmingham. Investment across the
three projects totalled £24 million in aggregate and delivered
a 9% yield on cost. The projects delivered additional beds,
refurbished existing rooms and enhanced the environmental
performance of the properties. We have secured new nomination
agreements for over half of the refurbished beds and achieved
full occupancy for the 2023/24 academic year.
We have a significant pipeline of attractive asset management
opportunities and will accelerate investment to c.£50 million
(Unite share: £40 million) during 2024, improving the experience
of around 5,000 students for the start of the 2024/25 academic
year. We expect to further increase the level of asset management
activity in 2025.
FINANCIAL REVIEW continued
Disposals
We continue to manage the quality of the portfolio and our
balance sheet leverage by recycling capital through disposals.
Weare holding £197 million of assets (Unite share: £79 million)
for sale on our balance sheet and expect to complete in the
second quarter. The disposals were priced at a blended 6.4% yield
and in line with book value after deductions for fire safetyworks.
We will continue to recycle capital from disposals to maintain
LTV around our c.30% target and net debt:EBITDA in the 6-7x
range. The level of planned disposals will adjust to reflect capital
requirements for our development and asset management
activity as well as market pricing. We will target future disposals
of around £100–150 million p.a. (Unite share).
Acquisitions
We continue to review potential acquisition and forward
funding opportunities alongside our other uses of capital.
Weare tracking opportunities to acquire older, well-located
assets with asset management potential at relatively attractive
yields. We are focused on opportunities in our strongest
markets aligned to high-quality universities, where we see the
ability to deliver attractive rental growth over the long term.
39
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Build-to-rent
During the year, we have transferred operational management
of our pilot build-to-rent (BTR) asset in Stratford, London onto
our operating platform. There are clear opportunities to leverage
our existing operating platform to deliver cost efficiencies and
use our BTR product to retain our student customers seeking a
more independent living experience. Rental growth continues to
outperform our assumptions from the time of acquisition, with
new lettings during 2023 15% above previous rentallevels. We
are planning to commence a refurbishment of the building in
2024 to improve the customer experience and support higher
rental levels.
We do not expect to increase our capital commitment to BTR in
the short term. We are continuing to explore opportunities to
increase the scale of our BTR operations through co-investment
with institutional investors, where Unite Students would act as
asset manager. Subject to identifying suitable opportunities, this
structure would enhance returns for the Group while limiting
capital requirements as we develop our understanding of the
opportunity in the BTR sector.
Fire safety
Fire safety is a critical part of our health and safety strategy,
and we have a track record of leading the sector on fire safety
standards through our proactive approach. The Building
Safety Act has introduced new requirements for provision of
safety information, management of data and design gateways
for new developments, and has been fully embedded in the
day-to-day workings of the business. We will continue to make
future investments in fire safety, as required, to comply with
government regulations.
FINANCIAL REVIEW continued
During 2023 we completed fire safety improvements on
16 buildings across our estate. We prioritise remediation
according to our risk assessments and have made additional
provisions totalling £86.2 million (Unite share: £42.5 million)
for works at a further 10 properties in our year-end balance
sheet. We have transferred the 2023 addition to provisions
in respect of committed spend on fire safety and façade
works taking place in AY 2024/25 to property valuations as
a deduction to fair value totalling £80.6 million (Unite share:
£39.8 million. This change is NTA neutral with the reduction in
property valuations offset by a reduction in other liabilities. We
spent £78.5 million (Unite share: £39.3 million) on fire safety
capex during the year. At the year-end, the total outstanding
provision for fire safety works was £42.3 million (Unite share:
£22.3 million), the costs for which will be incurred over the
nexttwo years.
During the year we reached agreement with contractors for
recovery of £13.6 million (Unite share: £5.7 million) in relation
to three buildings. In total we have now agreed settlements
totalling £39.2 million (Unite share: £27.3 million). We ultimately
expect to recover 50–75% of total cladding remediation costs
through claims from contractors, although the settlement and
recognition of these claims is likely to lag costs incurred to
remediate buildings. We expect the remediation programme to
complete in 2028 with net spend higher in the earlier years of
the programme and reducing substantially from 2026.
Property Review continued
40
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
The Group uses Alternative Performance Measures (APMs),
which are not defined or specified under IFRS. These APMs,
which are not considered to be a substitute for IFRS measures,
provide additional helpful information and include, among
others, measures based on the European Public Real Estate
Association (EPRA) best practice recommendations. The metrics
are used internally to measure and manage the business.
2023
£m
2022
£m
Rental income 369.5 339.7
Property operating expenses (113.0) (98.7)
Net operating income (NOI) 256.5 241.0
NOI margin 69.4% 70.9%
Management fees 16.9 17.4
Overheads (33.1) (33.8)
Finance costs (55.1) (63.0)
Development and other costs (9.1) (4.3)
EPRA earnings 176.1 157.3
SaaS implementation costs 8.2 4.6
Abortive acquisition costs 1.5
Adjusted earnings 184.3 163.4
Adjusted EPS 44.3p 40.9p
EPRA EPS 42.2p 39.4p
EBIT margin 68.0% 67.9%
A reconciliation of profit after tax to EPRA earnings and adjusted earnings is set out in note 2.2b to the financial statements.
IFRS profit before tax decreased to £102.5 million in the year (2022: £350.5 million), reflecting the increase in adjusted earnings of
£20.9 million, a revaluation loss of £61.2 million (2022: £119.2 million profit) and a £17.2 million revaluation loss for interest rate
swaps (2022: £70.7 million profit).
2023
£m
2022
£m
Adjusted earnings 184.3 163.4
SaaS implementation costs (8.2) (4.6)
Abortive transaction costs (1.5)
EPRA earnings 176.1 157.3
Valuation (losses)/gains and profit/(loss) on disposal (61.2) 119. 2
Changes in valuation of interest rate swaps and debt break costs (17.2) 70.7
Non-controlling interest and other items 4.8 3.3
IFRS profit before tax 102.5 350.5
Adjusted earnings per share 44.3p 40.9p
IFRS basic earnings per share 24.6p 87.6p
A reconciliation of profit before tax to adjusted earnings and EPRA earnings is expanded in section 7 of the financial statements.
FINANCIAL REVIEW continued
Earnings and adjusted earnings
We delivered a strong operating performance in 2023,
withadjusted earnings increasing by 13% to £184.3 million
(2022: £163.4 million), reflecting an increase in rental income
and costs, with a reduction in finance costs, when compared
to the prior year. Adjusted EPS increased by 8% to 44.3p
(2022:40.9p), reflecting the increased share count following
the capital raise in July.
Financial Performance
41
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Marsh Mills, Bristol
FINANCIAL REVIEW continued
Financial Performance continued
Sales, rental growth and profitability
Rental income increased by £29.8 million to £369.5 million, up 9%,
as a result of higher occupancy, rental growth and the full-year
impact of increased USAF ownership. Like-for-like rental income,
excluding the impact of major refurbishments, acquisitions,
disposals and development completions, increased by 7% during
the year.
Operating expenses increased by 18% in like-for-like properties,
primarily driven by increased utility and staff costs due to the
return to full occupancy throughout the year and increases in bad
debt provisions, property maintenance and costs associated with
commercial units within our buildings. The annualised impact of
our increased USAF share contributed around 2% to the increase
in operating expenses.
This resulted in a 6% increase in net operating income to £256.5 million (2022: £241.0m).
FY 2023 FY 2022 YoY change
£m
Wholly-
owned
Share of
Fund/JV Total
Wholly-
owned
Share of
Fund/JV Total £m %
Rental income
Like-for-like properties 224.7 94.4 319.1 209.0 88.8 297.8 21.3 7%
Non-like-for-like properties 34.1 16.3 50.4 32.8 9.1 41.9 8.5
Total rental income 258.8 110.7 369.5 241.8 97.9 339.7 29.8 9%
Property operating expenses
Like-for-like properties (71.7) (27.8) (99.5) (62.0) (22.2) (84.2) (15.3) 18%
Non-like-for-like properties (8.2) (5.3) (13.5) (10.0) (4.5) (14.5) 1.0
Total property operating expenses (79.9) (33.1) (113.0) (72.0) (26.7) (98.7) (14.3) 14%
Net operating income
Like-for-like properties 152.9 66.6 219.5 146.9 66.7 213.6 5.9 3%
Non-like-for-like properties 26.1 10.9 37.0 22.8 4.6 27.4 9.6
Total net operating income 179.0 77.5 256.5 169.7 71.3 241.0 15.5 6%
42
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Overheads decreased by £0.8 million, reflecting underlying
cost control. Recurring management fee income from joint
ventures decreased to £16.9 million (2022: £17.4 million),
driven by the annualised impact of our increased ownership
share of USAF, partially offset by increased property valuations
and NOI in USAF. Our EBIT margin increased slightly to 68.0%
(2022: 67.9%), reflecting the offsetting impact of increases in
rental income and operating costs.
We are targeting around a 50–100bps improvement in our
EBIT margin in 2024, driven by rental growth, the impact of
development and asset management, procurement savings
and the enhanced use of technology as we seek to offset
increases in utility and staff costs.
Finance costs reduced to £55.1 million in 2023 (2022: £63.0
million), reflecting lower borrowings following our equity raise
and a reduction in our average cost of debt to 3.2% (2022:
3.4%) following the repayment of more expensive debt. £8.4
million of interest costs were capitalised during the year (2022:
£6.3 million) in relation to our development pipeline.
Development (pre-contract) and other costs increased to
£9.2million (2022: £4.3 million), primarily reflecting accelerated
recognition of share-based payments for Richard Smith.
EPRA NTA growth
EPRA net tangible assets (NTA) per share, our key measure
of NAV, decreased by 1% to 920p at 31 December 2023 (31
December 2022: 927p). EPRA net tangible assets were £4,015
million at 31 December 2023, a £298 million increase from
£3,717 million in the prior year.
FINANCIAL REVIEW continued
The main drivers of the £298 million increase in EPRA NTA
and 7 pence decrease in EPRA NTA per share were our capital
raise, and retained profits, which more than offset the impact
of negative valuation movements on our investment and
development portfolio, losses on disposals and a further
provision for fire safety capex.
IFRS net assets increased by 7% in the year to £4,067 million
(31 December 2022: £3,788 million), principally driven by net
proceeds from the capital raise and retained profits. On a per
share basis, IFRS NAV decreased by 1% to 931p.
£m
Diluted
pence per
share
EPRA NTA as at 31 December 2022 3,717 927
Investment portfolio 326 75
Yield movement (336) (77)
Net fire safety capex (38) (9)
Development deficit (15) (3)
Disposals and associated
transactioncosts 8 2
Capital raise 295 (4)
Retained profits/other 58 9
EPRA NTA as at 31 December 2023 4,015 920
Property portfolio
The valuation of our property portfolio at 31 December 2023,
including our share of property assets held in USAF and LSAV,
was £5,770 million (31 December 2022: £5,690 million). The
£85 million increase in portfolio value reflects the valuation
movements outlined above, capital expenditure and interest
capitalised on developments.
43
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
FINANCIAL REVIEW continued
Financial Performance continued
Total accounting return
Dividends paid of 33.5p (2022: 26.6p) were the key component
of the 2.9% total accounting return delivered in the year (2022:
8.1%), offsetting the small decrease in EPRA NTA. Our adjusted
EPS yield (measured against opening EPRA NTA) increased
to 4.8% in the year (2022: 4.6%), reflecting the growth in
recurringearnings.
We expect to deliver a total accounting return of 10-12% in
2024 before the impact of any property yield movements.
This reflects our expectation of growing recurring earnings,
continuing rental growth and delivery of our development
andasset management pipeline.
Cash flow and net debt
The business generated £176 million of net cash in 2023
(2022:£134 million) and net debt reduced to £1,571 million
(2022: £1,734 million). The key components of the movement
in net debt were:
Capital raise gross proceeds of £300 million.
Operational cash flow of £178 million on a see-through basis.
Total capital expenditure of £152 million.
Dividends paid of £117 million.
A £46 million net outflow for other items.
In 2024, we expect see-through net debt to increase as
planned capital expenditure on investment and development
activity will exceed anticipated property disposals.
Debt financing and liquidity
During the year, borrowing rates for new debt remained
high, as markets adjusted to higher inflation and tightening
of monetary policy by central banks. Encouragingly, funding
conditions have improved over recent months as markets
anticipate the end of the tightening cycle for monetary policy.
Lenders remain supportive of the student accommodation
sector and the Group, providing access to new funding
whenrequired.
We are well protected from significant increases in borrowing
costs through our well-laddered debt maturity profile and
forward hedging of interest rates, but still expect to see our
borrowing costs increase over time as we refinance in-place
debt at higher prevailing market costs.
Summary balance sheet
31 December 2023 31 December 2022
£m
Wholly-
owned
£m
Share of
Fund/JV
£m
Total
£m
Wholly-
owned
£m
Share of
fund/JV
£m
Total
£m
Rental properties
1
3,728 1,782 5,510 3,624 1,773 5,397
Rental properties (leased) 85 85 90 90
Properties under development 175 175 203 203
Total property 3,988 1,782 5,770 3,917 1,773 5,690
Net debt (1,030) (541) (1,571) (1,210) (524) (1,734)
Lease liability (84) (84) (90) (90)
Other assets/(liabilities) (49) (51) (100) (95) (56) (151)
EPRA net tangible assets 2,825 1,190 4,015 2,522 1,193 3,715
IFRS NAV 2848 1219 4,067 2,561 1,227 3,788
LTV 28% 31%
1. Rental properties (owned) includes assets classified as held for sale in the IFRS balance sheet.
44
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
We are focused on maintaining a strong and flexible balance
sheet and will continue to use leverage to support our growth
and enhance risk-adjusted returns. In response to a higher
interest rate environment, we have reduced our medium-term
target LTV to c.30% on a built-out basis (previously 30–35%).
We remain committed to active portfolio management through
capital recycling and will continue to target disposals of around
£100–150 million p.a. (Unite share).
Key debt statistics
(Unite share basis)
31 December
2023
31 December
2022
See-through net debt £1,571m £1,734m
LTV 28% 31%
Net debt:EBITDA ratio 6.1 7.3
Interest cover ratio 4.6 3.7
Average debt maturity 3.8 years 4.1 years
Average cost of debt 3.2% 3.4%
Proportion of investment debt
atfixed rate 100% 97%
LTV reduced to 28% at 31 December 2023 (31 December
2022: 31%), primarily driven by our £300 million capital raise
offsetting capital expenditure on our development pipeline
and investment portfolio.
We continue to monitor our interest cover and net debt
to EBITDA ratios. In 2023, interest cover improved to 4.6x
(2022:3.7x) and net debt to EBITDA reduced to 6.1x (2022:
7.3x), reflecting both the improved operational performance
of the business and the impact of lower leverage. We aim to
maintain an ICR ratio of 3.5–4.0x and a net debt to EBITDA
ratio to 6–7x.
Following our capital raise, the Unite Group credit rating
was upgraded to Baa1 (from Baa2) by Moody’s and our BBB
rating was moved to a positive outlook by Standard & Poor’s,
reflecting our lower leverage targets, robust capital position,
cash flows and track record.
FINANCIAL REVIEW continued
Funding activity
As at 31 December 2023, the wholly-owned Group had £579
million of cash and debt headroom (31 December 2022: £397
million), comprising of £29 million of drawn cash balances
and £550 million of undrawn debt (2022: £29 million and £368
million respectively).
During the year, the Group extended the maturity on £450
million of its sustainability-linked revolving credit facility to
March 2027, with the remaining £150 million due to mature in
March 2026. In February 2024 we increased our revolving debt
capacity by £150 million to a total of £750 million and added
a further £150 million term loan. Both new facilities are on
similar terms to our existing RCF and mature in 2027. The new
loans increase investment capacity and provide flexibility to
capitalise on growth opportunities.
We are progressing several funding options to refinance the
£300 million Liberty Living bond, which matures in November
2024, including via debt capital markets and bank lending.
The refinancing is fully pre-hedged and subject to market
conditions we expect an all-in interest rate of around 4.5% on
the replacement facility.
In January 2023, LSAV repaid the £100 million term loan from
Legal & General as it matured using available cash in LSAV.
During the year, USAF entered into a new £400 million loan for
a term of seven years with Legal & General, using the proceeds
to pay down the bond maturing in June 2023. USAF has also
agreed terms for a new £150 million secured loan to refinance
its existing £150 million revolving credit facility.
Interest rate hedging arrangements and cost of debt
Our average cost of debt decreased to 3.2% (31 December
2022: 3.4%) following repayment of more expensive revolving
debt after the capital raise. At the year end, 100% of the
Group’s debt was subject to fixed or capped interest rates
(31December 2022: 97%), providing protection against future
changes in interest rates. Based on our hedging position,
forecast drawings, planned refinancing and market interest
rates, we currently expect an average cost of debt of 3.6% for
FY2024 and 4.3% for FY2025. Reflecting an increased level of
development activity, we expect a corresponding increase
in capitalised interest in 2024 to around £15 million (2023:
£8million).
Our average debt maturity is 3.8 years (31 December 2022:
4.1years) and we will continue to proactively manage our debt
maturity profile and diversify our lending base. In addition, the
Group has £300 million of forward starting interest rate swaps
at rates meaningfully below prevailing market levels with a
weighted average maturity of 7.7 years.
45
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Financial Performance continued
Dividend
We are proposing a final dividend payment of 23.6p per share
(2022: 21.7p), making 35.4p for the full year (2022: 32.7p) and
representing a 8% increase compared to 2022. This represents
a payout ratio of 80% of adjusted EPS. The final dividend will
be fully paid as a Property Income Distribution (PID) of 23.6p,
which we expect to fully satisfy our PID requirement for the
2023 financial year.
Subject to approval at Unite Student’s Annual General Meeting
on 16 May 2024, the dividend will be paid in either cash or
new ordinary shares (a ‘scrip dividend alternative’) on 24 May
2024 to shareholders on the register at close of business on
19April2024. The last date for receipt of scrip elections will
be2 May 2024.
During 2023, scrip elections were received for 25.0% and 1.2%
of shares in issue for the 2022 final dividend and 2023 interim
dividend respectively. Further details of the scrip scheme, the
terms and conditions and the process for election to the scrip
scheme are available on the Company’s website.
FINANCIAL REVIEW continued
The Directors intend to propose an ‘Enhanced Scrip Dividend
alternative’ at the 2024 Annual General Meeting. In offering
the enhanced scrip dividend, the Directors’ aim to encourage
greater participation in the scrip scheme, and to retain additional
capital in the business for investment in asset management
and new development. The enhanced scheme would allow
the scrip reference price to be set at a discount of up to 5% to
the prevailing share price. If the shares are trading below 31
December 2023 NTA of 920p, the scrip will not be enhanced
(i.e. 0% discount). The Company will engage with shareholders
to gather feedback on the proposal and further detail will be
provided in the notice of AGM.
We plan to distribute 80% of adjusted EPS as dividends for the
2024 financial year.
Tax and REIT status
The Group holds REIT status and is exempt from tax on its
property business. During the year, we recognised a corporation
tax charge of £1.2 million (2022: £0.7 million charge).
46
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
Morriss House, Nottingham
Funds and joint ventures
The table below summarises the key financials at 31 December 2023 for our co-investment vehicles.
Property
assets
£m
Net debt
£m
Other
liabilities
£m
Net assets
£m
Unite share
of NTA
£m
Total
return Maturity
Unite
share
USAF 2,941 (800) (80) 2,061 580 5.1% Infinite 28%
LSAV 1,910 (631) (60) 1,219 610 (1.9)% 2032 50%
FINANCIAL REVIEW continued
Property valuations increased by 3.6% for USAF and were
unchanged in LSAV over the year, on a like-for-like basis,
reflecting positive rental growth offset by the negative
impactof rising propertyyields.
During the year, a £20 million (Unite share: £10 million)
payment from LSAV to the wholly-owned Group crystallised
due to the increase in value of a London asset sold to LSAV
in2021 which achieved a performance target agreed at the
time of sale.
USAF is a high-quality, large-scale portfolio of 28,000 beds in
leading university cities. The fund has positive future prospects
through rental growth and investment opportunities in asset
management initiatives in its existing portfolio. USAF, in line
with other non-listed property funds, has received redemption
requests which will be met from planned and future disposals
to provide liquidity to its unit holders.
Fees
During the year, the Group recognised net fees of £16.9
million from its fund and asset management activities
(2022:£17.4million). The decrease in fee income is due to
thefull-year impact of the Group’s increased USAF ownership,
following the purchase of additional units in mid-2022.
2023
£m
2022
£m
USAF asset management fee 12.1 12.6
LSAV asset and property
management fee 4.8 4.8
Total fees 16.9 17.4
47
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
SUSTAINABILITY
This chapter sets out an
overview of sustainability
andour mandatory reporting.
A more detailed account
of our 2023 sustainability
achievements are
captured in our separate
Sustainability Report.
BEING A
RESPONSIBLE
AND RESILIENT
BUSINESS
Operating sustainably is crucial to the long-term success
of our business, which is why being a responsible and
resilient business is one of our three strategic objectives.
Tohelp us fulfil our ambition to lead the living sector on
sustainability, our Sustainability Strategy and targets
focus on creating positive environmental andsocial
impact where it matters most.
Employees
Our ambition: An equitable,
inclusive and safe workplace
that provides rewarding and
fulfillingcareers.
Employee engagement
increased from 65 in
2022 to
Number of training events
in 2023
70 35,924
Local
communities
Our ambition: Create real
social value that meets local
communityneeds.
Community impact projects
received Silver and Gold
Positive Impact Awards
Proportion of employees
who volunteered in 2023
29 22%
Find out more about The Academy
which provides employees with
a wide range of opportunities
tobuildskills.
Find out more about how we are
making a difference through
the Streets of Growth project
atHayloftPoint.
48
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
SUSTAINABILITY continued
We aspire to lead the living
sector on sustainability and have
set ambitious targets for our
environmental and social impact,
including reaching net zero carbon
by 2030. Weare committed to
having apositive impact on
peopleand the communities
inwhich we operate.
Dame Shirley Pearce
Chair of the Sustainability Committee
Students and
young people
Our ambition: A leader on student
inclusion, wellbeing and success.
Number of new Unite
Foundation scholars
Customer NPS score
improved from +38
in2022 to
106 +42
The environment
Our ambition: Minimise our
impact on the environment and
create sustainable buildings.
Investment in energy
efficiency across
existingestate
Proportion of estate
(byfloor area) with
A–Crated EPC
£8.2m 99%
Find out more about a Commission set
up to progress further our ground-
breaking research LivingBlack
atUniversity.
Find out more about how our
strategyworks in action
by reading about our new
Nottinghamdevelopment.
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SUSTAINABILITY continued
Sustainability at UniteStudents
Being a responsible and resilient business is one of our three
strategic objectives. Our ambition to lead the living sector on
sustainability reflects the importance we place on this.
To keep us focused on the most important areas, we
undertook our first sustainability materiality assessment
in2020. This identified the themes and issues that are
most important to our stakeholders including students,
universities,employees, investors, local and national
government, and our supply chain.
Since then, we’ve continually re-evaluated these priorities
through ongoing dialogue and engagement, to ensure they
remain relevant. This enables us to continue to focus on the
most important sustainability topics. The graphic below shows
these themes, which form the foundation of Sustainability
Framework that aims to create a positive impact across four
key areas, shown on the page opposite.
Our most significant sustainability related themes and issues:
Providing
opportunities
for people
to grow and
develop
Diversity,
equity,
inclusion and
belonging
Supporting
the wellbeing
of our
employees
and students
Health
andsafety
Creating
sustainable
buildings
Playing an
active role in
communities
Transparency
and disclosure
Governance
andintegrity
Climate
change and
transitioning
to net zero
carbon
Reducing
resource
consumption
CASE STUDY
Thought leaders for the HE sector
Our Living Black at University Commission Report,
launched in 2023, details how to put findings on Black
students’ living experience into practice. The original
research report, published in 2022, included 10
recommendations to make PBSA a more welcoming
place for black students. The commission – spanning
Higher Education membership organisations, regulators,
relevant charities and universities working on relevant
projects – then met every two months during 2023 to
discuss these and commit to actions. The report groups
the recommendations into four themed chapters: arrival
and integration; mental health; staffing; and complaints
anddata.
Our report on neurodiversity and student experience
published in 2023 showed more than 14 per cent of the
then current university applicants reported having ADHD
and/or being on the autism spectrum. The report, An
asset not a problem: Meeting the needs of neurodivergent
students, is based on a survey of more than 2,000
university applicants across the UK, as well as a focus
group with neurodivergent students currently studying
at the University of Bristol. It was created to help ensure
neurodiverse students are getting the support they need
while at university.
We also partnered with UCAS, alongside Knight Frank, on a
national debate around UCAS’ projection that there could
be up to a million Higher Education applicants in a single
year by 2030. UCAS invited 50 key thinkers from across
theUK to give their view on tackling the challenges.
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Employees
Our ambition: An equitable,
inclusive and safe workplace
that provides rewarding and
fulfillingcareers.
People strategy and HR policies making us a great
place to work.
Support employees to fulfil their potential via The
Academy, Grow Beyond leadership development,
and Early Careers programmes.
Empower employee voice through our Culture
Mattersforum.
Creating an equitable and inclusive environment
withour DEIB&W strategy.
Students and
young people
Our ambition: A leader on student
inclusion, wellbeing and success.
Shape policy and thinking on inclusion and
participation in Higher Education through research,
engagement and through leadership.
Support students in the transition into Higher
Education and independent living.
Support student customers’ wellbeing and mental health
while living with us via our Support to Stay programme.
Maintaining our commitment to care leavers through
the UniteFoundation.
Our approach: Doing what’s right
Our goal is to lead on sustainability and raise standards in the living sector. Our governance and processes ensure
thatworking responsibly and sustainably isn’t optional – that we always operate with integrity and transparency.
The United Nations Sustainable Development Goals (UN SDGs) (see more details at https://sdgs.un.org/goals) set out the most
important sustainability topics globally, and provide a framework to help focus attention and action where it is most needed.
Oursustainability framework is specifically aligned with nine of the 17 UN SDGs where we are best-positioned to support the
goals and underlying targets, as indicated by the SDG icons on the graphic above.
Local
communities
Our ambition: Create real
social value that meets local
communityneeds.
Meeting local community needs via long-term
community partnerships in our buildings.
Giving back to local community through
Positive Impact Community Projects and
Volunteeringprogrammes.
Supporting important charities nationally,
locallyand through our charity match scheme.
The environment
Our ambition: Minimise our impact
on the environment and create
sustainable buildings.
Playing our part to help tackle climate change via
ournet zero carbon targets and pathway.
Targeting ambitious reductions in energy and
wateruse.
Reducing resource consumption and supply
chainimpacts.
Designing sustainable buildings that support
buildingusers’ wellbeing.
CREATING A POSITIVE IMPACT
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SUSTAINABILITY continued
Sustainability targets andkey progress in2023
The table below summarises our key targets and commitments across these four areas.
Our ambition:
Making a positive impact
for employees
Making a positive impact
for local communities
Making a positive impact
forstudents and young people
Making a positive impact
forthe environment
Our
targets and
commitments
40% women in senior
leadership by end
of2025.
65% of leadership and
management population
hired internally.
Employee engagement
score of 75 or higher.
Zero reportable
accidents and incidents.
Maintain Real Living
Wage accreditation.
10% ethnic minority
representation in
management and
senior leadership by
end of 2025.
Operations: reduce
voluntary turnover to
35% by end of 2024.
Support (incl. Property):
reduce voluntary
turnover to 15% by
endof 2024.
1% of annual adjusted
profits on social
investment.
All teams achieve
Bronze award or
higher in our Positive
Impact sustainability
engagement programme
(bonus metric for
allemployees).
15% of all employees
participate in
volunteering in 2023.
Maintain support to
Unite Foundation.
100% of properties
to have Resident
Ambassadors.
Customer Satisfaction
(NPS) of +40 in 2023.
Higher Education Trust
score (NPS) of +13 in
2023.
Overarching target to be net
zero carbon by 2030 as set
out in our Net Zero Carbon
Pathway document.
56% cut in absolute Scope
1+2 market-based emissions
by 2030 vs. 2019 base year
(tonnes CO
2
e) in line with
SBTi validated carbontarget.
28% reduction in operational
energy intensity by 2030 vs.
2019 base year (kWh/m²) in
line withCRREM.
100% renewable electricity
by 2030 in line with our
RE100commitment.
35kWh/m² of operational
energy consumption for
new developments by
2023 in line with RIBA 2030
climatechallenge.
Net zero carbon by 2030:
625kgCO
2
e/m² of embodied
carbon for new developments
by 2030 in line with RIBA 2030
climate challenge.
All new builds target EPC A
and BREEAM Excellent rating.
Key progress
in 2023
Maintained our
commitment to the
RealLiving Wage.
Improved employee
engagement from 65 in
2022 to 70 in 2023.
73% of leadership and
management population
hired internally.
28% of women in
seniorleadership.
Over 35,900 training
events delivered
through The
Academyin 2023.
Operations: Voluntary
turnover of 32% in 2023.
Support (incl. Property):
Voluntary turnover of
15% in 2023.
33 new community
impact projects started
in 2023 by our teams
across the country
aiming to achieve
lasting local positive
socialimpact.
22% of all employees
participating
involunteering
during2023.
20 Silver and 9 Gold
Positive Impact Awards.
Following the Living Black
at University Conference,
the Commission
published a milestone
report including key
recommendations for
accommodation providers.
Published guidance
to wider HE sector on
meeting the needs of
neurodivergent students,
co-created with students
at theUniversity of Bristol.
106 accommodation
scholarships awarded
through the Unite
Foundation.
Customer Satisfaction
(NPS) of +42 in 2023.
Higher Education Trust
score (NPS) of +32
in2023.
Invested £8.2m in energy
efficiency across existing
estate, potentially delivering
a 1.5% reduction in annual
energy use vs. 2019.
Launched new Sustainable
Construction Framework,
another key step on our
route to Net Zero Carbon.
Launched new Supplier Code
of Conduct and sustainable
procurement policy.
99.7% of floor area EPC A–C
rated by end of 2023, up
from 80.5% in 2022.
Achieved design stage
new build operational
energy consumption of
70kWh/m² and embodied
carbon of 801kgCO
2
em² at
MorrissHouse.
More details including KPIs, achievements
and progress made in 2023 can be found in
our Sustainability Report.
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SUSTAINABILITY continued
Non-financial and sustainability
informationstatement
The table below summarises how we comply with non-financial and sustainability performance reporting requirements in line
with The Companies Act 2006, and Climate-related Financial Disclosure Regulations 2022. Relevant policies and statements are
available online at www.unitegroup.com.
Description of the
business model:
Details of who we are, how we operate and the value we create can be found on page 2 onwards.
Employee Our Diversity, Equity, Inclusion, Belonging and Wellbeing strategy is focused on providing opportunities for
all, see page 111 and at https://www.unitegroup.com/sustainability/diversity-and-inclusion.
The Academy provides learning opportunities to enhance knowledge, skills and development, see
https://www.unitegroup.com/sustainability.
Our employee engagement forum, Culture Matters, puts the employee voice front and centre, so employees
have a direct channel to senior management, allowing them to help shape business strategy and policy, see
page 94.
Our Whistleblowing Policy enables employees to raise a concern in confidence, see page 95 or
https://www.unitegroup.com/wp-content/uploads/2021/04/Whistleblowing-Policy-1.pdf.
Gender diversity and pay gaps across Unite Group. Our full Gender Pay Gap Report for FY22/23 can be found
on our website https://gender-pay-gap.service.gov.uk/Employer/KDcxuKgHp63. Further details on gender
split during 2023 are also available on page 54.
Our Board Diversity Policy seeks to enhance the overall diversity of the Board and ensures an appropriate
and diverse mix of skills, experience and knowledge, see page 111.
Anti-corruption
andbribery
Our Anti-Bribery Policy confirms our zero-tolerance approach to bribery and corruption and outlines
employee responsibilities. Read our policy at https://www.unitegroup.com/sustainability/policies-
documentation?report=5. Our Gifts and Hospitality Policy sets out the rules for accepting gifts and
hospitality. Our Code of Ethics ensures employees adhere to the highest business and personal ethics.
Our policies All of our public policies are available on our website, https://www.unitegroup.com/sustainability/
policies-documentation.
Modern slavery and
human rights
We operate a zero-tolerance approach to slavery to ensure it does not occur anywhere within our business
or supply chain. We carry out due diligence on all third parties we work with. Read our Modern Slavery
statement and Code of Ethics, see https://www.unitegroup.com/wp-content/uploads/2022/07/Unite-
Group-plc-Modern-Slavery-Statement-FY-ending-2022.pdf, and our Supplier Code of Conduct https://
www.unitegroup.com/our-suppliers sets out the highest standards of business and personal ethics.
Policy, due diligence
and outcomes
We carry out regular reviews of our policies to ensure we continue to identify key risks and management and
carry out appropriate due diligence. The policies included in this non-financial information statement contain
further details (as cross-referenced herein) of the policy and policy outcomes, including the following:
Risk management detailing our risk management framework and risk review process from page 67.
Principal risks and uncertainties considering both internal and external risks, the potential impact and details
of risk mitigation in place, on page 76.
Viability statement considering the viability of Unite Group for the next three-year period on page 71.
Audit & Risk Committee Report on page 114.
Sustainability Committee Report on page 120.
Unite Group Health & Safety Committee Report page 123 and Health and Safety Policy (and https://www.
unitegroup.com/sustainability/policies-documentation) which details Unite Group’s commitment to the
health and safety of our employees, students and visitors to our sites.
Non-financial KPIs relevant to the Company’s business on page 31 and https://www.unitegroup.com/sustainability.
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Social matters Our Resident Ambassador programme provides peer-to-peer support for students, see https://www.
unitegroup.com/sustainability.
Our Positive Impact programme encourages our people and teams to work with local stakeholders on
community impact initiatives, see https://www.unitegroup.com/sustainability.
Market overview focusing on demographic trends, see from page 26.
The Unite Group is the principal supporter of the Unite Foundation, the only charity that provides a home at
university for estranged and care-experienced students – see https://thisisusatuni.org/ and https://www.
unitegroup.com/sustainability.
Support to Stay, our innovative student support framework designed to align with universities’ processes
forsupporting student mental health and widerwellbeing, see https://www.unitegroup.com/sustainability.
Health & Safety Our Health and Safety strategy keeping people safe and secure across our operational buildings and new
development sites, see page 123.
Environmental
matters
Our Sustainability Strategy sets out clear objectives and our progress in respect of environmental, social and
governance matters, see pages 50 and see https://www.unitegroup.com/sustainability.
TCFD and CFD page 58.
Our Net Zero Carbon Pathway sets out our pledge to be net zero carbon by 2030, see https://www.
unitegroup.com/sustainability/our-net-zero-pathway.
Energy and carbon. Full details in line with the Streamlined Energy & Carbon Reporting requirements,
seepage56.
Wider environmental impact details of other environmental performance metrics, targets and activity, see
https://www.unitegroup.com/sustainability.
Our Sustainable Construction Framework sets out our approach to the sustainable design and construction
of new purpose-built student accommodation, refurbishment and retrofits. It will also inform how we procure
new net zero developments, see https://www.unitegroup.com/wp-content/uploads/2023/12/Unite-
Students-Sustainable-Construction-Framework.pdf.
EPRA sBPR Further environmental, social and governance performance is also reported in line with the EPRA sBPR
guidelines in our stand-alone Sustainability Report, see https://www.unitegroup.com/sustainability.
Non-financial and sustainability
informationstatement continued
SUSTAINABILITY continued
Gender split
For more information on gender split, see our separate Sustainability Report – https://www.unitegroup.com/sustainability.
Male Male % Female Female % Total
Board 6 60% 4 40% 10
Management 23 72% 9 28% 32
All other employees 1,052 54.3% 887 45.7% 1,939
Total 1,075 54.5% 896 45.5% 1,971
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SUSTAINABILITY continued
Sustainability reporting
We have aligned with the European Public Real Estate Association
Sustainability Best Practice Reporting Guidelines (EPRA sBPR),
earning a Silver EPRA sBPR award in 2023 for our 2022 reporting.
A summary of our EPRA sBPR aligned reporting is included in our
stand-alone Sustainability Report. Our reporting on energy and
carbon also meets the UK Government Streamlined Energy and
Carbon Reporting (SECR) requirements (see page 56), and follows
the Green House Gas Protocol Corporate Reporting Standard.
A full disclosure in line with TCFD and CFD is also included, see
page58.
Energy consumption and Scope 1+2 greenhouse gas
emissions have been externally verified by SGS in line with
the requirements of ISO 14064-3:2019. Environmental
performance data is also undergoing external assurance by SGS
to a reasonable level of assurance in line with requirements
of ISAE 3000 (Revised): Assurance Engagements Other than
Audits or Reviews of Historical Financial Information, although
this was still underway at time of publication. Further details
of energyand GHG emissions are included in our SECR
reportingand inour stand-alone Sustainability Report and the
relevant opinion statements can be viewed on our website
https://www.unitegroup.com/sustainability.
In addition, we also proactively disclose wider sustainability
data to leading ESG programmes including the Global Real
Estate Sustainability Benchmark (GRESB) and CDP. 2023 saw
our GRESB score improve to 86 with a four-star rating, and our
CDP rating improve from B to A-, reflecting progress made in
our management of climate-related risks and issues. Our Full
GRESB and CDP scorecards can be accessed on our website
https://www.unitegroup.com/sustainability. We also achieved
various ESG ratings and listings as shown below.
We are tracking emerging reporting requirements including
the International Financial Reporting Standards Board
Sustainability Disclosure Standards 1+2 (IFRS S1 and S2), the
UK Government’s Sustainability Disclosure Requirements and
the Transition Planning Taskforce guidelines to ensure we are
able to meet their requirements in good order. Unite Group is
outside of the scope of the EU CSRD reporting requirements.
More details can be found in our
Sustainability Report.
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SUSTAINABILITY continued
Streamlined energy and carbon reporting
This section summarises energy consumption and greenhouse gas (GHG) emissions in line with the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013 and the Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018, and in accordance with the Streamlined Energy and Carbon
Reporting (SECR). Reporting periods are January to December. We also disclose data to CDP and GRESB (Global Real
Estate Sustainability Benchmark). More comprehensive data can be found in our stand-alone Sustainability Report,
andour Net Zero Carbon Pathway which sets out our 2030 net zero carbon ambition and targets.
Energy consumption
The table below summarises energy consumption.
Energy consumption Units
2019
base year 2021 2022 2023
Change from
2022–2023
Electricity absolute consumption kWh 167,593,224 149,211,285 150,944,907 149,704,305 -0.8%
Natural gas absolute consumption kWh 57,414,070 59,170,049 58,816,746 56,121,430 -4.6%
District heat absolute consumption kWh 11,775,682 12,312,277 11,672,055 12,090,049 3.6%
Total energy absolute consumption kWh 236,782,976 220,693,611 221,433,708 217,915,784 -1.6%
Total energy intensity
kWh/bed 3,233.0 2,970.2 3,059.0 3,100.8 1.4%
kWh/m
2
122.6 113.4 115.6 111.9 -3.2%
Electricity from renewable sources % 61.1% 99.9% 99.9% 99.9%
Energy data reported is predominantly half-hourly meter data (94.7% and 91.7% respectively for electricity and gas), with the
remainder being billing data (4.6% and 6.8%) and a small number of estimates (0.8% and 1.5%) where neither meter or billing
data is yet available, in which case the previous year’s data for that site and month is used. District heating data is 52.7% billing
with 47.3% estimates. Note that values reported in MWh above can be converted to kWh by multiplying by 1,000.
Greenhouse gas emissions
The table below summarise absolute GHG emissions for the last three years.
Absolute GHG emissions Units
2019
base year 2021 2022 2023
Change from
2022–2023
Scope 1 Tonnes CO
2
e 10,669 11,009 10,905 10,410 -4.5%
Scope 2
Location-based Tonnes CO
2
e 44,910 33,784 31,204 33,172 6.3%
Market-based Tonnes CO
2
e 18,833 2,170 2,052 2,218 8.1%
Scope 1+2
Location-based Tonnes CO
2
e 55,579 44,793 42,110 43,582 3.5%
Market-based Tonnes CO
2
e 29,502 13,178 12,958 12,628 -2.5%
Scope 3 Tonnes CO
2
e 148,279 65,778 98,475 84,876 -13.8%
Bed numbers
(pro rata for sites only open part of year) 73,240 74,303 72,387 70,277 -2.9%
Floor area
(pro rata for sites only open part of year) m
2
1,931,148 1,945,560 1,915,339 1,947,292 1.7%
The table below summarises building-related GHG emissions intensity per m
2
(gross internal floor area) and per lettable-bed
regardless of occupancy.
GHG emissions intensity Units
2019
base year 2021 2022 2023
Change from
2022–2023
Scope 1+2
by floor area
Location-based kgCO
2
e/m
2
28.8 23.0 22.0 22.4 1.8%
Market-based kgCO
2
e/m
2
15.3 6.8 6.8 6.5 4.1%
Scope 1+2
by bed numbers
Location-based kgCO
2
e/bed 758.9 602.8 581.7 620.1 6.6%
Market-based kgCO
2
e/bed 402.8 177.4 179.0 179.7 0.4%
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CRREM 1.5°C energy pathway (v1.093)
Unite energy intensity (including Liberty in 2019 base year)
Unite Students energy intensity vs. CRREM pathways
2019 20302023 2024 2025 2026 2027 2028 2029202220212020
160
120
0
60
40
20
80
140
100
kWh/m
2
/year
CRREM 1.5°C energy pathway (v2.01)
SUSTAINABILITY continued
Absolute energy consumption fell by 1.6% compared to 2022,
but stripping out the impact of portfolio change reveals that
like-for-like consumption actually increased by 1%. Looking at
this in detail, like-for-like district heating consumption rose by
3.6% reflecting increased heating demand driven by slightly
cooler weather in 2023 compared to 2022 (which was the
UK’s warmest year on record). Like-for-like gas consumption
fell by 3.6% as a result of the replacement of gas boilers
with air source heat pumps throughout 2022 and 2023, in
turn contributing to a 2.6% increase in like-for-like electricity
consumption along with increased heating demand on sites
heated by electric panel heaters. This increase in heating
demand was partly offset by the impact of energy efficiency
capital projects deployed through 2022 and 2023 including
LED lighting, solar PV and improved heating controls, but
was significant enough to drive an overall increase. There are
also indications that changing customer behaviour and usage
patterns contributed to this increased energy use.
Scope 1 emissions fell by 4.5% reflecting reduced gas
consumption compared to 2022 as described above, but both
market-based and location-based Scope 2 emissions rose as
a result of increased electricity consumption, and there was a
small increase in UK national average grid emissions intensity.
Absolute Scope 3 emissions fell by 13.8% reflecting only one
new build opening in 2023 compared to two in 2022, as well
asa reduction achieved in embodied carbon of that new build.
Performance against targets
Our 2030 net zero carbon target requires us to achieve a 20.4%
reduction in market-based Scope 1+2 absolute emissions in
2023 vs. 2019 base year. Our 2023 market-based Scope 1+2
emissions of 12,645 tonnesCO
2
e (a 57.2% reduction vs. 2019)
puts us ahead of target.
Our 2030 energy reduction target requires us to achieve a
28%reduction in energy intensity by 2030 vs. 2019 base year
(atarget energy intensity of 80.9kWh/m
2
), with an interim
target of 101.3kWh/m
2
in 2023. 2023 performance is slightly
behind this, at 111.9kWh/m
2
, partly due to a slight reduction in
capital in 2023 as a result of challenging operating conditions,
but also partly due to increased heating demand in 2023 and
apparent changes to customer behaviour and usage patterns
driving up energy consumption. The chart opposite shows
energy intensity vs. our current CRREM-based target and the
recently updated new CRREM v2 pathway. Additional capital
spend is planned for 2024 and beyond to get back on track
with our CRREM-based energy targets. Our 2030 renewable
energy target is to purchase 100% renewable electricity in line
with RE100 requirements. 2023 performance is on target at
99.9%, with 29% of electricity purchased via a corporate PPA
and the remainder matched tounbundled REGO certificates.
Calculation methodology
GHG emissions are calculated in accordance with HM
Government’s Environmental Reporting Guidelines: including
streamlined energy and carbon reporting March 2019 and
the GHG Protocol’s A Corporate Accounting and Reporting
Standard including recent updates on Scope 2 reporting.
Therelevant emissions factors from the UK Government
emission conversion factors for greenhouse gas company
reporting (2023 data set) have been used to convert data from
sources including utilities meters, business travel mileage,
and water consumption into CO
2
e. Location-based Scope 2
emissions are calculated using the UK national average grid
emissions factor, whilst market-based Scope 2 emissions are
calculated on an emissions factor of zero for all electricity
purchased under our Unite Group supply contract which is
100% REGO backed, with 5MW also purchased via a corporate
PPA directly from a wind farm in Scotland.
Further details of what emissions sources have been included
in each Scope of emissions and of how relevant categories of
Scope 3 emissions have been calculated, are set out in our
stand-alone Sustainability Report.
Reporting boundaries
We report full energy consumption and corresponding GHG
emissions for all properties under operational control of
Unite Students, including properties owned outright by
UniteGroupplc entities and by JVs regardless of equity share.
All these assets are located in the UK and constitute 100% of
Unite Group’s global energy use and GHG emissions. Neither
energy consumption nor GHG emission data have been
normalised or adjusted for any factors such as occupancy or
weather. Our student customers pay a single all-inclusive bill,
and are not recharged for the energy, heat or hot water they
consume. This means that all energy used in both landlord
areas and student flats contributes directly towards our Scope
1+2 GHG emissions, rather than falling into Scope 3 emissions.
Consequently our most significant source of Scope 3 emissions
is the embodied carbon of new developments.
Independent verification
Energy consumption and Scope 1+2 greenhouse gas emissions
have been externally verified by SGS in line with the requirements
of ISO 14064-3:2019. Environmental performance data is also
undergoing external assurance by SGS to a reasonable level
of assurance in line with requirements of ISAE 3000 (Revised):
Assurance Engagements Other than Audits or Reviews of
Historical Financial Information, although this was still underway
at time of publication. Relevant opinion statements can be
viewed on our website. Due to data availability, a portion of
Scope 3 emissions have been verified to alimited level of Limited
Assurance. Details are set out in our stand-alone Sustainability
Report, and third-party opinion statements are available on
ourwebsite.
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There are a number of material environmental, social and governance (ESG) risks associated with the sustainability-related
themes and topics we have identified as materially significant for us, which are tracked and managed in accordance with
our overall risk management framework on page 70, with two overarching ESG risks listed on Principal Risk tracker (page
720. In line with the Task Force on Climate-related Financial Disclosure (TCFD) and recent UK Climate-related Financial
Disclosure (CFD) Regulations, a more comprehensive disclosure on climate-related risk is included below.
As part of our continuing response to climate risks and
opportunities, this year we published our Sustainable
Construction Framework and adopted a shadow carbon
price for new developments to continue our progress in
decarbonising our development pipeline.
We have complied with the requirements of LR 9.8.6R by
including climate-related financial disclosures consistent with
the TCFD recommendations, recommended disclosures, 2021
implementation guidance, and supplemental disclosures for
non-financial groups in this section and other parts of this Annual
Report where cross-referenced. In order to reduce repetition,
details of our plan and targets for transitioning to net zero carbon
as part of TCFD Strategy (b) recommended disclosures are set
out in our separate Net Zero Carbon Pathway and have not been
duplicated here within. Additionally, this disclosure complies with
the requirements of the Climate-related Financial Disclosures
(CFD) under the Companies Act.
We undertook a comprehensive materiality assessment of
sustainability topics and issues in 2020 and have continued to
engage with key stakeholders to ensure we stay focused on the
most important issues, and report on them in line with their
views and our own commitments. During 2023, we discussed
sustainability in meetings with investors, to update them on
the Unite Group’s climate performance and priorities and hear
their views on our Sustainability Strategy and performance,
particularly regarding our commitments on climate change.
TCFD Compliance Statement
Unite Group has reported on climate-related financial
disclosures consistent with HM Treasury’s TCFD-aligned
disclosure application guidance which interprets and adapts
the framework for the UK public sector. We have complied
withall TCFD recommendations including Governance,
Strategy, Risk Management and Targets and Metrics, in
line with the central government’s TCFD-aligned disclosure
implementation timetable. We plan to continue improving our
management and disclosure of climate-related risks in future
in line with the central government implementationtimetable.
TCFD disclosure
The Board recognises the scale of the challenge posed by
climate change, its potential impact on Unite Group’s activities
and the urgent need to take mitigating action. With the built
environment accounting for c.40% of global greenhouse gas
emissions, we also recognise our responsibility to do what
we can to minimise our carbon footprint and encourage our
customers to do the same. We have set out a detailed pathway
to achieve net zero carbon by 2030. We are committed to
improving the energy efficiency of our buildings and helping our
customers adopt sustainable living habits which will stay with
them for life. This is a goal shared by our investors, customers,
suppliers and people. As part of our Sustainability Strategy we
have set carbon reduction targets which have been validated
as 1.5°C, aligned by the Science Based Targets initiative (SBTi),
an operational energy efficiency target aligned with the CRREM
1.5°C UK Multi-family Residential trajectory, and have committed
under the RE100 initiative to source 100% of our electricity from
renewable sources by 2030.
More details on these and all other aspects of
how we will transition to net zero are outlined
in our Net Zero Carbon Pathway document.
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The Board also considers feedback on our ambition and
performance from investors, students, universities, employees
and local communities, to ensure we remain focused on the
most material issues. This ongoing process of stakeholder
engagement, feedback, and materiality assessment directly
informs the ongoing development and implementation of our
Sustainability Strategy and progress on page 66.
Governance
Our Chief Executive has overall responsibility for our climate-
related risks and opportunities with ongoing oversight of climate-
related issues delegated to the Sustainability Committee, a
sub-Committee of the Board. Our Sustainability Committee meets
four times per year to maintain Board oversight of environmental,
social and governance issues, and hold the business to account
for performance in this area, including the management of
climate-related risk. Climate risk and performance, including
our plans for achieving and progress towards our 2030 net zero
carbon target, are reviewed by the Committee. Further details
of the Committee’s activity during the year are set out in the
Sustainability Committee Report on page 120. The Board also
undertakes a twice-yearly formal risk review (see page 67), which
includes climate-related risks.
Committed to sourcing
electricity from
renewablesources
100%
Net zero carbon by
2030
Relevant climate-related risks and opportunities are considered
during business planning, proposals and investment cases
prepared for submission to the Management Board (the Property
Leadership Team and Customer Leadership Team), the Executive
Committee and the Sustainability Committee, ensuring both
management and the Board have visibility over climate-related
risks and opportunities, and can consider them in planning and
decision-making. Full responsibilities for managing climate-
related risks are set out on page 60.
Our performance against the annual budget for sustainability
investments is reported as a stand-alone spend category,
showing detailed performance against budgeted levels on a
monthly basis.
The Remuneration Committee sets performance objectives
linked to all employees’ bonuses and incentive schemes, with a
number of climate and sustainability metrics including GRESB
rating, energy intensity, EPC ratings and our employee Positive
Impact scheme contributing to overall remuneration. Details of
the Executive Director bonus and LTIP components, including
the weighting and targets can be found in the Remuneration
Committee report on page 127. Performance against the 2023
bonus targets, is also in this section.
Members of the Sustainability Committee are informed of best
practice, market expectations, and given climate-related updates
by internal and external specialists and expert advisers, including
investors and supply chain partners. Board members gain further
experience of climate-related risks and opportunities through
their work with other businesses.
We undertook a comprehensive
materiality assessment of
sustainability topics and issues
in2020 and have continued to
engage with key stakeholders to
ensure we stay focused on the
mostimportant issues, and report
on them in line with their views
andour own commitments.
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UNITE GROUP PLC BOARD
Ultimate responsibility for setting Unite Group strategy, prioritisation of activities and capital allocation.
Provides challenge to management on target setting and performance.
Ensures Unite Group maintains an effective risk management framework, including climate-related risks and opportunities.
CHIEF EXECUTIVE AND EXECUTIVE COMMITTEE
The Chief Executive is ultimately responsible for managing climate risk, realising climate opportunities and implementing the
Sustainability Strategy with support from the Executive Committee. The Executive Committee reviews the annual business
plan, and long-term Strategic Plan for Unite Group, which covers all aspects of performance including climate risks and
opportunities, ahead of recommending it to the Board. On a monthly basis, the Executive Committee reviews actual and
forecast performance, including climate-related performance as appropriate, taking action to improve wherever necessary,
and reports this progress to the Board.
The Board delegates specific climate matters to its Committees:
SUSTAINABILITY COMMITTEE REMUNERATION COMMITTEE AUDIT AND RISK COMMITTEE
Four meetings in 2023.
Oversees development and
implementation of our Sustainability
Strategy and recommends any
changes to the Board.
Reports progress to the Board
quarterly with input from across
theGroup.
Chaired by Dame Shirley Pearce with
two Non-Executive Director members.
Attended by Group Chair, CEO,
CFO, Group Investment Director,
Head of Sustainability and Group
PeopleDirector.
Five meetings in 2023.
Chaired by Nicky Dulieu
with threeNon-Executive
Directormembers.
Engages with shareholders to
informtarget setting, including
climate-related objectives.
Supports the Sustainability Strategy
by aligning remuneration and
incentive targets to the strategy.
Five meetings in 2023.
Chaired by Ross Paterson
withthreeNon-Executive
Directormembers.
Ensures climate-related risks
and opportunities are identified,
assessed, then effectively mitigated
and managed as part of overall risk
management framework.
Oversees preparation of Unite
Group’s financial disclosures,
including TCFD, and the
AnnualReport.
PROPERTY LEADERSHIP TEAM CUSTOMER LEADERSHIP TEAM
Chaired by the Group Investment Director, responsible for
all property-related investment and divestment activity.
Manages climate risk and opportunities in investment
decisions, such as improving EPC ratings or mitigating
floodrisk on potential development sites.
Tasked with reducing embodied carbon and improving
operational energy performance of developments, in line
with our 2030 net zero carbon target.
Manages sustainability investment performance against
budgets for the Unite Group, including consideration of
climate-related risks and issues in investment opportunities.
Chaired by the Chief Customer Officer, responsible for
operating the investment property portfolio.
Manages climate risks and opportunities by investing in
energy and carbon reduction improvements to buildings,
and educating student customers to reduce resource usage.
Ensures plant is properly maintained to operate at designed
energy efficiency.
Identifies opportunities to secure low-carbon energy
through Power Purchase Agreements.
Reviews, monthly, detailed financial performance relating
to energy use, taking actions to mitigate variance from
approved budgets.
ENERGY AND ENVIRONMENT TEAM
Led by the Head of Sustainability, a dedicated team
with operational responsibility for coordinating the
implementation of the Sustainability Strategy.
Head of Sustainability regularly reports progress to the
Property and Customer Leadership Teams, Executive
Committee and attends Sustainability Committee meetings.
Responsible for developing asset transition plans,
implementing energy and carbon reduction capital
projects,ensuring EPC and wider energy and climate-
related compliance.
Produces reporting on climate-related and
sustainabilityperformance.
R
R
R
R
I
I
I
I
I R
KEY
Informing Reporting
Organisational structure and responsibilities
formanaging climate-related risks
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Strategy
We recognise climate change is one of the principal risks facing
Unite Group, with the potential to impact our business in the
short, medium and long term, so we are aiming to be net zero
carbon by 2030 – full details of our targets and plans to achieve
this transition are set out in our Net Zero Carbon Pathway,
seedetails below.
We face potential acute and chronic physical risks from the
direct and indirect effects of climate change on our business,
including extreme weather and flooding. Potential transition
risks associated with the shift to a low-carbon economy include
changing consumer preferences, impacts on investment
property valuations according to their climate resilience and
energy performance, and future policy and regulation. These
also present opportunities where, for example, our leadership
in the sector may be valued by our customers and ultimately
lead to improved financial performance. Further detail,
including the process used to determine materiality of risks,
isincluded within the Risk Management section on page 67.
Time periods:
S
Short term: 0–3 years – Our highest confidence
forecasts including the detailed year budget and
subsequent two years where we have significant
visibility in our Business Plan.
M
Medium term: 3–10 years – Covers the period to
our 2030 net zero carbon target, asset transition
plans and other regulatory deadlines such as EPC
B in 2030 and the useful life of building fit out.
L
Long term: 10–30 years – The period beyond
our forecasting and planning horizon and the
age where PBSA can begin to face obsolescence
without investment.
Risk Acute physical
Heat Stress Flooding
Description Rising average and frequency of heatwaves could
make our buildings uncomfortably hot during the
summermonths.
Increased rainfall increases the risk of both flash
flooding and rivers bursting banks.
Impacts Under 2°C scenario, we may see some increased
frequency and severity of overheating necessitating
ad hoc measures such as temporary ventilation or
cooling, the need to provide temporary alternative
accommodation to the worst affected customers,
or inability to occupy some rooms for short periods.
Under 4°C scenario, we may be unable to let buildings
during the summer, without more meaningful building
adaptations to reduce solar gain (e.g. brise soleil or
improved glazing), building fabric modifications (e.g.
thermal mass or reflective roofs), or building services
changes (e.g. re-routing hot water services, improved
ventilation, or active or passive cooling). Further work
is needed to understand asset-specific risks and
adaptations and inform long-term asset management
plans and budgets, and strategic investment decisions.
Flood could impact a single property causing temporary
disruption to operation or damage to the building
itself. In the most extreme scenario flood damage may
require temporary closure of an asset and rehousing
of occupants. Operations may also be impacted by
flooding elsewhere that disrupts supply chains or
communications even if individual properties are not
directly affected. Under 1.5°C scenario, no materially
significant increase in likelihood or severity was seen,
however further analysis is required to determine how
this risk increases under 2°C and 4.5°C scenarios.
Time period
S
M
L S
M
L
Financial
risks and
opportunities
c.£15 million of summer short-term lettings income
at risk and increased cooling costs. Compensation for
tenants on longer tenancies through the summer.
Higher temperatures during winter may reduce the
heating requirement of our buildings.
Worst case outcome of a major flooding event could
be closure of a building for 12 months with lost income
of up to £12m. Likelihood of such an outcome is seen
as low under 1.5°C scenario, but increasing under
2°C and 4.5°C scenarios. Geographic spread, locales
and construction of assets mean risk unlikely to affect
numerous buildings simultaneously.
Government flood risk data shows c.10% of the
assets are at High (1 in 76–100 years) or Very High (1
in <75 years) risk of flooding. Increased flooding risk
will be reflected in the premiums charged by Unite
Group’sinsurers.
Full details of our targets and plans to achieve
this transition are set out in our Net Zero
Carbon Pathway.
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Risk Acute physical
Heat Stress Flooding
Scenario
methodology
We compared forecast summer temperatures under
1.5°C, 2°C and 4.5°C scenarios using RCP8.5 projections
versus the 1981–2010 baseline (UKCP18 data from Met
Office Hadley Cell GCMs HadREM3-GA705) to assess
frequency and severity of overheating incidents, and
corresponding impact on thermal comfort in our
buildings-based temperatures achieved under recent
hot weather events. More detailed asset and room level
analysis is planned for 2024 to assess factors including
fabric, ventilation, solar gain and internal heat gains
and identify potential adaptations.
We compared forecast winter rainfall under 1.5°C, 2°C
and 4.5°C scenarios using RCP8.5 projections versus the
1981–2010 baseline (UKCP18 data from the Met Office
Hadley Cell GCMs HadREM3-GA705). We assessed increase
in frequency and severity of flooding and corresponding
disruption/damage to our buildings based on our the
impact of recent flooding events to ourbuildings.
Mitigation and
adaptation
activities
Further, more detailed analysis of overheating risk is
planned for 2024. This will inform future capital and
asset management plans to ensure this risk is fully
quantified and effectively mitigated.
New development schemes and larger asset
management programmes are designed to
ensureappropriate temperatures are maintained.
We maintain flood response plans at higher risk
properties. We reviewed the flood risk of the portfolio
during 2021, in partnership with our insurers and
further more-detailed analysis is planned for 2024
toupdate flood risk assessments.
Risk Transition
Technology Reputation Policy and legal
Market risk, commodity and
resource efficiency
Description Risk that sufficient
improvements to
an individual asset’s
performance cannot be
achieved at the pace or
scale required for the
transition to a low-
carboneconomy.
Our close relationships and
day-to-day engagement
with university partners,
students, investors and
other stakeholders makes
it clear they expect us to
take urgent and meaningful
action on climate change.
Regulation and government
policy will continue to
evolve and increase
minimum standards of
building performance and
other requirements aiming
to accelerate the transition
to net zero carbon.
We face market risk
through energy pricing
and increased costs
if our use of energy is
not mitigated through
efficiencyinvestment.
Impacts Individual assets’ rental
income, operating costs,
asset value and liquidity
may be adversely impacted
if they do not meet evolving
regulatory standards, such
as future Minimum Energy
Efficiency Standards (MEES)
for Energy Performance
Certificates (EPCs), or
market or shareholder
expectations such as
decarbonisation in line
withthe CRREMpathways.
Our leadership in the sector
may be recognised by our
customers and partners,
providing additional
business opportunities or
income benefits from our
leadership in sustainability.
Failure to at least
meet stakeholder
expectations could be
detrimental to business
performance through
many channels, including
our ability to secure
nomination agreements
with universities and
increasedfinancing costs.
Regulations may require
increases in the scale or
pace of our investment
in decarbonisation.
Introduction of mandatory
carbon pricing could
impact the viability of our
development pipeline and
increase ongoing operating
costs of the existing portfolio.
Failure to meet minimum
standards could also have
significant reputational
impacts, as set out in
principal risks 9 and 10
onpage 76.
Energy price volatility
complicates forecasting,
and recent high prices
have significantly increased
operating costs. Failure to
manage energy purchasing
could intensify this impact.
Valuers are starting to
reflect utility costs in
asset valuations and we
expect further downwards
pressure on valuations if
energy efficiency is not
improved to offset this.
Time period
S
M
L S
M
L M
L S
M
L
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Risk Transition
Technology Reputation Policy and legal
Market risk, commodity and
resource efficiency
Financial
risks and
opportunities
Our 2020 Net Zero Carbon
Pathway identified a
need to invest c.£10–£12
million p.a. to achieve our
2030 ambition. We have
already committed c.£30
million, with investment
ramping up over the
coming years. These
investments typically
payback in 10 years or
lesson an undiscounted
basis, through savings to
utility costs.
A green premium to
asset values has not yet
manifested in the PBSA
sector. It is anticipated
that a brown discount will
take effect over the next
3–5 years if assets are at
risk of failing EPC MEES or
expectations on energy
and carbon.
Not usefully quantifiable
with existing data.
The UK Government has set
a legally binding net zero
target of 2050 but there
are currently no mandatory
requirements for action.
However we expect to
spend c.£10–£12 million
p.a. on our transition to
net zero carbon by 2030
through energy efficiency
investment. It will not be
lawful to let any property
not meeting EPC C by 2027
or B by 2030, potentially
leading to loss of earnings
and enforcement fines.
However following recent
investments, 92.3% of floor
area is now A or B rated so
we have low exposure to
this risk.
We spend around £30
million per year on utilities,
making it our second-largest
category of operating spend
after people costs. Ongoing
market volatility makes
forecasting difficult, and
we expect our utility costs
to rise as existing supply
contracts and hedges expire
over the next 12 months.
We have targeted a
10-year payback on our
investments in energy
efficiency, implying c.£10
million p.a. savings on our
total expected investment.
If utility prices remain high,
then the potential savings
from this investment will
also increase.
Scenario
methodology
We assess individual
assets against the CRREM
1.5°C pathways for UK
multi-family residential
energy consumption
and carbon emissions
(on a market-based
Scope 2 basis), and have
reviewed all EPCs against
relevant UK EPC MEES
targets. We expect all
assets to meet MEES as a
result of planned capital
investments as part of our
transition to net zero.
The nature of this risk
means it cannot easily be
modelled under specific and
defined climate scenarios.
While reputation is a critical
enabler for the fulfilment of
our business objectives, it
cannot easily be quantified
or assessed, although it
is regularly tracked and
measured via our Higher
Education Engagement Net
Promoter Score.
We have assessed the levels
of investment that may be
required to improve EPC
ratings in line with different
potential targets, using our
experience and insight from
previous capital projects
and improvements.
Utilities costs are complex,
being a function of
consumption, commodity
price and non-commodity
prices. We have modelled
the potential impact on
overall utility costs and the
corresponding business
consequences (such as
reduce NOI or increased
rental growth to mitigate)
based on low, medium
andhigh energy price
inflation scenarios.
Mitigation and
adaptation
activities
Planned capital
investments aim to reduce
energy and carbon in
line with our SBTi and
CRREM-based targets and
so avoid asset stranding.
We will continue to review
the level of ambition and
targets, and monitor
progress against these
plans to inform the
ongoing development
of our strategy and
takecorrective action
where required.
We actively engage with
our customers, university
partners, suppliers and
investors to explain and
seek feedback on our
sustainability performance
and goals in addition
to understanding their
requirements and
expectations.
Our sustainability and
legal teams, with support
from our expert advisers,
routinely monitor upcoming
and proposed regulation
to ensure we can adapt
ahead of introduction to
remain compliant. Our
planned capital investment
will ensure all of our
buildingsmeet minimum
efficiency standards.
We forward purchase
our utilities so that we
have price certainty when
putting rooms on sale,
allowing us to confidently
set prices at an appropriate
level to reflect the costs
whichweface.
Around 20% of our
electricity is secured
through a corporate
PowerPurchase Agreement
(PPA), giving us certainty of
supply over multiple years.
We are actively exploring
opportunities to secure
additional PPAs given the
compelling environmental
and financial impacts.
RCP8.5 was chosen for scenario analysis to demonstrate the
potential impacts on Unite Group under a widely recognised
high-end impact scenario, where the Paris targets are
substantially missed. Adopting RCP8.5 demonstrates upper
bound impacts of climate change, also assessing intermediate
impacts as 1.5°C and 4.5°C are crossed, which is relevant for
the strategic resilience analysis and conclusion.
Unite Group operates solely in the United Kingdom and
generates substantially all of its income through letting
purpose-built student accommodation. Sector and geographic
considerations are therefore not considered material to
climate risk at the Group level. For individual properties,
geographic considerations can be a material risk as
discussedin the Risk Management section.
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We have a potentially significant opportunity to benefit from
the actions we take to address climate-related risks. Reducing
energy consumption will generate significant cost savings,
increasing net operating income and asset values over the
short, mid and long term. Improving climate resilience, such
asreducing overheating risk, will improve customer experience
and provide competitive advantage in the mid to long term.
Our clear and credible net zero carbon plans are aligned with
the expectations and requirements of university partners and
local government, potentially supporting new development
and growth opportunities, and equity and debt capital may
be more readily available, or at lower cost, if we can meet
and exceed market expectations around sustainability
performance in the short, mid and long term.
During 2023, climate risks and opportunities were tracked as
part of our financial planning and risk management relating to
utility costs, where usage levels could have an impact on our
financial performance due to the volatility in commodity costs
created by geopolitical issues. Our 2024 budget and planning
include further assessments of our exposure to utility costs
and the potential to mitigate cost increases through capital
investments in energy initiatives.
Green debt issuance, either on public capital markets or privately,
continues to gain pace. Unite Group has a Sustainable Finance
framework, enabling it to access the Green Bond market and
has also embedded sustainability performance into the Unite
Group’s main bank facility. Failure to meet the targets set out in
the Sustainability Framework may reduce Unite Group’s ability to
access debt capital markets for green loans, potentially resulting
in higher financecosts.
Climate risk, most commonly energy usage, flood and
transition risk are considered in capital allocation decisions.
All potential acquisitions and disposals are reviewed to
identify the costs of meeting our net zero commitments,
EPCrequirements and ongoing utility costs and ensure that
these are properly reflected in financial modelling and form
animportant part of our due diligence.
New developments are expected to be net zero carbon, as
defined by the RIBA Climate Challenge, in addition to being
highly resource efficient through the use of technology such
as rainwater harvesting, low water usage shower heads
and solar electric generation. Developments are designed
to mitigate overheating risk and include associated cooling
requirements. For certain development sites, flooding is a
significant risk which must be mitigated through appropriate
design and construction methods to meet regulatory and local
authority planning requirements. The cost of this mitigation
is included within our investment appraisals and we may
require a higher return on investment where the mitigated
riskremainssignificant.
We assessed flooding and heat stress exposure of our portfolio
under scenarios based upon the Intergovernmental Panel for
Climate Change RCP scenarios consistent with 1.5°C, 2.0°C
and 4.5°C temperature rises. The analysis showed that under
a 4.5°C scenario, heatwaves, as defined by the Met Office,
become increasingly regular during the summer and the risk
of flooding increases from a one in c.250-year event to a one
in c.200-year event, with a marginal change in frequency under
1.5°C and 2.0°C scenarios.
Scenario analysis to date gives us confidence that our
current strategy, including actions set out in our Net Zero
Carbon Pathway, provide resilience under a 2.0°C or lower
temperature rise scenario, although we will continue to review
and re-evaluate these risks and adapt our strategy as required.
Under a 4.5°C scenario, our analysis demonstrates that
changes to our strategy and financial planning will likely be
required to ensure we remain resilient in the face of increasing
severity and likelihood of flooding and overheating. This may
include divestment of assets which are less resilient to extreme
heat and rainfall, investment in assets to improve physical
resilience, and changes to ways of working and operating
to ensure potential impacts are managed and mitigated.
We may also see changes to our customers’ behaviour and
supply chain partners’ viability, including business failures or
supply chain disruption. Increased due diligence in supply
chain selection will be required, particularly considering the
sourcing of construction materials which may be processed
or manufactured in countries where the effects of climate
change are more extreme. Further, more detailed analysis is
planned for 2024 with a particular focus on overheating risk, to
better understand what specific changes to strategy would be
needed to ensure resilience to a 4.5°C scenario, and given the
timescale leading up to a 4.5°C world, we would expect to have
time to adapt our strategy accordingly.
Risk management
Climate change is a principal risk affecting long-term decisions
made by Unite Group, such as decisions on investment and
divestment. Therefore, it is considered in a broad context within
our strategy and as part of our risk management framework.
Create a Responsible and Resilient Business is one of three
main objectives of our strategy, incorporating our commitment
to net zero carbon by 2030, together with broader objectives
to reduce resource intensity and enable ourcustomers to live
more sustainable lives.
We work with teams across the organisation, senior
management, external advisers and stakeholders to identify
the strategic, operational, legal and compliance risks facing
our business. These are included on our Unite Group Risk
Register, which is challenged and validated by the Executive
Committee. Our principal risks, which are a sub-set of our
Group risks, are reviewed by the Board twice a year. Climate
change has been identified as a principal risk and is managed
through our risk management framework. This framework
enables us to effectively manage climate-related risks. All
risks are allocated a risk owner, evaluated for the potential
impact and consequences, controls and control owners are
identified, and finally an evaluation of the residual risk against
our risk appetite is undertaken. Scenario modelling, including
the climate scenario analysis detailed in this TCFD disclosure,
is used to better understand the impact of these risks on our
business model when placed under varying degrees of stress,
enabling interdependencies to be considered and plausible
mitigation plans to be tested.
CLIMATE-RELATED FINANCIAL DISCLOSURES continued
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We undertook a climate-related risk scoping workshop
assessment, as part of our overall risk management process
described in the risk management report. It covers the
constituent risks of our broader sustainability and ESG risk.
Itidentifies the most material risks and assesses their potential
impacts under different future climate scenarios, as well as the
likelihood, business consequences, and possible management
and mitigation strategies. Risks are assessed for potential
likelihood and impact, and rated using a 5 x 5 matrix on a
scale of 1 to 25 (from very low to critical), giving each risk a
score. This approach is common across all risks, allowing a
comparison of climate risk with all other risks identified by
the Group. When we evaluate risk, we consider the inherent
risk (before any mitigating action) and the residual risk (the
risk that remains after mitigating actions and controls) to
determine the materiality of the risk and its impacts in the
context of theGroup.
The process for assessing, identifying and managing
climate-related risks is the same as for all principal risks,
withresponsibility sitting with the Board. It is described in the
Principal risks and uncertainties section.
The Energy and Environment Team is responsible for integrating
sustainability activity into the wider business including tracking
and reporting on climate, legal and policy-related developments,
which allow the business to effectively manage any associated
risks. This includes MEES regulations covering minimum EPC
standards and the development and implementation oftransition
plans for those assets which do not meet future standards. We
closely monitor future, or potential regulatory requirements in all
areas of our business including climate change, to ensure that we
are able to take any actions required to meet new requirements
as they become effective.
Portfolio and asset level climate-related risks and opportunities are
identified and assessed through due diligence for new investment,
divestments and risk assessments for existing assets which cover
specific climate-related risks, such as energy efficiency ratings
of properties and physical climate risks, as well as in individual
property level Asset Transition Plans:
Existing assets – risks are identified through compiling and
analysing data on specific property attributes, such as flood
risk, transition risk through the CRREM tool outputs, and
energy performance. This data would typically be analysed
annually and is used to inform asset management decisions
and the business’s disposal strategy.
Investment and divestment – review of sustainability risks
for investment decisions is undertaken by the Investment
Committee. Geographical location plays an important
part in the identification of physical risks during the due
diligence process, for example through the use of flood and
overheating risk assessments. Transition risks are identified
through reviewing energy efficiency ratings, existing plant
and machinery, construction type and an estimate of the
investment required to deliver energy intensity targets
alignedto our net zero operational commitment.
Where a risk is identified, we develop appropriate mitigation
strategies in the case of new developments or reflect the risk
in acquisition pricing if the risk is capable of mitigation to an
acceptable level.
Metrics and targets
We are committed to transitioning to net zero carbon in
alignment with the UK Government’s 2050 target and with
the goals of the Paris Agreement. Our Sustainability Strategy
includes a net zero carbon commitment by 2030. This is built
on our science-based targets approved by the SBTi, and a
commitment under the RE100 scheme to purchase 100%
renewable electricity by 2030.
We published our Net Zero Pathway during 2021, setting
outthe action we will take over the coming decade and will
be reviewing both our climate-related targets and plans, and
climate-related risks, in 2024 to ensure our net zero carbon
transition plan remains credible and achievable.
As a residential landlord, our customers’ energy use is included
within our Scope 2 emissions, which provides us with a significant
opportunity to reduce both our own and our customers’ impact
on the environment. Our strategy, as set out in our Net Zero
Carbon Pathway, includes ambitious targets in response to the
most material climate-related risks we face:
Science-based target, aligned with a 1.5°C scenario to reduce
our carbon emissions (tCO
2
e) by 56% by 2030 compared with a
2019 baseline (Scope 1 + market-based Scope 2 emissions).
Reduce embodied carbon across our developments by 48%,
in line with the RIBA Climate Challenge targets. By 2030, where
possible, a typical building will prioritise asset retention, smart
design and use sustainable materials.
Reduce energy intensity by 28% by 2030 compared with
2019baseline.
Source 100% of total energy consumption from renewable
sources by 2030.
We expect that 40% of our 2019 baseline emissions,
beingpredominantly Scope 3 emissions, will remain by 2030
and require either further investment to avoid, or the use
ofoffsetting.
Our 2030 net zero carbon target covers both our operations
and development activity. Our operations targets cover Scope
1+2 emissions from our buildings, including all building energy
used by our student tenants, as well as selected Scope3
emissions as per the BBP Climate Change Commitment.
Our development target covers Scope 3 emissions arising from
the construction of new buildings, including embodied energy
and construction activity, and a focus on making new buildings
net zero carbon in operation. This target applies to properties
delivered for us by our supply chain partners on a design-and-
build basis, and new build properties purchased on a forward-
funded basis from other developers. Further detail is available
in our Net Zero Carbon Pathway and Sustainable Construction
Framework, which also includes interim targets for embodied
carbon reduction in our development pipeline.
CLIMATE-RELATED FINANCIAL DISCLOSURES continued
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The table below sets out some key performance indicators that are linked to our 2023 sustainability targets on page 52.
KPI
Performance
2019 base year 2021 2022 2023 2022–23 change
Investment in
energyefficiency
£2.2 million £3 million £13 million £8.2 million £4.8m decrease
Scope 1+2
(market-based)
absolute emissions
(tonnesCO
2
e/yr)
29,502 13,178.0 12,957.7 12,628.0 2.5% decrease
Average energy
intensity (kWh/m
2
/year)
122.6 113.4 115.6 111.9 3.2% decrease
EPC ratings by floor
area
A–B C D–G A–B C D–G A–B C D–G A–B C D–G
19.2% increase
in A–C rated
floorarea
41.2% 19.7% 39.1% 36.4% 19.4% 44.3% 61.2% 19.3% 19.5% 92.3% 7.4% 0.3%
GRESB rating 72*** 85**** 84**** 86***
2 point
improvement
Water consumption
per m
2
floor area (m
3
/
bed)
1.6 40.1 45.5 39.1 14.1% decrease
% of electricity from
renewable sources
61.1% 99.9% 99.9% 99.9% no change
Total social investment
c.£1 million to Unite
Foundation £1.8 million £2.0 million £2.4 million 20% increase
Positive impact awards
66% Bronze
34% Gold
Programme
suspended due to
pandemic
100% bronze
24% Bronze
52% Silver
24% Gold
Significant
improvement
We have c.£12 million of capital investment in energy efficiency planned for 2024, including LED lighting, air source heat pumpsand
improved heating controls, and are exploring options to bring more of our purchased electricity under long-term Power Purchase
Agreements to meaningfully decarbonise our energy supply.
Climate-related metrics are included in Company bonus and incentive schemes as set out in the Governance section of thisdisclosure.
Energy consumption and Scope 1+2 greenhouse gas emissions have been externally verified by SGS in line with the requirements
of ISO 14064-3:2019. Environmental performance data is also undergoing external assurance by SGS to a reasonable level
of assurance in line with requirements of ISAE 3000 (Revised): Assurance Engagements Other than Audits or Reviews of
Historical Financial Information, although this was still underway at time of publication. We review our performance against
the metrics set out above on an ongoing basis as part of our business performance. Investment into sustainability measures
ismade with reference to these metrics and our individual asset transition plans have been developed to support our Net
Zero Carbon Pathway. Should performance diverge from the required trajectory to 2030, wewill assess and potentially
accelerateinterventions.
Cross industry, climate-related metrics
TCFD Metric Amount or reference
GHG emissions See above
Transition risks 0.3% of investment property portfolio, EPC D rated, or below
Physical risks 100% of investment property portfolio
Opportunities 100% of investment property portfolio
Capital deployment £8.2 million in 2023; c.£10–12 million p.a. to reach net zero carbon by2030
Internal carbon prices Expect to be implemented in 2024
Remuneration See Remuneration Report on page 127
CLIMATE-RELATED FINANCIAL DISCLOSURES continued
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PRINCIPAL RISKS AND UNCERTAINTIES
Governance
The Board has overall responsibility for the oversight of risk as
well as maintaining a robust risk management framework and
internal control system. The Audit & Risk Committee supports
the Board by receiving assurance reporting, enabling it to review
the effectiveness of our risk management and internal control
processes. Our risk management framework is designed to provide
the Board with the information to clearly identify our risks, assess
our risk profile and set our risk appetite, to ensure risks are
managed and mitigated transparently and effectively. Integral
to this design is our agility and resilience tomacroeconomic and
political challenges.
Risk management
Our integrated risk management approach combines a top-down
strategic view with a bottom-up operational view. The output is a
number of strategic risks under seven categories.
The Board conducts a twice-yearly dedicated risk review. As part
of this focused activity, the Board undertakes its assessment of
the principal risks facing the Group, taking account of those risks
that would threaten our business model, future performance,
solvency or liquidity, or our ability to meet the Group’s
strategicobjectives.
REFLECTING ON 2023
Navigated the impacts of the
cost-of-living crisis.
Considered possible development
scenarios for Unite Group as we
move towards 2030 and the potential
mitigations to meet our objectives.
Engaged with our university partners and
the wider sector to influence the impact
of political risks.
Enhanced our IT infrastructure
andsecurity.
OUR PRIORITIES FOR 2024
Utilise new technologies to increase
thelikelihood of successful projects
andprogrammes.
Planning and development of our
new financial and core systems
and our alignment with upcoming
legislativechanges.
Continually assess and challenge our
maturity in cyber security.
Continue to assess the impacts of
macroeconomic factors on our strategy.
RESILIENT
AND AGILE
Flexibility in our approach
to risk management enables
us to navigate a challenging
macroeconomic environment,
andpositions us well against
potential future impacts.
Our approach to risk management
enables informed and effective
decisions to be taken, and supports
the delivery of our operational and
strategic objectives.
Mike Burt
Chief Financial Officer
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Internal Audit provides assurance on effectiveness of risk
management process and testing of key controls
Monitor KPIs & risk controls and take appropriate action
Top-down
Strategic risk management
Executive Committee/Customer Leadership Team/Property Leadership Team
Identify principal risks
Direct delivery of strategic actions
in line with risk appetite
Monitor key risk indicators
Consider completeness of
identified risks and adequacy
ofmitigating actions
Consider aggregation of risk
exposures across the business
Business units
Report current and emerging risks
Identify, evaluate and mitigate
operational risks recorded
inriskregister
Execute strategic actions
Report on key risk indicators
Board/Audit & Risk, Sustainability and Health & Safety Committees
Review external environment
Robust assessment of principal risks
Set risk appetite and parameters
Determine strategic action points
Assess effectiveness of risk
management process and
internalcontrol systems
Report on principal risks
anduncertainties
Bottom-up
Operational risk management
OUR INTEGRATED RISK MANAGEMENT APPROACH
OUTPUT – SEVEN RISK CATEGORIES
Read more on
page 72
Read more on
page 74
Market
Manage our
supply and
demand risk
Read more on
page 73
Operational
Minimise the risk
of an incident
Property/
development
Deliver enhancements
to our existing
estate and a suitable
development pipeline
Read more on
page 78
Technology
Maintain a secure
IT environment
Read more on
page 75
People
Retain a high
performing
workforce
Read more on
page 76
Sustainability/
ESG
Meet our
regulatory and
publicly made
commitments
Read more on
page 79
Financial
Manage our
balance sheet
liquidity
In summary, we have considered the following factors when
assessing our principal risks:
Geopolitical instability, including the ongoing war in Ukraine,
the conflict in Gaza and increasing tensions across the Middle
East due to this. This has contributed to higher energy costs
and general inflationary pressures across the UK.
Increased levels of inflation for a prolonged period.
Increases in interest rates from historic lows, which are
unlikelyto return in the short to medium term.
A disrupted UK labour market with low unemployment
and high vacancies leading to recruitment challenges
andpayincreases.
Political change with a general election due before
31January2025, which may have implications for
HigherEducation and Housing Policy.
These external factors impact our risk profile to varying
degrees and we have seen an impact in certain areas, such
asto our cost of funding, build-cost inflation and recruitment.
Other impacts are still emerging. Our year-end assessment of
risk has included how these external factors have impacted
and the action we are taking to mitigate them.
PRINCIPAL RISKS AND UNCERTAINTIES continued
The Board considers both internal and external factors when
assessing our risks. During 2023, we also considered our long-
term strategic aims and assessed both the opportunities and
risks through an in-person scenario planning session. Looking
ahead to 2024, there are a number of macroeconomic and
political factors we have reviewed.
As part of the risk review process, the Board considers the
appropriateness and relevance of the internal audit plan for
the forthcoming year, looking to ensure that the focus areas
for internal audit is consistent with our key risks.
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Our risk appetite
The Group’s risk appetite is considered as a fundamental part
of the Board’s strategy setting and annual budget – it does not
happen in isolation. Our risk appetite is underpinned by our
strategic objectives of:
Delivering for our customers, employees and universities.
Being a responsible and resilient business.
Providing attractive returns for our shareholders.
During the year, the Board continued to regularly review and
assess our risk appetite with a primary focus on the resilience
of the business and its agility. This considered both threats to,
and opportunities in, our business, as well as wider macro risk
developments impacting the PBSA sector, the Higher Education
sector, property market and the economy. When assessing our
risks and any action required to bring them back within the
tolerance of our risk appetite, we consider both the potential
impact from a risk, together with the likelihood of the risk
happening. Our overall risk appetite in the year was broadly
unchanged from the previous financial year. While the impact of
inflationary pressures is reducing, other macroeconomic factors
and political uncertainty still exist and the Board continues to
take a prudent approach to both risk and opportunity.
Stress testing/scenario planning and our Strategic Plan
Each year, the Board develops and refreshes the Group’s
Strategic Plan. This is based on detailed three-year strategic/
financial projections/climate-related risks (with related scenario
planning). This rolls forward for a further two years using
more generic assumptions. The Board maps our strategic
objectives against our risk profile. Then, always conscious that
risk events donot necessarily happen in isolation, the Board
stress tests these projections against multiple combined risk
events. Throughthis process, a base case and stress-tested
StrategicPlanare developed.
During 2023, this scenario planning continued to closely monitor
the external factors and the Board developed a wide range
of scenarios and stress tests to assess our preparedness and
ability to withstand adverse market conditions.
Fraud risk
The Group’s internal controls and risk management processes
work in tandem to minimise the likelihood of material fraud, both
within the business and in our financial reporting. We consider
the risk to asset misappropriation, fraudulent statements and
corruption. The controls the Group has in place are designed
to minimise the opportunity, motivation and rationalisation for
individuals to find opportunities to commit fraud. Our IT and
financial systems are designed with segregation of duties to
ensure that individuals are not able to override management
controls of end-to-end processes. Our internal Risk and
Assurance team undertake independent audits across both
operational and financial aspects of the business to verify that
these controls are operational and would report any instances
offraud to senior management. Instances of material fraud
would be reported to the Board.
Creating the right corporate culture for effective
riskmanagement
The organisation has an open and accountable culture,
led by an experienced leadership team. The culture of the
organisation recognises – and accepts – that risk is inherent
in business and encourages an open and proactive approach
to risk management. By viewing our risks through the lens
of our strategic objectives, the Group is able to ensure risk
management is proactive and pre-emptive and not a tick
boxexercise.
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Our risk management framework
OUR KEY RISK INDICATORS
The Board has the overall responsibility for the governance of risks and ensures there are
adequate and effective systems in place. It does this in various ways:
The Board
Risks and opportunities assessed as part of strategy setting,
annual budget and risk oversight
Owned by the Board and its Committees.
Twice-yearly formal risk review and ongoing monitoring of risk integral
toBoardmeetings.
Risk management
Risk management and assurance
framework overseen by the Audit &
Risk Committee. Detailed risk trackers
are developed and regularly updated
by the Customer and Property
Leadership Teams.
The Executive Committee reviews
and challenges these risk trackers
and related risk and opportunity; it
considers emerging risks that the
Group is facing or should consider and
then brings these to the Board for its
detailed assessment of these risks.
Policies and controls
Policies and controls underpin our
riskmanagement framework
(such as Capital Operating
Guidelines, Treasury Policy,
InvestmentCommittee and the
internal controls framework).
Risk assurance is provided through
external and internal auditors, as well
as specialist third-party risk assurance,
where appropriate.
Our service
platform
Safety
Customer satisfaction
Employee engagement
University
partnerships
Safety
Higher Education Trust
Customer satisfaction
% Nominations
Our
properties
Gross asset value
Asset age
Occupancy
Rental growth
Energy efficiency
People and culture
Embedded risk management culture
Openness, transparency and clear ownership of risk management
(supported by risk registers) cascades through the organisation.
PRINCIPAL RISKS AND UNCERTAINTIES continued
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Viability statement
The Directors have assessed the viability of the Group over
a three-year period to December 2026, taking account of
the Group’s current position and the potential impact of its
principal risks. The Directors consider the three-year lookout
period to be the most appropriate as this aligns with the
Group’s own strategic planning period combined with the
levels of planning certainty that can be derived from the
development pipeline.
The Directors believe that UK universities will continue to
experience strong demand from UK students as 18-year-old
demographic growth becomes increasingly favourable and
the UK’s leading Higher Education sector continues to attract
students from around the world to study in the UK. The Group
has an annual business planning process, which comprises
a Strategic Plan, a financial forecast for the current year and
a financial projection for the forthcoming three years (which
includes stress testing and scenario planning and also rolls
forwards for another two years). This plan is reviewed each
year by the Board as part of its strategy setting process. Once
approved by the Board, the plan is cascaded down across the
Group and provides a basis for setting all detailed financial
budgets and strategic actions that are subsequently used by
the Board to monitor performance. The forecast performance
outlook is also used by the Remuneration Committee to
establish the targets for both the annual and longer-term
incentive schemes.
To stress test the viability of the business, a viability scenario
was prepared using the Group’s strategic plan as a base. The
key viability assumptions were:
Rental growth reduced to 2% p.a., reflecting principal
risks 1–4.
Cost growth of 4% p.a., allowing for further sustained
increases in utility and other costs.
Yield expansion of 50bps, approximately a 10% decline
in asset values.
Interest costs of 6% on all new and refinancing activity,
reflecting principal risk 11.
No further development commitments, disposals or
acquisitions, reflecting principal risks 5 and 6.
The result of this scenario showed a significant deterioration
in forecast performance, with earnings and NTA significantly
reduced (to 46.1p and 856p respectively) in 2026 whilst leverage
increased substantially to 39%. Despite the significant contraction
in the size of the business over the forecast period, the business
would remain viable under such a scenario, with no breaches of
financial covenants.
We considered whether the Group’s climate change principal
risk would impact our assessment of the Group’s viability in-line
with principal risk 9. The business is considered viable with our
net zero carbon strategy and asset transition plans. We also
considered the conclusions of our resilience assessment in
TCFDon page 58.
Following the recent policy changes aimed at reducing
net migration, the UK is less attractive for international
postgraduate taught students who can no longer bring
dependant family members to the UK. We have limited direct
exposure to the announced changes in visa policy as the
majority of our rooms are single occupancy. With the Group
achieving 99% occupancy for the 2023/24 academic year and
astrong outlook for 2024/25, international student demand is
notexpected to impact the longer-term viability of the Group.
The financing risks of the Group are considered to have the
greatest immediate potential impact on the Group’s financial
viability. The three principal financing risks for the Group are:
Short-term debt covenant compliance.
The Group’s ability to arrange new debt/replace expiring
debt facilities.
Any adverse interest rate movements.
The Group has secured funding for the committed future
development pipeline, which includes the Unite Group and
Liberty Living unsecured loan facilities and prepares its Strategic
Plan on a fully funded basis in line with the three-year outlook
period. Disposals are an important part of our strategy with the
recycling of assets out of our portfolio generating capital to invest
in development activity and other investment opportunities.
To hedge against the potential of adverse interest rate
movements, the Group manages its exposure with a
combination of fixed rate facilities and using interest rate
swaps for its floating rate debt. During the year, the Group
has complied with all covenant requirements attached to its
financing facilities and expects to continue to do so.
The outlook and future prospects beyond the viability period
for the business remains strong, reflecting the underlying
strength of student demand, our alignment to the strongest
universities and the capabilities of our best-in-class operating
platform. There are significant growth opportunities for the
business created by the ongoing shortage of high quality and
affordable purpose-built student accommodation, universities
needing to deliver an exceptional student experience through
their accommodation and the growing awareness of the benefits
of PBSA among non-first-year students. Emerging risks to the
outlook and prospects are identified and assessed through our
broader risk management process.
Based on their assessment and the mitigating actions available,
the Directors have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as
they fall due over the period to December 2026.
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PRINCIPAL RISK
Market
1
Risk description
A reduction in demand driven by geopolitical factors.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Maintain a diverse
customer base to reduce
our exposure in key
demographic sectors
Immigration policy changes
affecting international students.
Travel restrictions placed on
international students by their
own government.
Loss of income.
Reduction in demand affecting
yield and asset values.
Government dialogue.
Ongoing monitoring of government
HEand immigration policy.
Develop markets with students in
new countries.
2
Risk description
A reduction in demand driven by macroeconomic, customer value-for-money considerations and affordability.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Maintain our property
portfolio to a high
standard to ensure
enduring relationships
with the high- and mid-
ranked universities,
andconsistently drive
salesperformance
Lack of investment in the quality
of our product offering.
Increased blended learning; more
students remain at home.
Increased regulation over rents.
London weighting on loans and
grants removed.
Loss of income.
More competition and reduced
demand for year-round student
accommodation in the long term,
resulting in lower profitability and
asset values.
Asset management of our properties,
with our Estate team working
alongside our Asset Management
team to improve the experience
forstudents.
Estate’s five-year strategy being
developed to review our portfolio
toensure we have a quality portfolio,
appropriately sized and in the
rightlocations.
3
Risk description
Increase in supply; as a maturing sector new entrants to the market will increase competition and could lead to a loss of market share.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Build and maintain a
sector leading offer for
ourcustomers
Well-funded competitors
improving their offer and service.
Unite Students fails to invest
initsbrand.
Unite Students does not keep
pace with customer expectations.
More competition for the
bestsites.
Potential impact on rental
growthand occupancy.
Reduced revenue and increased
costs associated with part-filled
accommodation.
Disciplined investment
approachtomarkets with
supply/demand imbalance.
Exposure to the best universities with
our new developments secured with
nomination agreements.
Geographically diverse portfolio.
Broad range of product and
priceofferings.
Long-term partnership arrangements
with universities.
Actively driving differentiation through
our brand investment and promises.
Differing strategies for B2C and B2B
to mitigate against the different
challenges in each market.
Summary of principal risks and uncertainties
The table that follows describes the Group’s principal risks and uncertainties, and explains how these are managed or mitigated.
PRINCIPAL RISKS AND UNCERTAINTIES continued
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PRINCIPAL RISK
Market continued
4
Risk description
Failure, or significant deterioration in performance, of a university partner.
E
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Align our portfolio and
partnerships to leading
universities, who can
demonstrate sustainable
income plans
A University partner breaches
one or more banking covenants
due to decreases in income and/
or increases in cost pressures.
Loss of confidence in the
HE sector or in a university’s
abilitytodeliver a suitable
educational experience.
Insolvency in university partner,
leading to a loss of income.
Contagion of banking concerns
leading to tighter financial
covenants within the HE sector.
Review of financial position of
keypartners using external data.
Regular conversation with
vicechancellors and key
universitystakeholders.
PRINCIPAL RISK
Operational
5
Risk description
Major health and safety (H&S) incident in a property or a development site.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Minimise the risk of
an incident that could
impact the safety of our
customers, contractors
andemployees
Catastrophic fire, flood or other
incident at a property.
Incident at construction
siteinvolving Unite
Studentsemployees or
third-party contractors.
Fatality or serious injury.
Disruption to occupation
ofbuildings.
Reputational damage and loss
of trust in Unite Students as a
reliable partner.
Business continuity plans.
Board-supervised Health & Safety
Committee in place.
Highly skilled and experienced H&S
team in place.
Leadership team is focused on H&S.
Expert external assurance on
development safety risk.
Visible leadership for safety and
wellbeing driven by our senior leaders.
Use of audits and external consultants.
Cladding programme to replace
façades where appropriate.
Asset management of our properties,
with our Estate team working
alongside our Asset Management
team to improve the condition
of our properties and ensuring
ongoingcompliance.
PRINCIPAL RISKS AND UNCERTAINTIES continued
Key
Increased  Decreased  No change
E
 Emerging
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PRINCIPAL RISK
Property
6
Risk description
Inability to secure the best sites on the right terms, at a suitable level of return on investment.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Deliver a suitable
development pipeline that
supports the future growth
of the business
Challenging planning
environment, including increased
regulation in construction design.
Land scarcity and increased
competition for the best sites.
Further increases in
borrowingcosts.
Lost revenue where schemes
are delayed while consents
areagreed.
Inability to deliver the planned
growth at a sustainable level.
Reduction in Earning per Share
and/or Net Tangible Assets.
Reputation/brand damage when
works are late/ongoing with
students in occupation.
Consult and lobby at a national and
local level to promote the benefits of
student accommodation.
Management of financial exposure to
development sites through subject-to-
planning deals which reduce up-front
costs and fees.
Comprehensive due diligence is
completed on unconditional sites
prior to purchase, including seeking a
pre-application assessment from the
relevant local authority.
Clear planning and stakeholder
consultation programme.
Using mixed-use sites strategically to
gain positive planning outcomes.
7
Risk description
Schemes are delivered late and/or over budget impacting our financial returns and damaging our reputation with students.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Deliver schemes on time
and to budget
Delays or failure to get planning.
Construction risk – build-
cost inflation due to external
marketfactors.
Construction execution risk –
delivery delays impacting labour/
materials coming from outside
the UK.
Delays in executing our
disposalsprogramme.
Climate risk – physical, regulatory
and transactional risks associated
with climate change and the
environmental impact of our
development activity.
NTA and EPS affected by deferred
schemes and/or reduced
financial returns, with cash
tiedup in development.
Reputational impact of delivering
a scheme late, leaving students
without accommodation.
Recycling our portfolio through
disposals is a critical aspect of our
development strategy and failure
to deliver planned disposals may
result in a deteriorating net debt
position and negatively impact
our ability to commit to all our
planned development pipeline.
Increases in construction costs
as we seek to reduce the carbon
intensity of our developments and
comply with building regulations.
Experienced development team with
strong track record of delivery.
Strong relationships with
constructionpartners.
Group Board approval
for commitments above a
certainthreshold.
Financial investment in schemes
carefully managed prior to grant
ofplanning.
Detailed due diligence before
siteacquisition.
Build-cost inflation regularly
appraisedand refreshed.
Mid-sized framework contractors
used and longer-term
relationshipsestablished.
Active management of our
concentration to individual
contractorsand monitoring of
theirfinancial resilience.
PRINCIPAL RISKS AND UNCERTAINTIES continued
Summary of principal risks and uncertainties continued
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PRINCIPAL RISK
People
8
Risk description
Loss of talent and capability, especially in High Performing, High Potential (HPHP) individuals and also people with specialist/industry
knowledge and contacts.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Retain a high performing
workforce with suitable
succession plans and a
focus upon Diversity,
Equality, Inclusivity,
Belonging and Wellbeing
(DEIBW) goals
Lack of leadership development.
Lack of managed succession
planning and opportunity for
career advancement.
Ad hoc or uncoordinated
trainingplans.
Lack of or poor
performancemanagement.
An insufficient pool of diverse
and capable people.
Cost-of-living crisis driving wage
inflation, inhibiting recruitment
and staff wellbeing impacts.
Changes to legislation
surrounding DEIBW.
Inability to deliver business
strategy in next five years.
High attrition rates,
increasingcosts.
Reputational impact of
not meeting diversity and
inclusiontargets.
Loss of capability and knowledge
from the business impacting on
service levels.
Increased recruitment and
wagecost.
Decreased employee
engagement and subsequent
increases in attrition rates.
Highly skilled and experienced HR
leadershipteam.
The Academy providing; training
coordination and centralised tracking
toensure consistency.
New People Performance
Frameworklaunched.
An updated General Manager
programme to ensure a best-in-class
approach across our city teams.
Culture Matters engagement
forumproviding direct feedback
fromemployees.
Talent review process for succession
planning for key roles.
Bi-annual employee engagement
survey and action plans.
PRINCIPAL RISKS AND UNCERTAINTIES continued
Key
Increased  Decreased  No change
E
 Emerging
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PRINCIPAL RISK
Sustainability (more information about our Climate and Sustainability risks is included in page 48)
9
Risk description
Failure to meet sustainability-related (environmental, social & governance) external, public commitments and regulatory and
reportingrequirements.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
To meet sustainability-
related (environmental,
social & governance)
external public
commitments and
regulatory requirements
Lack of understanding of the
commitment made and the
component parts.
Lack of awareness or
understanding of the regulatory
requirements that the Company/
USAF/LSAV is obliged to meet.
No clear plan to deliver the
required outputs.
Lack of engagement from the our
people and our student customers
on delivery of the commitments.
Further complex reporting
requirements leading to an
increasing reporting burden.
Activity, when delivered,
fails tomeet commitments’
regulatoryrequirements.
Non-compliance with regulations
– regulatory action/fines/
penalties may follow.
Brand damage with resultant
lossof revenue.
Loss of investor confidence/trust.
Increased costs as we fail to
manage the requirements
andplan ahead.
Potential reduction in Group
credit ratings.
Loss of income and reduction in
property values, if we are unable
to let a building that is EPC
non-compliant.
Formal business policies in place and
updated regularly.
Effective communication and reporting
internally, to increase engagement and
track progress, and externally, to keep
stakeholders appraised of ambition
and progress.
Ongoing stakeholder consultation
and dialogue to ensure strategy and
reporting are aligned.
Sustainability Strategy and Group
Board Sustainability Committee
wellestablished.
Governance structure in place with
clear Board oversight for climate-
related issues.
Monitor performance against
key targets and ESG ratings (SBTi
carbon targets, GRESB, CDP,
FTSE4Good,MSCI).
PRINCIPAL RISKS AND UNCERTAINTIES continued
Summary of principal risks and uncertainties continued
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PRINCIPAL RISKS AND UNCERTAINTIES continued
PRINCIPAL RISK
Sustainability continued
10
Risk description
Failure to meet external, public commitments and regulatory requirements in respect of climate and wider factors.
Failure to identify, mitigate or prepare for impact of climate-related physical and transition risks.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Mitigate and prepare for
the impact of climate-
related physical and
transition risks
Failure to prepare or adapt for
increased frequency and severity
of extreme weather events
(flooding, high winds, heatwaves).
Increasing legislative burden
(EPC Minimum Energy Efficiency
Standards, Energy Saving
Opportunity Scheme, Climate-
related Financial Disclosure
regulations, more stringent
planning requirements and
building regulations etc).
Increasing, volatile and
unpredictable energy,
carbonand water costs.
Failure to decarbonise energy
supply due to cost or availability
of renewable energy.
Failure to mitigate residual
carbon emissions due
to cost or availability of
suitable neutralisation-based
carbonoffsetting.
Failure to meet increasing
stakeholder expectations.
Insufficient prioritisation of
investment in, or action on,
climate change mitigation
andadaptation.
Supply chain risks not managed.
Damage to property.
Injury to people.
Disruption to supply chain.
Increased insurance costs.
Increased capital costs.
Potential for compensation
payments being required and
regulatory action/fines/penalties.
Brand damage with resultant loss
of revenue.
Loss of investor confidence/trust.
Asset stranding/value write-
downs; inability to dispose
of assets that do not meet
regulatory compliance standards.
Engagement with supply chain to
reduce Scope 3 supply chain emissions
and improve climate resilience.
Utilities purchasing strategy
to purchase only 100% REGO-
backed renewable electricity
that meets net zero carbon
additionalityrequirements.
Proactive asset management
andcapital investment strategy to
decarbonise portfolio, and adapt for
physical impacts of climate change.
Incident management plan/
procedures in place to react
to extreme weather incidents
efficientlyand effectively.
Active horizon scanning for new/
changes to legislation.
Governance structure in place with
clear Board oversight for climate-
related issues.
Monitor performance against
key ESGtargets (GRESB, TCFD,
FTSE4Good,MSCI), with expectations
setas to where we should be.
Adopt internal carbon price to
incentivise decarbonisation and a
neutralisation-based offsetting strategy
to mitigate residual emissions.
Developed and published our
Sustainable Construction Framework.
Key
Increased  Decreased  No change
E
 Emerging
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PRINCIPAL RISKS AND UNCERTAINTIES continued
Summary of principal risks and uncertainties continued
PRINCIPAL RISK
Technology
11
Risk description
Significant loss of personal or confidential data or disruption to the corporate systems either through cyber attack or
internal theft/error.
Falling victim to a cyber security incident, either targeted or at random.
Decreased operational capacity due to system disruption or incompatibility with new ways of working.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Maintain and enhance a
secure IT environment that
discourages attacks and
informs us when issues
have been detected and
provides us with greater
operational capacity
Threat actors attempting
to compromise systems
through social engineering,
prolonged remote attacks or
physicalaccess.
Changes to operational
design, bringing requirements
for improvements to
digitalinfrastructure.
The actions of our people; both
unintentional and intentional.
Significant loss of personal or
confidential data, or disruption
tothe corporate systems.
Reputational and/or financial
damage with increased scrutiny
including sanctions andfines.
Reduced benefits from
operational efficiencies.
Defined governance structure for
InformationSecurity.
Technical security controls aligned to
SANS CIS Critical Security Controls.
Security Operations Centre (SOC)
and Security Incident & Event
Management(SIEM).
Information Security Incident
Management procedures in place to
react to any threats identified by our
SOC &SIEM.
Full suite of awareness activities.
Agreed Information Security Strategy &
Technical Security Roadmap.
Information Security and Data
Protection policies inplace.
Scheduled Internal
Phishingcampaigns.
Mimecast intercepts potentially
harmful emails.
Monitoring of emerging cyber threats.
Programme and project-level
governance, reporting and oversight.
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PRINCIPAL RISK
Financial
12
Risk description
Inability to fund our operations efficiently and deliver our future growth plans.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Manage our balance sheet
liquidity within tolerable
levels and maintain
compliance with our
debtcovenants
Geopolitical factors influencing
market sentiment.
Reduced access to capital
markets due to external factors
e.g. global financial crisis.
Significant reduction in revenue,
or other adverse business event,
affecting the market’s perception
of Unite Students’ risk and
futureperformance.
Significant reduction in property
valuations or increase in debt.
Increased financing costs
leading to reduced profitability
and property values (through
resulting expansion of valuation
yields and lower valuations).
Possible forced sales at
belowvaluation.
Slowdown in development activity.
Breach of covenant could lead to
an event of default followed by
repayment demand.
Movements in interest rates and the
impact of different outcomes are
considered at the Treasury Committee.
Minimum hedge ratio of 75% is
defined in the COGs. Debt is fixed rate
or hedged with swaps orcaps.
Revolving Credit Facility to provide
liquidity headroom.
Treasury Committee routinely reviews
capital commitment.
Maintain good relationships
withlenders.
We manage the balance sheet ratios
defined in capital operating guidelines.
Funding strategy periodically approved
by the Board.
Monitoring of covenants across a
range of income scenarios and risks.
Increasing attention on ICR covenants,
with six-monthly monitoring.
13
Risk description
Internal controls are exploited to allow individuals to gain from asset misappropriation, fraudulent financial statements and corruption.
Objective Events that may trigger the risk Potential impact How we monitor and mitigate
Maintain adequate controls
to minimise the likelihood
of fraudulent activity
Deficiencies in control design.
Inadequate segregation of duties.
Employee disengagement
with the business or external
motivation to act contrary to
ourvalues.
Loss of assets or funds.
Significant loss of personal or
confidential data or disruption
tothe corporate systems.
Independent verification of year-end
account by our external auditors.
Internal audit programme to review
internal control of high-risk areas to
the business.
Documented segregation of duties
within IT and financial systems.
PRINCIPAL RISKS AND UNCERTAINTIES continued
The Strategic Report on pages 2–79 was approved, on 27 February 2024, by the Board and is signed on its behalf by:
Joe Lister
Chief Executive Officer
Key
Increased  Decreased  No change
E
 Emerging
79
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
CHAIR’S INTRODUCTION TO GOVERNANCE
BOARD
GOVERNANCE
OVERSEEING
STRONG
PERFORMANCE IN
A CHALLENGING
ECONOMIC
ENVIRONMENT
We continue to see increasing demand
for high-quality, purpose-built student
accommodation. Affordability and
ongoing cost-of-living pressures
continue to be key concerns for
students, parents and universities
and the Board continues to oversee
how we deliver high-quality, safe and
secure, value-for-money homes for our
customers and university partners.
Richard Huntingford
Chair
The Board and our Committees govern the business with a focus
on our three strategic objectives, balancing in-year operational
and financial performance with longer-term responsible and
sustainable performance. The Board oversees how we will
keep delivering for our customers and universities through
ongoing investment in our best-in-class operating platform.
With increasing wellbeing concerns among young people, we
introduced an enhanced Support to Stay framework in 2023. The
business was named the Student Accommodation Operator of
the Year at Property Week’s RESI Awards 2023, for a second year
running, recognising our people’s commitment to supporting
customers’ mental and physical health alongside wider diversity
and inclusion initiatives. This award comes from the hard work,
kindness and dedication of our people serving our customers
and living by our values, especially creating room for everyone
and keeping us safe. On behalf of the Board, I would like to thank
them for another excellent year.
BOARD FOCUS AREAS IN 2023
Delivering for our customers and
universities: oversight of in-year
investment in our operating platform,
with the launch of our new Support to
Stay framework, alongside longer-term
investment in our digital capabilities
and technology platform.
Responsible and resilient business:
oversight of progression in our net zero
carbon 2030 journey with the launch of
our Sustainable Construction Framework,
our roadmap to sustainable design and
construction for new developments
and refurbishments kickstarted in 2023,
as well as over £8.2million in energy-
efficient capital projects.
Attractive returns for our
shareholders: a focus on earnings,
balancing strong rental growth with
customer affordability and our university
partnerships, whilst overseeing longer-
term growth opportunities through a
sustainable development pipeline.
Safety: ensuring a safe and secure home
with a continued focus on customer
safety and wellbeing, providing access
to a 24/7 Student Wellbeing Helpline
and Digital Therapy services, alongside
completing fire safety improvements
on 16 buildings across our estate
during 2023 and plans for ourongoing
futureremediation.
Board succession planning and
diversity: CEO and CFO succession
planning alongside bringing wider
diversity to the Board.
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CHAIR’S INTRODUCTION TO GOVERNANCE continued
The Board’s focus on our second strategic objective, creating a
responsible and resilient business, continues as we implement
our Sustainability Strategy. Through the detailed work of the
Sustainability Committee, we continue to oversee progress
towards becoming net zero carbon across our operations and
developments by 2030, as well as ensuring compliance with
future energy performance certificate (EPC) requirements.
Thiswork also extends to wider social and community initiatives,
overseeing wider access to Higher Education through the Unite
Foundation and sector-leading diversity research in Higher
Education. For more detail, see Sustainability on page 48
andthe Sustainability Committee report on page120.
Alongside the Board’s focus on our customers, university
partners and being a responsible business, the Board
alsocontinued its focus on delivering attractive returns for
shareholders, carefully balancing optimal occupancy with rental
growth and affordability. These returns depend on the quality,
location and scale of our portfolio and through 2023 the Board
oversaw the delivery of 1,620 new or refurbished beds, along
with new sites in strong university locations (Nottingham,
Bristol, Stratford (London) and Glasgow), delivering long-term
growth through a sustainable development pipeline.
The safety of our customers and employees is one of our
key risks and a key governance area for the Board. In 2023,
the Board continued its focus and substantial investment
in fire safety, completing fire safety improvements on 16
buildings across our estate. The Health & Safety Committee
Report on page 123 provides more information on our
safetygovernance.
On 31 December 2023, Richard Smith stepped down as
ChiefExecutive, after 13 years with Unite Students and being
Chief Executive since 2016. Richard has played a key role in
the success and growth of Unite Students and on behalf of the
Board and everyone at Unite Students, I would like to thank
himand wish him well for thefuture.
Joe Lister was appointed as Chief Executive, having been with
Unite Students for 22 years and spending 15 years as our
ChiefFinancial Officer. Following Joe’s appointment as CEO,
Mike Burt, our Group Investment Director, was promoted
to Chief Financial Officer and joined the Board on 1 January
2024. I very much look forward to working with them in their
new roles and am confident that under Joe’s leadership, Unite
Students can continue to build on its success to date.
During 2023, we also welcomed Angela Jain to the Board as a
Non-Executive Director. Angela brings a wealth of knowledge
and understanding of young people and their changing needs,
along with wide-ranging digital, brand and communication
expertise, from her extensive experience in unscripted
television focused on younger audiences. I am delighted she
has joined the Board and look forward to working with her.
The Board continues to see increasing demand for high-
quality, purpose-built student accommodation in the cities and
with the universities where we are located. Affordability and
ongoing cost-of-living pressures continue to be key concerns
for students, parents and universities and the Board continues
to oversee how we deliver high-quality, safe and secure, value-
for-money homes for our customers and university partners.
The following pages explain how our governance has supported
the delivery of our strategy through 2023 and how it will continue
to support our growth and sustainability in the longer-term.
Richard Huntingford
Chair
27 February 2024
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BOARD OF DIRECTORS
Richard Huntingford
Chair
Richard joined the Board on
1 December 2020 and became
Chair on 1 April 2021. Richard
becameChair of the Nomination
Committee on the same date.
Relevant skills, experience
and contribution
Richard is a chartered accountant,
and has over 30 years of plc board
experience including as Chief Executive
of Chrysalis Group plc between 2000 and
2007 and as a Non-Executive Director
of Virgin Mobile Holdings (UK) plc. His
Chair roles have included Wireless Group
plc (formerly Media plc), Creston plc
and Crown Place VCT plc and Richard
iscurrently Chair of Future plc.
Richard’s proven FTSE Chair experience
and wider Non-Executive and Executive
experience helps us ensure best practice
in Board effectiveness and corporate
governance. His wealth of experience
in public company governance
and leadership, corporate finance,
investment, business development,
investor relations and media helps
us drive our strategy development
and effective engagement with our
widerstakeholders.
External appointments
Future plc (Chair)
Joe Lister was appointed Chief Executive
Officer with effect from 1 January 2024.
Joe joined Unite Students in 2002 and
was previously Chief Financial Officer
(since January 2008) and before that held
a variety of roles including Investment
Director and Corporate Finance Director.
Relevant skills, experience
and contribution
Through his various roles at Unite
Students, Joe has been integral to the
design and delivery of the Group’s
strategy, sustainable growth and financial
performance with his deep experience of
our business and thesector.
As Chief Executive, Joe now leads on
the development, implementation and
communication of the Group’s strategy
and ongoing performance.
External appointments
Helical PLC
(Non-Executive Director)
Joe Lister
Chief Executive Officer
R H SA N A R H S
Mike joined Unite Students in 2019
and became Chief Financial Officer on
1 January 2024, after working as the
Group’s Investment Director.
Relevant skills, experience
and contribution
Mike has a wealth of financial experience,
having started his career working in
corporate finance across a range of
sectors. Prior to joining Unite Students,
Mike spent 10 years as a research
analyst covering real estate companies
in the UK and on theContinent, most
recently at ExaneBNP Paribas.
Mike has a strong track record
of leadingour investor relations,
sustainability commitments, and
as amember of the Executive
team. Priortohis appointment as
Chief Financial Officer, Mike was
responsiblefor our investment
strategyand asset management.
External appointments
None
Mike Burt
Chief Financial Officer
AN SR HN
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BOARD OF DIRECTORS continued
Ross joined Unite Students in September
2017 and became the Audit Committee
Chair in January 2018.
Relevant skills, experience
and contribution
Ross is a former Chief Financial Officer
of Stagecoach Group and Non-Executive
Director of Virgin Rail Group Holdings
Limited. Ross has experience in
finance, business development and
legal, gained from his finance role at
StagecoachGroup.
Ross contributes to the Board with his
many years’ experience of managing
finance in a complex operational
business similar to our own. He also
brings valued insight to innovation as
we continue to enhance our service
offer for student customers. Ross uses
his financial and broader business
experience as Chair of the Audit & Risk
Committee, helping oversee the Unite
Group’s financial rigour and delivery.
External appointments
Institute of Chartered Accountants
ofScotland
(Business Policy Panel member)
Committee key
N
Nomination Committee member
A
Audit & Risk Committee member
R
Remuneration Committee member
H
Health & Safety Committee member
S
Sustainability Committee member
C
Committee Chair
Composition of the Board
Chair
1
Executive Directors
2
Non-Executive Directors
7
Gender diversity
40%
60%
Female
4
Male
6
Non-Executive Director
Independence
Non-Executive Directors
1
Independent Non-
Executive Directors
6
Ross Paterson
Non-Executive Director
AN R H S
Nicky joined the Board on
1 September 2022 and was
appointedSenior Independent
Directorand Chair ofthe
RemunerationCommittee with
effectfrom 1 March 2023.
Relevant skills, experience
and contribution
Nicky is a chartered accountant
and a proven business leader with
an established plc track record and
extensive experience in consumer-facing
markets, including as Chief Executive of
Hobbs between 2008 and 2014. Prior to
this, Nicky was also the Finance Director
of Marks & Spencer’s Food Division
in a career at the retailer spanning
1982–2005.
Nicky has extensive Non-Executive Director
experience, which includes chairing
remuneration and audit committees, and
as a Senior Independent Director. Nicky’s
previous board appointments include
Marshall Motor Holdings, Huntsworth
andNotcutts.
As Senior Independent Director of Unite
Group, Nicky supports the Chair in the
effective running of the Board, and as
Chair of the Remuneration Committee,
helps ensure the Executive Directors’
and broader senior leadership’s
remuneration is aligned to the long-term
sustainable success of Unite Group.
External appointments
WH Smith Plc
(Non-Executive Director)
Redrow Plc
(Senior Independent Director)
Nicky Dulieu
Senior Independent Director
AN R H S
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BOARD OF DIRECTORS continued
Ilaria del Beato
Non-Executive Director
Ilaria was appointed a Non-Executive
Director in December 2018. Ilaria is also
our Designated Non-Executive Director
for Workforce Engagement.
Relevant skills, experience
and contribution
Ilaria is CEO of Frasers Property UK,
part of Frasers Property, a global real
estate group. Ilaria was formerly CEO
of GE Capital UK, a regulated bank and
corporate lender and led GE Capital
Real Estate UK, a commercial real
estateinvestor, developer and lender.
Ilaria brings over 30 years of
experience in real estate, including asset
management, investment and lending,
to the Unite Group. This experience
is vital to the Unite Group as we
navigate the ongoingand upcoming
market uncertainties and increasing
professionalisation of the sector.
External appointments
Frasers Property UK (CEO)
Dame Shirley joined the Board in
November 2019 as a Non-Executive
Director and was appointed Chair of our
SustainabilityCommittee in June 2021.
Relevant skills, experience
and contribution
Dame Shirley has held Chair, senior
Executive and Non-Executive roles at
board level in Higher Education, health
and policing, with experience of both the
public and private sectors. She was Vice
Chancellor of Loughborough University
from 2006–2012 and was board member
at the Higher Education Funding
Council for England, the Universities
and Colleges Employers Association,
and the Healthcare Commission, as well
as a Non-Executive Director of Health
Education England, and the Norfolk,
Suffolk and Cambridgeshire Strategic
Health Authority. She was appointed
CBE in 2005 for services to education in
the NHS and in 2014 appointed DBE for
services to HigherEducation.
Dame Shirley brings her wide-ranging
and hands-on experience in the Higher
Education sector to the Board, which is
especially critical at a time of ongoing
change in the sector. As Chair of the
Sustainability Committee, Shirley helps
ensure appropriate oversight of our
Sustainability Strategy.
External appointments
Higher Education Quality Assurance
Panel for the Ministry of Education
inSingapore
Royal Anniversary Trust (Trustee)
HCA (Advisory Board member)
Thomas joined as a Non-Executive
Director in November 2019 following the
Unite Group’s acquisition of Liberty Living
from Canada Pension Plan Investment
Board (CPPIB).
Relevant skills, experience
and contribution
Thomas has been the head of CPP
Investments’ UK real estate business
since 2015 and is responsible for CPP
Investments’ entry into a number of new
real estate sectors, including student
housing, life sciences and the build-
to-rent sector. In addition to sitting on
our Board, he sits on a number of CPP
Investments’ office, retail and logistics
joint venture boards. Beyond the UK, he
is responsible for CPP Investments’ real
estate investment activity in Germany
and the CEE regions.
Thomas was previously a Vice President
in the real estate investment banking
team at Macquarie Bank and focused
on M&A transactions within the UK
andEuropean public and private real
estate companies.
He brings wide-ranging real estate
experience from the student housing
sector and wider build-to-rent sector.
Hisinternational experience is invaluable
for the Board, helping provide a wider
perspective on developments in
real estate as the Board progresses
furtheritsstrategic thinking.
External appointments
Canada Pension Plan Investment
Board (Managing Director, Head
ofReal Estate, UK)
Dame Shirley Pearce
Non-Executive Director
Thomas Jackson
Non-Executive Director
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BOARD OF DIRECTORS continued
Professor Sir Steve joined the Board on
1April 2020 and was appointed Chair
of our Health & Safety Committee in
July2020.
Relevant skills, experience
and contribution
Professor Sir Steve brings his wealth
of experience in the Higher Education
sector. He was the Vice-Chancellor and
Chief Executive of the University of
Exeter from 2002 to August 2020. Sir
Steve was the President of Universities
UK (UUK) (2009–2011), Chair of UCAS
(2012–2019), served on the boards of
UUK and the Russell Group, and was
Chair of the UUK International Policy
Network (2014–2020).
Between 2007 and 2010, he led
for Higher Education on the Prime
Minister’s National Council of Excellence
in Education, which provided advice
to government about strategy and
measures to achieve world-class
education performance for all children
and young people. Sir Steve was knighted
in 2011 for services to Higher Education
locally and nationally.
His extensive experience in the Higher
Education sector contributes to the
way the Board navigates a changing
Higher Education sector, particularly
the development of strong university
partnerships. Sir Steve Chairs our Health
& Safety Committee.
External appointments
Chair of the Liveable Exeter
PlaceBoard
Trustee for Fulbright Programme
Angela was appointed a Non-Executive
Director on 1 August 2023.
Relevant skills, experience
and contribution
Angela works in the commercial
television industry and for the past
12 years has held Senior Executive
roles at ITV. She is currently Director
ofUnscripted, UK.
Having sat on the boards of BusinessLDN
and ITN, Angela brings with her strong
insights into the broader business
community, government and
keystakeholders.
Through Angela’s experience with
younger audiences, particularly relating
to wellbeing and safeguarding, she
contributes to the Board’s better
understanding of the needs, wants
andbehaviours of Unite Students’
customer base.
External appointments
ITV (Director of Unscripted, UK)
Committee key
N
Nomination Committee member
A
Audit & Risk Committee member
R
Remuneration Committee member
H
Health & Safety Committee member
S
Sustainability Committee member
C
Committee Chair
Chris was appointed Company Secretary
and Unite Group Legal Director in 2013.
Relevant skills, experience
and contribution
Prior to Unite Students, Chris held
General Counsel roles at GE, MTV
Networks and other multinationals.
He was previously an M&A/corporate
and commercial lawyer at Clifford
Chance and Baker McKenzie. Chris uses
his general counsel and corporate/
commercial legal experience to ensure
our corporate and risk governance is
aligned with our business activity.
External appointments
The West of England
Friends Housing Society
(Board Trustee)
Professor Sir Steve Smith
Non-Executive Director
Angela Jain
Non-Executive Director
Chris Szpojnarowicz
Company Secretary
85
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
BOARD STATEMENTS
Compliance with the Code
Requirement Board statement More information
The Unite Group PLC is listed on the
London Stock Exchange and is subject to the
requirements of the UK Corporate Governance
Code 2018 (the Code). The Board is required to
apply the principles of the Code and to either
comply with the provisions of the Code or,
where it does not, explain the reasons for
non-compliance.
The Code is available at www.frc.org.uk.
The Board considers that the Company has,
throughout the year ended 31 December 2023,
applied the principles and complied with all of
the provisions set out in the Code.
Details on how the Company has applied the
principles and complied with the provisions can
be found throughout this Corporate Governance
section of the Annual Report.
The table below on page 88 details where
disclosures against the principles of the
Codecan be found in this Corporate
GovernanceReport.
Listing Rule – Board diversity
Requirement Board statement More information
In accordance with the requirements of Listing
Rule 9.8.6R(9), the Board is required to provide
a statement as to whether it has met certain
targets related to gender and ethnic diversity
atBoard level.
The Board confirm that as at 31 December 2023,
all three diversity targets were met:
1. 40% of the Board were women.
2. One of the senior Board positions
(theSenior Independent Director) was
heldbyawoman.
3. One Director was from an ethnic
minoritybackground.
More details on the Company’s compliance
with the Listing Rules relating to Board diversity
amongst the Board and Executive management
can be found on page 111.
Going concern
Requirement Board statement More information
The Board is required to confirm that Unite
Group has adequate resources to continue in
operation for the foreseeable future.
After making enquiries and having considered
forecasts and appropriate sensitivities, the
Directors have formed a judgement, at the
time of approving the financial statements, that
there is a reasonable expectation that Unite
Group has adequate resources to continue in
operational existence for the foreseeable future,
being at least 12 months from the date of these
financial statements.
More details on the Going Concern statement
can be found on page 183.
BOARD STATEMENTS
Under the UK Corporate Governance Code, the Board is required to make a
number of statements.
These statements are set out below:
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BOARD STATEMENTS continued
Viability statement
Requirement Board statement More information
The Board is required to assess the viability of
the Company taking into account the current
position and the potential impact of the principal
risks and uncertainties set out on pages 67–79.
Taking account of the Company’s current
position and principal risks, the Directors have
a reasonable expectation that Unite Group will
be able to continue in operation and meet its
liabilities as they fall due over the three-year
period to December 2026.
More details on the Viability statement can be
found on page 71.
Principal and emerging risks facing the Group
Requirement Board statement More information
The Board is required to confirm that it has
carried out a robust assessment of the principal
and emerging risks facing the Company and
include a description of these principal risks,
what procedures are in place to identify
emerging risks, and an explanation of how
theseare being managed or mitigated.
A robust assessment of the principal and
emerging risks facing the Company was
undertaken during the year, including those
arising from climate change and those that would
threaten its business model, future performance,
solvency or liquidity, together with an assessment
of the procedures to identify emerging risks.
Information around key risks and risk
management processes and how they are
beingmanaged or mitigated can be found on
pages 67–79 and on page 117 of the Audit & Risk
Committee Report.
Risk management and internal control
Requirement Board statement More information
The Board is required to monitor the Company’s
risk management and internal control systems
and, at least annually, carry out a review of
theireffectiveness.
The Board conducted a review of the
effectiveness of the internal controls, supported
by the work of the internal audit team and their
reports to the Audit & Risk Committee.
Through the Board’s governance role,
itconsidered principal risks as part of its
decision-making during 2023. See page
104 for further information.
No significant weaknesses were identified
through the course of the reviews.
Details on the systems of risk management
and internal control and the review of their
effectiveness can be found on page 117.
Fair, balanced and understandable
Requirement Board Statement More information
The Board should confirm that it considers
the Annual Report, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders to
assess the Company’s position and performance,
business model and strategy.
The Directors consider that the Annual
Report, taken as a whole, is fair, balanced
andunderstandable and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy.
See the Audit & Risk Committee Report on
pages114.
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Board leadership and Company purpose Page
A. Long-term sustainable success and contribution Pages 12–17 and 99–101
B. Purpose, values and culture Pages 89–92
C. Resources and control framework Pages 67–79 and 92
D. Engagement with shareholders and stakeholders Pages 16–17, 94–96 and 99–101
E. Workforce policies and practices Pages 16, 51 and 94–95
Division of responsibilities Page
F. Board leadership Pages 89–96
G. Board composition and responsibilities Page 97
H. Role and commitment of Non-Executive Directors Page 97
I. Board effectiveness Page 109
Composition, succession and evaluation Page
J. Board appointments, succession plans and diversity Pages 110–113
K. Board experience, skills and knowledge Pages 82–85, 97 and 110–111
L. Board evaluation Page 109
Audit, risk and internal control Page
M. Internal and external audit – independence and effectiveness Pages 117–119
N. Fair, balanced and understandable Page 116
O. Risk management and internal controls Pages 67–79 and 117
Remuneration Page
P. Remuneration policies and practices – long-term strategy and success Pages 129–162
Q. Development of policy on remuneration Pages 127, 129, 133–140
R. Judgement and discretion Pages 129, 134, 137–156
Compliance with the Code
The Company’s disclosures on its application of the
principles of the Code can be found in the table below:
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BOARD STATEMENTS continued
BOARD LEADERSHIP AND PURPOSE
The Board is responsible for establishing the Company’s purpose, strategy and values, promoting its culture,
overseeingits conduct and affairs, and for promoting the long-term sustainable success of the Company,
generatingvalue for shareholders and contributing to widersociety.
Our purpose – creating a Home for Success
The Board has defined our common purpose: creating a Home
for Success, a foundation where students can thrive. We provide
homes which are more than a space to live and where students
feel they belong to a community. Our purpose describes our
shared commitment and motivation and contributes to the delivery
of our strategic objectives by informing the development of our
business model and strategy, operating practices, approach to risk
and how we engage with our stakeholders.
How the Board leads on our purpose
Home for Success is about giving the tens of thousands of
students that come to live with us, each year from across the
world, the right foundation to enable them to achieve their goals
and ambitions. The Board oversees our service proposition and
how we provide a place where students belong and have access
to support. Our operating model provides 24/7 round-the-clock
support, 365 days a year across all our properties. During 2023,
we launched a student assistance programme providing 24/7
access to a counsellor-led triage service over the phone. This
wellbeing helpline provides a safety net for our students and
demonstrates our commitment to mental health support.
Our purpose of Home for Success, linked to our value of Doing
what’s right, led to the Board’s decision to award 2023 and 2024 pay
increases, using a tiered approach, to ensure we can give our lowest
paid employees the most meaningful support, while maintaining
our commitment to being an accredited Living Wage employer.
Good governance remains a priority and the Board supported
refreshed training for each employee across the business on key
policies, including our Code of Ethics and Whistleblowing Policy.
Our Code of Ethics sets out guidelines for employees to follow,
while our Whistleblowing Policy encourages employees to raise
any concerns in confidence. These policies and training reinforce
for our employees our commitment to always acting with
integrity and our zero tolerance of bribery and corruption.
As an established provider of choice for more than 60 UK
universities, Home for Success is also about supporting our
university partners to deliver a great student experience. Our
nomination agreements with universities cover over half of our
reservations for the 2023/24 academic year and it is through our
long-standing relationships that we have been able to secure
multi-year agreements and support additional demand. We
regularly engage with our university partners to understand
their long-term aspirations, accommodation requirements and
evolving expectations around student welfare. This means our
offer is built around the priorities of students and universities
alike. Unite Students is trusted by universities to deliver a safe
and high-quality student experience where everyone’s wellbeing
is prioritised. Our focus on our Home for Success purpose and
our support to students is demonstrated through our Support to
Stay initiative launched in 2022, which provides support to help
our students fulfil their potential despite any physical, medical or
mental health difficulties. Our student support team is focused
on creating and maintaining a supportive and productive
environment for students and we work collaboratively with
Higher Education institutions to achieve this.
With our people being at the heart of our business, the
Board’s focus on Home for Success is also about ensuring an
environment where our employees can grow, develop, succeed
and belong. The Board is driven by our commitment to develop
diverse and inclusive teams, filled with positive energy and
new ideas. We provide a range of career pathways and make
opportunities for progression available to all, and are focused on
being an employer of choice.
During 2023, we launched our dedicated General Manager
learning programme to support the development of our General
Managers and help them thrive in their roles.
How the Board monitors our culture
Our culture defines what makes Unite Students a great place
to work and a great Company to do business with, and this
forms the fundamental basis for our governance. The Board
monitors corporate culture through interaction and dialogue
with our people through our Designated Non-Executive Director
for Workforce Engagement and through regular employee
engagement surveys and site visits. The Board also meets
the wider business when visiting properties and seeing our
operations, helping ensure our values and culture are well
understood and giving our people the opportunity for frank and
open feedback and the sharing of different views. During 2023,
this included the Board visiting properties in Bristol, London and
Nottingham and meeting with the local teams, learning about
their experiences of working at Unite Students and with our
customers and university partners.
Our employee surveys help measure engagement through their
participation rates, as well as the feedback received across
the broad range of topics surveyed. Our DEIB and Wellbeing
survey helped the Board to identify areas for improvement
andfeedback on the environment which our employees want
tocreate for themselves and our customers.
Our Higher Education Trust score monitors how universities
view us and provides insight on our culture from our external
stakeholders. Our initiatives undertaken to support our values,
mentioned on pages 90–91, reflect our values-led culture.
Our values and culture
Aligning with our purpose of Home for Success, the Board has
defined our values: Creating room for everyone, Keeping us safe,
Doing what’s right and Raising the bar together. Pages 90
91
set out our values in action throughout 2023. These shape our
culture, our ambitions, the things we believe in and how we act.
They connect us and drive our behaviours. As we progress on
our journey, we do so with an enhanced commitment to Doing
what’s right. This goes beyond regulatory compliance and relates
to all aspects of the business including the impact on our people
andcommunities.
Through our Culture Matters employee forum, our employees’
voice remains front and centre, ensuring dialogue between the
Board and the wider business. The relationships built within the
forum have allowed for meaningful and open conversations with
actions taken to contribute to our Home for Success purpose.
Ilaria del Beato, our Designated Non-Executive Director for
Workforce Engagement, attends the forum meetings where she
demonstrates the commitment of the Board through supportive
and informative dialogue. Ilaria provides feedback to the Board to
inform its decision-making (more details on Ilaria’s role and activities
this year can be found on page 94). In particular, this feedback helps
inform how we develop greater gender and ethnic diversity in our
senior leadership and create a more diverse workforce.
The Board has ultimate responsibility to shareholders for all
Unite Group’s activities as well as a broader responsibility to
consider the views of other key stakeholders including our
customers, universities, employees and the communities we
operate in; as well as considering environmental and social
issues when making decisions. This responsibility is intertwined
with our purpose.
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BOARD LEADERSHIP AND PURPOSE continued
Being authentic and striving for a truly diverse and
inclusive environment
Unite Students is a business that strives to be welcoming
and inclusive to all, and where every individual is respected
and valued. We create a culture where difference is valued
so our employees and customers feel they belong. The
Board has zero tolerance for any form of discrimination
and embraces cultural diversity to provide a positive
working environment that enables everyone to be their
true selves, creating a sense of belonging foreveryone.
Our first Diversity, Equity, Inclusion, Belonging and
Wellbeing strategy, We are US, was launched in 2022.
The strategy is authentic to Unite Students and was built
after listening to and learning from employees across the
business. Our commitment to diversity, equity, inclusion,
belonging and wellbeing is an essential component of our
dedication to providing a Home for Success. We are US
sets out our strategic ambition to provide the foundation
on which we canbuild our success mindset.
Safety is at the heart of our brand and at the core
of everything we do
The Board believes we are at our best when everyone
around us is at their best. Looking after everyone’s
wellbeing, both physically and mentally, remains the
Board’s key priority. We do not take shortcuts when
it comes to health and safety, and work hard to make
our people, and the students who live with us, safe and
supported. Safety is not just something else we do, it is
part of everything we do and is woven through the entire
business and culture.
Through the Board and Health & Safety Committee’s
oversight, we carried out a comprehensive physical security
review of our entire estate to better understand the risks
and create more tailored mitigation plans. 2024 will see
the implementation of additional security improvement
measures keeping our people and the students who live
with us safe and supported.
Our values in action
12 interns joined us on a 10-week paid placement,
for our second year, taking part in the 10,000 Black
Interns programme.
Six industrial placement students joined us for
12months.
Commitment of 1% adjusted profits to social
initiatives every year, including the Unite Foundation.
228 employees took part in our Instinctive Inclusion
training, part of our Diversity, Equity, Inclusion,
Belonging and Wellbeing strategy.
Awarded the Diversity Champion Corporate Award
and International Inclusion award at the Diversity &
Inclusion Awards 2023 by Diversion.
Our values in action
A decrease in reports of injuries, diseases and
dangerous occurrence regulations (RIDDOR)
accidents, with one report in 2023 (2022: 7).
24/7 staff presence, 365 days a year across all
ofourproperties.
Launch of 24/7 wellbeing and mental health
telephone service to students through our Support
toStay framework.
Rolled out increased student welfare training across
the operational business.
Body-worn cameras available in properties.
OUR VALUES
The Board’s continued oversight of our values guides the organisation in
delivering our purpose of a Home for Success, where everyone feels they
belong, has their voice heard and is treated fairly.
Creating room
for everyone
Keeping
us safe
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BOARD LEADERSHIP AND PURPOSE continued
Always operate with a highly ethical, collaborative
and solution-driven mindset
Being a responsible business is part of our DNA. The Board
always looks to do the right thing in the right way, creating
trust for all our stakeholders and the communities we
operate in. This drives the Board’s actions and decisions,
as demonstrated by the Board’s leadership in the decision
to award our largest ever annual pay increases in January
2023, and January 2024, of 10% to the majority of our
operational team members and team leaders, to help
withthe continued cost-of-living pressures.
Continuously focused on improving the way
thingsare done
The Board’s ambition is to constantly strive to be better,
by embracing an inquisitive mindset and exploring
the potential of our people’s own development. This
means focusing on our own expertise and building on
that. We are committed to leading positive change with
sector-leading research and insight, which helps inform
us and understand what really matters to students
driving efficiency, effectiveness and a great customer
experienceevery time.
Our values in action
Commitment to net zero carbon by 2030.
Real Living Wage employer.
Gold Investor in People accreditation.
£86 million invested in replacement
ofcladding during 2023.
719 Unite Foundation scholars supported since 2012
and 344 scholars graduated.
29 Positive Impact community projects and 20 Silver
and 9 Gold Awards made.
Partnered with Streets of Growth, a youth
intervention charity.
Our values in action
Increased customer satisfaction NPS score of
+42(2022: +38).
Service improvements driven by employee and
customer feedback.
Expansion of Resident Ambassadors programme
with increased focus on diversity and inclusion.
Roll out of General Manager learning programme.
Refreshed corporate policies training, including Code
of Ethics and Whistleblowing.
Student Accommodation Operator of the Year at
Property Week’s RESI Awards 2023.
Property Week’s Alternative Team of the Year
Award2023.
Click here for more about
our culture and values.
Doing
what’s right
Raising the
bar together
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BOARD LEADERSHIP AND PURPOSE continued
Class of ‘23
During 2023, we hosted a series of Class of ‘23 events that
took place within our cities ahead of the 2023/24 academic
year. These events allowed the opportunity for employees to
discuss with senior leaders our plans and strategy to deliver on
our core purpose, Home for Success, and create opportunities
for all through our People strategy. In addition, it allowed
teams to agree local actions based on the latest surveys and
to recognise and celebrate individual and team performance
from across theyear.
Unite Live
Unite Live provides employees with an opportunity to
engage directly with our Chief Executive Officer and the senior
leadership team through an online forum. Any question can be
tabled about working at Unite Students with regular questions
relating to safety, wellbeing and diversity.
We update our people on business developments through
weekly updates from our Communications team and via a
range of platforms including the employee intranet, the Hub.
Board oversight
The Board discharges some of its responsibilities directly
and others through Committees and senior management.
Terms of Reference for the Committees are available in our
Governance Framework, published on www.unitegroup.com/
about-us/corporate-governance. To discharge their broader
responsibility effectively, the Unite Group operates in an
open, harmonious and transparent manner, ensuring open
communication between the Board and the business and
itsstakeholders.
During 2023, the Board listened and heard directly from the
leadership team, the wider business and our stakeholders.
The Board engaged with our employees and stakeholders on
the impact of the rising cost-of-living pressures, employee and
student wellbeing and support, as well as our environmental
and social impact.
The Board receives updates on business performance from
our leadership team, including the Chief Customer Officer,
Group Investment Director, Group Development Director,
Group People Director, Chief Strategy Officer, Group Safety
Director, Group Finance Director, Head of Sustainability,
HigherEducation Engagement Director and Group Legal
Director & Company Secretary (among others).
The Board is also responsible for:
Assessing, monitoring and promoting the Company’s culture,
and ensuring that this closely aligns with its purpose, values
and strategy (see page 90, Our Values).
Ensuring the necessary resources are in place for the
business to meet its strategic objectives.
Establishing workplace policies and business practices that
align with the Company’s culture and values and support its
strategy (see page 94).
Overseeing the implementation of a robust controls
framework to allow effective management of risk, with
this oversight delegated to the Audit & Risk Committee
(seepage114).
Effective succession planning for key senior personnel,
much of which is delegated to the Nomination Committee
(seepage 110).
The Board has ultimate responsibility to Unite Group’s
shareholders for all the Unite Group’s activities, as well as
a broader responsibility to consider the views of other key
stakeholders. These include our customers, universities,
employees, suppliers and the communities we operate in,
as well as considering environmental and social issues when
making decisions. All of the Board’s significant decisions are
considered having regard to Section 172 and specifically the
likely consequences of these decisions in the long term and
their impact on our stakeholders.
Pages 99–101 highlight how the Board has sought to
effectively consider and engage with our shareholders
andwiderstakeholders.
While the above summarises the key areas of Board
responsibility, it is not intended to be exhaustive.
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BOARD LEADERSHIP AND PURPOSE continued
Board Committees
The Board has delegated certain responsibilities to its Committees, as detailed on the following pages.
The terms of reference for each Committee are reviewed annually.
The current membership of each Committee of the Board is set out in the chart below:
The Nomination Committee reviews
the structure, size, composition,
skills and experience of the Board
and focuses on succession planning
withdue regard to diversity.
 Richard Huntingford
Ilaria del Beato
Nicky Dulieu
Ross Paterson
Dame Shirley Pearce
Professor Sir Steve Smith
Thomas Jackson
Angela Jain
The Health & Safety Committee
oversees the performance of the
Unite Group’s health and safety and
helps drive the Unite Group’s Safe
and Secure promise.
 Professor Sir Steve Smith
Joe Lister
Ilaria del Beato
Dame Shirley Pearce
Angela Jain
The Sustainability Committee
oversees the implementation of
the Sustainability Strategy and
helps ensure Unite Students
is a responsible, resilient and
sustainablebusiness.
 Dame Shirley Pearce
Ilaria del Beato
Joe Lister
Ross Paterson
The Audit & Risk Committee
oversees the financial reporting,
risk management and internal
controlprocedures.
 Ross Paterson
Ilaria del Beato
Nicky Dulieu
Professor Sir Steve Smith
The Remuneration Committee
determines the remuneration policy
in consultation with shareholders for
the remuneration of the Board and
the implementation of this policy.
 Nicky Dulieu
Ross Paterson
Dame Shirley Pearce
Professor Sir Steve Smith
Nomination Committee
Health & Safety Committee
Sustainability Committee
Audit & Risk Committee
Remuneration Committee
See Committee report 110 See Committee report 114 See Committee report 127
See Committee report 123 See Committee report 120
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BOARD LEADERSHIP AND PURPOSE continued
How the Board operates and stakeholder engagement
The Board has an annual operating rhythm with an
agenda of items for the forthcoming year built around our
strategic objectives. The Board’s meetings are split between
strategy (considered in light of principal and emerging risks,
opportunities and the approval of specific investments above
certain thresholds, as well as ESG and longer-term sustainability)
and routine operational, property and financial updates
(providing context for the strategic discussions as wellas
governance oversight of in-year activity).
Meetings usually take place throughout the UK or in our
operating cities, and enable the Board to meet employees and
learn about their experiences and culture at Unite Students.
Workforce engagement and the role of our Designated
Non-Executive Director
The Board has designated one of its Non-Executive
Directors (Ilaria del Beato) to help ensure the views and
concerns of the workforce are brought to the Board and
taken into account following the framework of listen,
reflect and represent. Ilaria is CEO at a real estate group
and is thus well placed to understand current challenges
faced by employees.
Her role includes:
Attending the Culture Matters forum.
Monitoring our employee engagement surveys and
actions arising.
Soliciting the views of employees on remuneration
structures and processes across the Unite Group.
Collaborating with our Group People Director and
the wider People team who also hear the views of the
workforce directly.
Providing feedback to the Board on people concerns
and the results of surveys and other liaisons.
By attending the Culture Matters forum and engaging with
people across our organisation, Ilaria is able to:
Understand the concerns of the workforce and share
these at Board meetings.
Ensure the Board, and in particular the Executive
Directors, take appropriate steps to evaluate the impact
of proposals and developments on the workforce and
consider what steps should be taken to mitigate any
adverse impact.
Ensure plans are fed back to the workforce.
We continue to consider this engagement mechanism
to be the most appropriate and effective for our Group
as it facilitates an insightful two-way dialogue between
employees and the Board. This chosen mechanism
continues to be an effective and appropriate way to
gatherfeedback from the workforce.
Meetings were held in person this year with the flexibility
ofhybrid meetings to allow for increased participation from
across the business, including senior leaders who are regularly
invited to attend meetings and present to the Board. These
meetings provide the Board, and in particular the Non-Executive
Directors, with direct and open access to leaders throughout the
Unite Group and help build a culture of openness and directness.
In addition, subject matter experts are also invited to present
to the Board to give the Directors a broader and independent
perspective and to increase knowledge anddevelopment.
Further Information
DEIB and Wellbeing strategy
95
Positive Impact programme
121
Remuneration Committee
127
The passion of the Culture
Matters forum members has
been inspirational throughout
the year, ensuring the
employee voice is heard.
Ilaria del Beato
Non-Executive Director
94
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
BOARD LEADERSHIP AND PURPOSE continued
Workforce engagement continues to shape the Board’s
decision-making and, in particular, our Diversity, Equity,
Inclusion, Belonging (DEIB) and Wellbeing strategy. Through
2023, the Board’s decisions were primarily focused on our
people as well as safety and wellbeing. Our engagement
resulted in the following:
Annual DEIB survey completed by employees to better
understand their needs and assess our progress.
The development and transformation of our People policies
including our family leave policy and menopause policy.
Introduction of a new grading framework providing
career progression pathways for our employees
acrossthebusiness.
Increased learning catalogue as part of The Academy to
helpour employees take charge of their learning journey.
The Board continued to support flexibility in our ways of
working. See more on pages 5, 16 and 101 on enhancing
thehealth and wellbeing of our employees and students.
Launch of new initiatives to support employee wellbeing,
and improve experience inside and outside the office, as
part of our DEIB and Wellbeing strategy.
The Board, through the detailed work of the Remuneration
Committee, also monitors pay and practices across the wider
workforce with the Group People Director attending these
meetings to update on workforce initiatives and offer an
employee perspective to the Committee’s deliberations.
Remuneration
CommitteeReport
127
The Board also considers diversity, equity, inclusion, belonging
and wellbeing across the workforce, by considering (among
other things) our gender and ethnic diversity throughout the
Unite Group, as well as our gender pay gap.
Investment in workforce
The Company invests in our people, conscious that we can only
deliver a home for our students, and ultimately our purpose of
Home for Success, through our people. Our people are a key
stakeholder and how we engage with them and measure this is
set out on pages 16 and 99.
The Company is a fully accredited Real Living Wage employer
and provides recognition through pay awards, annual bonuses
for all employees, Round of Applause awards and our annual
employee scheme, Stars Awards, recognising individuals and
teams. Senior leaders are eligible to participate in the Long-
Term Incentive Plan. All employees are eligible to participate
inthe Company’s SAYE scheme.
Following the launch of The Academy in 2022, employees have
access to our learning catalogue which provides employees
with a personalised and tailored learning experience to help
take charge of their learning journey. Training continues across
the business on diversity, equity, inclusion and belonging,
safety, student support, sustainability, and leadership,
including our dedicated General Manager programme.
Our corporate induction days are highly interactive and
engaging providing key information about the business, roles
andproperties so that each new joiner has everything they
need to succeed at Unite Students.
As a responsible and sustainable business, creating diverse
and engaged teams is critical to our ongoing success.
Whistleblowing programme
The Board annually reviews our whistleblowing programme and
the nature of concerns raised. Our Whistleblowing Policy, and
a clear explanation as to how employees can raise a concern in
confidence, is readily available and published on our intranet.
This includes raising a concern via an independent third-party
if someone feels this is necessary. Concerns raised are then
investigated and escalated asappropriate. The Board was
pleased to see good awareness of the whistleblowing channel
and noted that no material concerns had been raised in 2023.
95
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
BOARD LEADERSHIP AND PURPOSE continued
How we engage with our investors
The Board values effective communication with shareholders and other providers of capital to the business and welcomes
their views on the Unite Group’s approach to corporate governance. The Board creates sustainable value forour three types
ofinvestors: institutional, retail and debt.
Institutional investors Retail investors Debt investors
Investors attend our year-end and half-year
results presentations.
After the announcement of our results in
February 2023, our Executive Directors held
meetings with investors to ensure their
views were taken into consideration as we
continue to develop our strategy; to help
them understand the ongoing performance
of the business and our approach
todividends.
We held an investor property tour in
November showcasing our London
properties, Hayloft Point and Stratford
One. The tour also included our current
development properties, MeridianSquare
and Jubilee House. This propertytour
included meeting with our largestinvestors,
updating our progress around our
development pipeline and learning
more about the future expectations of
ourinvestors.
We also engage with investors throughout
the year on various aspects of environmental,
social and governancematters.
The Board is made aware of the views
of major shareholders concerning the
Company through, among other means,
regular analyst and broker briefings and
shareholder surveys. These will continue
throughout 2024. The Chair, Richard
Huntingford, also reaches out to the top
20 shareholders each year and during
2023, invited shareholder discussions with
Nicky Dulieu as Chair of the Remuneration
Committee and Ross Paterson, as Chair of
the Audit & Risk Committee. Richard also
engaged following the CEO succession
announcement in October.
Our 2023 Annual General Meeting was held
in person and allowed shareholders the
opportunity to attend and to raise questions
of the Board. In addition, shareholders were
invited to ask questions via email in advance
of the meeting.
All resolutions put to the 2023 AGM
received overwhelming support from
our shareholders. The results of voting
are available at: www.unitegroup.com/
investors/agm. There were no resolutions
with less than 80% voting in favour and
therefore, Code Provision 4 did not apply.
Our July 2023 capital raise included a retail
offer alongside a non-pre-emptive placing
to offer our retail investors the chance to
participate in the capital raise, in line with
the Pre-Emption Group Guidelines.
Further details relating to our capital raise
can be found in the Directors’ Report on
page 163.
Bond holders
Bond holders are periodically invited
to meet with senior management and
our Treasury Team to update them on
performance and business strategy. Other
discussions are held with bond holders on
specific topics as required, such as ESG and
our Sustainability Strategy.
Lenders
Regular dialogue is maintained with our
key relationship lenders, through meetings
or conference calls with our CFO and
Treasury team. Our Treasury team also
actively engages with new and potential
lenders. During 2023, engagement with
our lenders focused on addressing our
financing commitments more generally.
Credit Rating Agencies
During the year, business and financial
updates were provided by our Treasury
team to Standard & Poor’s and Moody’s.
Moody’s upgraded our investment grade
corporate rating to Baa1 with a stable
outlook and Standard & Poor’s investment
grade corporate rating remains at BBB,
upgrading to a positive outlook.
Institutional investors: c.750 Private investors: c.450 Number of listed bonds: 4
Number of equity investors: c.1,200
The Company continues to offer a scrip dividend alternative to shareholders, which enables them to opt for shares rather
than cash with no dealing costs or stamp duty. The scheme was renewed for a further three years at the 2021 Annual General
Meeting. We will be seeking renewal of the scrip dividend scheme at our 2024 AGM. Full details are available on our website.
The Company has frequent discussions with shareholders on a range of issues affecting its performance, both following the
Company’s announcements and in response to specific requests. The Company regularly seeks feedback among its shareholders,
the investor community more broadly and its wider stakeholders.
96
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
DIVISION OF RESPONSIBILITIES
Role: Chair
Richard Huntingford’s principal responsibilities are:
To establish, in conjunction with the Chief Executive,
thestrategic objectives of the Unite Group for approval
by the Board.
To organise the business of the Board.
To enhance the standing of the Company
by communicating with shareholders, the
financial community and the Unite Group’s
stakeholdersgenerally.
Role: Chief Executive
Joe Lister has responsibility for:
Establishing, in conjunction with the Chair, the strategic
objectives of the Unite Group, for approval by the Board.
Implementing the Unite Group’s business plan and
annual budget.
The overall operational and financial performance of the
Unite Group.
Role: Senior Independent Director
As Senior Independent Director, Nicky Dulieu’s principal
responsibilities are to:
Act as Chair of the Board if the Chair is conflicted.
Act as a conduit to the Board for the communication
of shareholder concerns if other channels of
communication are inappropriate.
Ensure that the Chair is provided with effective feedback
on his performance.
The terms and conditions of appointment of the Non-Executive
Directors are available for inspection at the Company’s registered
office and at the Annual General Meeting.
Time commitment
Non-Executive Directors are expected to commit approximately
20 days per annum to the business of the Unite Group. We
have reviewed the responsibilities of all Directors and are
satisfied that they can fully fulfil this commitment.
It is the Board’s policy to allow Executive Directors to accept
Directorships of other unconnected companies so long as the
time commitments do not have any detrimental impact on the
ability of the Director to fulfil his or her duties. It is considered
this will broaden and enrich the business skills of Directors.
Any such Directorships must be undertaken with prior
approval of the Board.
Composition of the Board
The composition of the Board is set out in the table on
page82–85.
The Board currently consists of the Chair, two Executive
Directors and seven Non-Executive Directors.
Richard Smith stepped down as Chief Executive and Director
effective 31 December 2023, after 13 years with Unite Students
and 8 years as Chief Executive. As announced on 5 October
2023, Joe Lister was appointed Chief Executive with effect from
1 January 2024 alongside Mike Burt’s appointment as Chief
Financial Officer with effect from the same date.
All of the Directors offer themselves for election or re-election
at the Annual General Meeting, to be convened this year on
16May 2024, in accordance with the requirements of the Code.
Brief biographies of all the Directors and their skills, experience
and contribution to the long-term sustainable success of the
Company, are set out on pages 82–85. Following the individual
performance evaluations of each of the Directors seeking
election or re-election, it is confirmed that the performance of
each of these Directors continues to be effective and that they
each demonstrate commitment to the role and add value and
relevant experience to the Board.
Independence
The Board considers six of its seven Non-Executive Directors
to be independent. Thomas Jackson is not considered to
be independent, having been nominated as a Director of
the Company by its largest shareholder Canada Pension
Plan Investment Board (CPPIB) pursuant to a Relationship
Agreement signed as part of the Liberty Living acquisition.
Accordingly, the Company meets the requirement of the Code
that at least half of the Board (excluding the Chair) is made up
of independent Non-Executive Directors. In addition, Richard
Huntingford (Chair of the Board) was considered independent
on his appointment to the role.
Roles
The Chair and the Non-Executive Directors constructively
challenge and help develop proposals on strategy, and bring
strong, independent judgement, knowledge and experience
to the Board’s deliberations. The roles of the Chair and CEO
are clearly separated. Summaries of the responsibilities of the
Chair, CEO and Senior Independent Director are set out on the
tables to the right.
97
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Richard Huntingford
Ilaria del Beato
Nicky Dulieu
Ross Paterson
Dame Shirley Pearce
Tom Jackson
Professor Sir Steve Smith
0 2 4
NED Tenure
61 3 5 7 98
Angela Jain
DIVISION OF RESPONSIBILITIES continued
Board tenure
Each of the Executive Directors has
a rolling contract of employment
with a 12-month notice period, while
Non-Executive Directors are, subject
to re-election by shareholders,
appointed to the Board for a term
of approximately three years. The
adjacent chart shows the current
tenure of the Non-Executive Directors
(rounded up to the nearestyear).
Spotlight on Angela Jain, our new
Non-Executive Director
As part of my induction, I met
with senior leaders from across
the business to understand more
about Unite Students and its Home
for Success purpose. I also met with
local teams on property tours in
Bristol and Nottingham. Through
my experience of working with the
younger generation, I’m pleased to
see that mental health is prioritised
by Unite Students and the support
offered is high quality.
Professional advice and training
Directors are given access to independent professional
advice at the Company’s expense when the Directors deem it
necessary in order for them to carry out their responsibilities.
TheDirectorsalso have regular dialogue with, and direct
access to, the advice and services of the Company Secretary,
whoensures that Board processes and good corporate
governance practices are followed.
The Board considers it important that the Committee Chairs
continue to receive sector and relevant functional training
(such as on accounting, corporate governance and Executive
remuneration reporting developments) and accordingly, the
Committee Chairs attend relevant external seminars. The
Board as a whole receives ongoing training on corporate
governance and other relevant developments.
Board induction
On appointment to the Board, each Director takes part in
a comprehensive and personalised induction programme.
This induction is also supplemented with ongoing training
throughout the year to ensure the Board is kept up to date
with key legal, regulatory and industry updates. Any Director
on appointment undertakes an induction programme
following this framework:
The business and operations of the Unite Group and the
Higher Education sector; the role of the Board and matters
reserved for its decisions; the terms of reference and
membership of Board Committees; and powers delegated to
those Committees.
The Unite Group’s corporate governance practices and
procedures and the latest financial information about the
Unite Group. The legal and regulatory responsibilities as a
Director of a listedcompany.
As part of the induction programme, they meet with key
senior leaders, so from the outset they have access to people
throughout the organisation to help them form their own
independent views on the Unite Group, its performance
and the sector we operate in. In addition, they meet with
representatives of the Company’s key advisers. Arrangements
are made for each Director to visit key locations to see our
business operations and properties first-hand and the Higher
Education institutions with which we partner.
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
SECTION 172
Statement by the Directors in accordance with Section 172(1)(a) to (f) of the
Companies Act 2006
Meeting the needs and expectations of our stakeholders is
fundamental to delivery of our purpose, creating a Home for
Success. This statement sets out how the Board of Directors
has acted to promote the success of the Company for the
benefit of the members, having regard to the interest of
stakeholders in their decision-making, as further detailed
below during the year ended 31 December 2023.
The likely consequences of any decision in the long
term and desirability to maintain a reputation for
highstandards of business conduct
Acting in the long-term interests of the business and all
our stakeholders is central to the Board’s decision-making
process and shapes the Group’s strategy. To help the Board
understand our wider stakeholder relationships and inform
the Board’s decision-making, the Board receives regular
updates from the Executive team, as well as the wider senior
leadership team. In all decision-making, the potential impact
on our stakeholders is taken into account, together with the
likely consequences of these decisions in the long term and
also the desirability of the Company maintaining a reputation
for high standards of business conduct. You can read more
about our principal decision-making on pages 104. The Board
also supported our review and refresher training on key
corporate policies across the business including our Code
ofEthics and Whistleblowing Policy.
The Board maintains oversight of the Company’s performance
and reserves specific matters for approval, including significant
new strategic initiatives and major decisions relating to capital
raising and allocation. Through measurement against long-
term objectives, the Board monitors how management is
acting in accordance with the Board’s agreed strategy and
thelong-term interests of our key stakeholders.
The interests of our employees
As a service business, providing homes for tens of thousands
of young people, who are often living away from home for
the first time, the Board recognises the importance of our
employees and the role they play in creating our Home
for Success purpose. The Board receives regular feedback
throughUnite Live sessions held with our CEO and other
members of the senior leadership team. These Unite Live
sessions enable employees to ask questions directly and
for Executive management to understand the issues that
matter most to our employees and take that into account
in their decision-making at Board level. Our commitment to
employee engagement can be seen by our regular employee
engagement surveys where we take the feedback received
andturn it into meaningful action.
Through our employee engagement forum, Culture Matters,
the Board receives regular feedback from our Non-Executive
Director for Workforce Engagement, Ilaria del Beato. Ilaria
attends the Culture Matters meetings and hears first-hand
the context and debate while demonstrating the commitment
of the Board. The Board also receives regular updates from
our Group People Director, ensuring consideration is given
to employee needs and concerns. You can read more about
Culture Matters on page 94.
The need to act fairly between members of the Company
The Board recognises that acting fairly in the interests of all
shareholders increases investor confidence, reduces our cost
of capital and ensures good governance. This also supports
the ability of the business to invest and grow through access to
capital when it is required. We provide all investors with equal
access to information through our public reporting for financial
results and trading statements, as well as additional disclosures
in areas such as sustainability through our corporate website.
Our Annual General Meeting also provides an opportunity for
all shareholders to have their say. We engage regularly with
investors at conferences and meetings, which address investor
groups from a range of markets and of differing sizes. The Chair
of the Board engages with shareholders on governance matters.
The Board had oversight of the Company’s July 2023 capital raise,
which included a retail offer alongside a non-pre-emptive placing.
As part of the capital raise, the Board considered the need to raise
capital efficiently and quickly with the desire to treat shareholders
as fairly as possible. In doing so, the Board supported efforts to
ensure that shareholders who did not participate in the placing
were given the opportunity to participate via the follow-on offer,
in line with Pre-Emption Guidelines.
Read more about employee engagement
16, 94
Read more about
shareholder engagement
96
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
SECTION 172 continued
The need to foster business relationships with our
key stakeholders including our customers, university
partners and suppliers
Our customers
Our purpose, creating a Home for Success, means we provide
more than a space to live, we provide homes where students
feel they belong to a safe community in which they can
thrive. Our regular student surveys provide opportunities
for students to provide direct and frank feedback so that we
can understand what is important to them during their time
living with us and also on wider topics. The Board reviews the
Net Promoter Score from our student surveys which help the
Board decide where to invest in customer service and property
enhancements to ensure we deliver value-for-money for
ourcustomers.
Through Board oversight and support, our buildings continue
to operate with 24/7 round-the-clock support, 365 days a
year across both frontline and management staff. We prioritise
wellbeing and the mental health support we offer customers is
sector leading. Our student support team is focused on creating
and maintaining a supportive and productive environment
for our students during their time with us. Read more in
ourHealth & Safety Committee report on page 123.
Our city teams engage with our student customers on a day-
to-day basis covering welfare issues, complemented by our
resident ambassadors, who provide peer-to-peer support
to students, and organise activities in our properties to help
foster a community.
University partners
Universities are key strategic stakeholders, directly accounting
for around half of our reservations each year under nomination
agreements and the other half indirectly through their students
who book directly with us. The reputation, health and future
growth of our university partners remains central to our
business prospects.
The Unite Group supports the growth ambitions of its
university partners through a range of different approaches
from single-year accommodation arrangements to more
strategic on-campus relationships. Through this partnering,
we can explore opportunities for new university partnerships,
where we can unlock operational efficiencies, alongside new
accommodation options.
Our Higher Education engagement team and student support
team meets regularly with UK university leaders and teams at
various levels enabling us to discuss this strategic planning as
well as day-to-day operational requirements. This feedback is
shared with our Board which in turn considers our strategies
for delivering value to universities. Our student support team
also engages and has collaborative relationships with Higher
Education institutions and provides the Board with insight into
trends and specific themes relating to student wellbeing across
the Higher Education sector.
Our annual Higher Education engagement survey provides the
Board with key insight into our reputation and performance
with our university partners as further detailed as part of
our Higher Education Trust operational KPI on page 31. This
helps inform the way we improve our product and service.
The Board is also regularly updated on trends in the Higher
Education sector in the UK and globally, which inform Unite
Group’s strategy around the universities with which it seeks
topartner over the long term.
Suppliers
We work with a wide range of suppliers across our operations
and development activities to deliver a high-quality, affordable
customer offer. Our teams maintain strong relationships
with suppliers and ensure that the contractors we use have
the right skill set and accreditations to undertake the work
in our buildings. The Board recognise the importance of
supplier relationships and is provided with regular updates
throughoutthe year.
During 2023, the Board had oversight of the development
of our Sustainable Procurement framework. This framework
sets out our plan for achieving best-in-class sustainable
procurement. Through this framework we also launched
our Supplier Code of Conduct setting out expectations in
accordance with the highest standards of business and
personal ethics.
Our sustainable procurement policy was refreshed during
the year which requires, among other things, suppliers to
have policies in place regarding the minimum legal age of
employment and compliance with local laws regarding working
hours and overtime. You can read more about our Sustainable
Procurement Framework in our stand-alone Sustainability
Report(https://www.unitegroup.com/sustainability).
Our impact on the community and the environment
Home for Success is about creating a sense of belonging and
community in our properties and beyond and we ensure
our actions have a positive impact. Through the Board’s
understanding of wider stakeholder demands, we seek to play
anactive role in local communities and build trusted, long-
term relationships with community partners. This can be seen
in our development activity where we actively engage with
local communities to ensure the design of our buildings, public
spaces and community facilities also meets their needs. The
Board’s oversight of our Sustainability Strategy on social risks
and our Positive Impact programme encourages our people
and teams to work with local stakeholders on community
impact initiatives. Engagement with local communities has
helped our people better understand sustainability and social
responsibility. 29 community impact projects received 20 Silver
and 9 Gold Positive Impact Awards made. You can read more
about our Positive Impact programme on pages 52 and 121.
As a responsible business, our wider stakeholders demand
we proactively manage environmental, social and governance
risks. The Board understand the significant contribution that
property makes to global carbon emissions and how essential
it is that we play our part in the fight against climate change.
100
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
SECTION 172 continued
Through the Sustainability Committee, the Board has oversight
of our environmental impact through continued review of our
Sustainability Strategy launched in 2021. This strategy specifies
clear targets to reduce our environmental impact over
time. In addition, our Net Zero Carbon Pathway, published
in December 2021, details our approach to reach net zero
carbonacross our operations and developments by 2030.
During the year, the Sustainability Committee oversaw the
development of our first Sustainable Construction Framework.
This framework is built upon our existing net zero carbon
pathway while also considering other impacts of our buildings
onthe environment, communities and their users.
Engagement around environmental impact comes indirectly
through feedback from investors, students, universities and
local communities, all of which is considered by the Board.
Read more about Sustainability Strategy
65
Read more about
Sustainable Construction Framework
07
Shown below we have highlighted some key decisions
demonstrating how the Board has taken Section 172
mattersinto account in decision-making.
Employee and
student wellbeing
Wellbeing is at the heart of the business and following feedback received through our employee engagement
forum, Culture Matters, the Board listened and supported the roll out of new wellbeing initiatives across the
business to help employees take ownership of their health and wellbeing. These wellbeing initiatives include
the launch of additional employee post incident support which has been vital to ensuring all employees receive
adequate and consistent support post incident.
The Board was supportive of the launch of the new Student Wellbeing Helpline which provides unlimited access
to the 24/7 confidential mental health and counselling helpline. This service also provides debt, financial and legal
information with access to cognitive behavioural therapy (CBT) and online trauma courses to support with a wide
range of issues.
Read more about Employee wellbeing
16, 95
Read more about
Support to Stay framework
05
£300m capital raise
and development
pipeline
Through consultation with a significant number of our shareholders, the Board approved a capital raise of
approximately £300 million in July 2023. Through this capital raise, the Board acted to promote the long-term
sustainable success of the Company taking into account impact on stakeholders including our customers and
suppliers. This capital raise will be used to increase our development pipeline as well as increasing investment
in our existing estate, thereby enhancing future returns to generate value for shareholders while contributing to
wider society. The successful completion of the capital raise is evidence of the strong investor support for Unite
Students and our future prospects.
Sustainable
Construction
Framework
The Board supported the launch of the Sustainable Construction Framework during 2023. Underpinned by our
Supplier Code of Conduct and sustainable procurement approach, this framework considered the needs of our
suppliers and will inform how we procure future net zero developments. It also sets out our approach to the
sustainable design and build of new PBSA.
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BOARD ACTIVITIES
Directors’
attendance
atmeetings
1. Richard Smith stepped down on 31 December 2023.
2. Ilaria del Beato was unable to attend the July 2023 Audit & Risk Committee due to a bereavement.
3. Nicky Dulieu was unable to attend the December 2023 meetings due to a bereavement.
4. Angela Jain was appointed to the Board on 1 August 2023.
5. Thomas Jackson stepped down from the Sustainability Committee in September 2023.
See Committee
report 
114
Richard Huntingford 2020 8/8 4/4
Joe Lister 2008 8/8
Richard Smith
1
2012 8/8 4/4 4/4 4/4
Ross Paterson 2017 8/8 5/5 5/5 4/4
4/4
Ilaria del Beato
2
2018 8/8 4/5 4/4 4/4 4/4
Dame Shirley Pearce 2019 8/8
5/5 4/4 4/4 4/4
Professor Sir Steve Smith 2020 8/8 5/5 5/5 4/4 4/4
Nicky Dulieu
3
2022 7/8 4/5 4/5 4/4
Angela Jain
4
2023 3/3 1/1 2/2
Thomas Jackson
5
2019 8/8 3/3
Board
Number of
meetings
8
Audit & Risk
Committee
Number of
meetings
5
Remuneration
Committee
Number of
meetings
5
Nomination
Committee
Number of
meetings
4
Health & Safety
Committee
Number of
meetings
4
Sustainability
Committee
Number of
meetings
4
See Committee
report 
127
See Committee
report  110
See Committee
report  123
See Committee
report  120
Member
since
Board
Director
102
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
BOARD ACTIVITIES continued
2023 Board activities table
Governance Strategy
Financial &
risk management People
Operational
and commercial
Setting 2023
forwardagenda
Preliminary results
and key message
review
Higher Education
update
Board & Committee
evaluation feedback
Whistleblowing
review
Terms of reference
review
Audit tender
Group strategy
review
Annual tax strategy
and tax review
Data and technology
update
Principal and
emerging risks
review
2024 budget
approval
Pay award and
bonus scheme
Workforce
engagement update
Annual General
Meeting
Share plan
approval
Build-to-rent
strategy review
People strategy &
culture update
University
partnerships update
Development post
completion review
MAY
Corporate
Governance Code
update
Interim results
Interim dividend
Principal and
emerging risks
Defence planning
Student safety
update
Culture Matters
update
JULY
DECEMBER
JANUARY
Approval of Annual
Report
Property valuer
market review
Preliminary results
Final Dividend
Remuneration
review
Business and growth
overview
FEBRUARY
IR review and
feedback
Group strategy
update
Cyber maturity
update
Succession
planning
MARCH
Sustainability
update
Public affairs
strategy
Commercial
strategy
Interims
feedback
Student support
update
Property and
investment update
Higher Education
update
University
partnerships update
SEPTEMBER
Sustainability and
Positive Impact
update
Budget 2024
themes
Customer and
operations update
NOVEMBER
103
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
BOARD ACTIVITIES continued
Board decision-making during 2023
STRATEGIC OBJECTIVE
Delivering for our
customers and universities
Board’s governance role Link to principal risk What the Board did in 2023 and its decision-making
Safety, health and wellbeing:
Governance to ensure the health,
safety, wellbeing and security of our
customers is paramount.
Throughout 2023 student support
and fire safety remained priorities.
Operational risk
Major health and safety incident in a
property or a development site.
Read more 73
The Board reviews the safety of our students, visitors and
employees, as well as contractors at our development sites,
ateach Board meeting.
Student support: the Board is committed to ensuring the
business provides the right foundation and support to help
students fulfil their potential. Through the Board’s oversight in
2023, we developed a student assistance programme as part
of our Support to Stay framework. This helpline provides our
customers with 24/7 access to a counsellor-led triage service and
supports our aim to provide a supportive living environment to
students, despite medical, physical or mental health difficulties.
Further information about our Support to Stay framework can
befound on page 5.
Fire safety: the Board and the Health & Safety Committee review
and challenge our fire safety programme, a critical part of our health
and safety strategy. The Board is committed to the business being
a leader in fire safety standards through a proactive, risk-based
approach embedded across the business and ensuring that students
and our employees are kept safe. TheBoard also oversees our
cladding remediation programme and related spending.
The Board and Health & Safety Committee review and monitor
our implementation of the requirements of the Building Safety Act
2022, which has been fully embedded into day-to-day workings of
the business.
Security: The safety of our students and employees is paramount
and through oversight of the Board and the Health & Safety
Committee, we carried out a full review of security across the entire
estate and highlighted buildings where additional security measures
were needed. Planned improvements to security will continue
into2024.
Read more in the Health & Safety Committee Report 123
Ensuring our product is affordable
and provides good value-for-money
for our customers.
Market risks
Demand reduction: driven by value-
for-money/affordability.
Read more 72
The Board reviewed analysis of the Higher Education
accommodation sector, to ensure we continue to offer an
affordable and value-for-money product.
Board analysis of our customer offer and how we service
undergraduate first-year students through lettings to universities
under nomination agreements. Also, considering the opportunities
to tailor our customer proposition to better meet the needs of
returning students seeking greater independence and postgraduate
and international students who may be willing to pay a premium for
a higher level of service.
Continued Board oversight of our pilot purpose-built build-to-
rent property in Stratford, East London to test our operational
capability to extend our accommodation offer to young
professionals and retain them as customers as they move on
tothe next stage in their lives.
Read more about Operations review 32
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BOARD ACTIVITIES continued
Board’s governance role Link to principal risk What the Board did in 2023 and its decision-making
Governance to ensure our
best-in-class operating platform
delivers for our customers and
universitypartners.
Market risks
Supply and demand.
Read more 72
Through our direct engagement with VCs and other levels of
management within universities, the Board is able to take into
account the views of these stakeholders as well as monitoring
and measuring our performance.
Board oversight that our operating platform and our customer
facing operational apps (such as the MyUnite app) deliver:
A robust booking system.
An improved and scalable platform for revenue management
and customer engagement.
Enhanced service levels for both universities and students.
Competitive advantage.
Read more about Operations review
32
Read more about Stakeholder engagement
16, 99
Ensuring our safe and secure
promise extends to keeping our
customers’ and employees’ personal
data safe and secure.
Technology risk
Information security
andcyberthreat.
Read more 78
The Board reviewed the effectiveness and risks surrounding our
technology and information security and itsgovernance.
The Board received regular updates from management on
the progression of the technology upgrade project and on the
Company’s maturity in cyber security.
STRATEGIC OBJECTIVE
Delivering for our
customers and universities continued
105
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
BOARD ACTIVITIES continued
Board’s governance role Link to principal risk What the Board did in 2023 and its decision-making
Sustainability and ESG:
As a listed plc and responsible
trusted business, our wider
stakeholders demand we
proactively manage environmental,
social and governance risks. The
Board oversees the setting and
implementation of our Sustainability
Strategy, which has the overarching
ambition for Unite Students to lead
the living sector on sustainability
issues and be in the leading group
ofreal estate companies in the
widersector.
Sustainability/ESG risk
Failure to meet sustainability
related reporting requirements
andstakeholder expectations.
Read more 76
The Board continued its oversight of our Sustainability Strategy
and Net Zero Carbon Pathway, built on science-based targets
validated by the SBTi, to achieve our objective of becoming
net zero carbon across both the Company’s operations and
development activities by 2030. Further information can be
foundin our stand-alone Sustainability Report.
The Board has remained up to date with ongoing ESG regulatory
and reporting requirements and has met with management to
receive updates on compliance; providing appropriate challenge
to ensure we meet our obligations.
The Board considered the Board’s specific climate change risks,
identifying them across: Regulatory risk; Physical risk; Transition
risk; and Stakeholder risk. The Board considered the impact of
these risks and oversees the assurance of the corresponding
riskmanagement.
The Board oversaw the Unite Group’s launch of the Sustainable
Procurement Framework in early 2023. This framework included
arefreshed Sustainable procurement policy which requires,
among other things, suppliers to have policies in place regarding
the minimum legal age of employment and compliance with
locallaws regarding working hours and overtime.
In addition the Board also had oversight of the launch of our
Sustainable Construction Framework which will inform how we
procure future net zero developments.
Fire safety:
Proactive Board oversight of
improvements in fire safety and
demonstrating leadership on
cladding remediation.
Operational risk
Major health and safety incident in
aproperty or a development site.
Read more 73
The Board continue to oversee the cladding remediation
programme and the progress against its delivery.
The Board continues to have oversight of the works being
undertaken in respect of fire safety.
Employee wellbeing:
Governance to ensure the health,
safety, wellbeing and security of our
employees is paramount.
People risks
Loss of talent and capability.
Keeping pace with changes required
to ensure we meet our DEIBW goals.
Read more 75
Ilaria del Beato remains the Board’s Designated Non-Executive
Director for Workforce Engagement to help ensure the views and
concerns of the workforce are brought to the Board and taken
into account.
Through our Culture Matters forum, the Board monitors
employee engagement and issues which are important to
ouremployees.
The Board also has oversight of our Diversity, Equity, Inclusion,
Belonging (DEIB) and Wellbeing strategy and progress
againstobjectives.
Read more about employee wellbeing and DEIB
initiatives under Workforce engagement
94
Diversity, equity and inclusion:
The Board monitors progress
against our value, Creating room
foreveryone.
Higher Education
GovernmentPolicy:
Continued focus on potential
Higher Education Government
Policychanges.
Market risk
Supply and demand.
Read more 72
Ongoing Board monitoring of Higher Education Government
Policy and its impact for PBSA and universities more widely.
STRATEGIC OBJECTIVE
A responsible and
resilient business
Board decision-making during 2023 continued
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BOARD ACTIVITIES continued
Board’s governance role Link to principal risk What the Board did in 2023 and its decision-making
Covenant compliance:
Group Board oversight of our
Covenant compliance under
debtfacilities.
Financing risk
Failure to comply with
contractedCovenants.
Read more 79
The Board monitors Covenants’ compliance across a range of
income/stress scenarios to ensure that if any risks emerge, the
Board is ready to identify further action and work with lenders
well in advance.
Covenant compliance also has oversight in the Audit & Risk
Committee and by the external audit review of our Covenant
compliance through the Going Concern process.
Read more in the Financial review
41
Capital structure:
Unite Group Board focus on a strong
and flexible capital structure, which
can adapt to market conditions,
and reduce and diversify the cost
offunding.
Financing risk
The increasing cost of debt and
being unable to obtain funding at
acost that is within our risk appetite.
Read more 79
Board oversight of our capital structure, including the £600
million sustainability-linked unsecured revolving credit facility.
The Board approved the £300 million capital raise in July 2023
which received strong investor support. The proceeds will be
used to grow our committed pipeline and increase investment
into our existing estate through asset management projects to
enhance future returns.
Read more in the Financial review
41
Leadership development and
succession planning/talent pipeline
Retain a high performing workforce
with suitable succession plans
and a focus upon diversity,
equality, inclusivity, belonging and
wellbeinggoals.
People risk
Lack of strategic leadership
capabilityto deliver a challenging
business strategy.
Read more 75
The Nomination Committee focused on Board succession
anddiversity, as well as our wider leadership talent pipeline
anddevelopment.
The Board approved the appointment of Angela Jain as
Non-Executive Director with effect from 1 August 2023.
Joe Lister was appointed as Chief Executive Officer replacing
Richard Smith who stepped down with effect from 31 December
2023. Mike Burt was also appointed as Chief Financial Officer from
1 January 2024.
Read more about succession planning/
talent pipeline
110
STRATEGIC OBJECTIVE
A responsible and
resilient business continued
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BOARD ACTIVITIES continued
Board decision-making during 2023 continued
Board’s governance role Link to principal risk What the Board did in 2023 and its decision-making
Property/development pipeline:
Board scrutiny of city and site
selection for new developments
against a backdrop of increasing
competition for the best sites.
Governance of developments/
acquisitions to ensure they run
to budget and schedule and are
accretive to shareholder returns.
Property/development risk
Inability to secure the best sites on
the right terms, at a suitable level
ofreturn on investment.
Read more 74
Board oversight of:
1. Delivery of our new 2023 property: 705-bed Morriss House
inNottingham, with a total development cost of £57 million.
2. The £24 million refurbishment of three existing properties
inLondon, Birmingham and Edinburgh.
3. Progress with the purchase of a new 800-bed property
in central Glasgow, adding to our already 3,000-bed
portfoliointhe city.
4. Approval of the build contract to develop a new 596-bed
property at the heart of Bristol’s biggest-ever regeneration
project, Temple Quarter.
Read more about
development and partnership activity
36
Disposals:
Board governance of our capital
recycling as we seek to increase
our exposure to the UK’s best
universities, while generating
capital to invest in further
developmentactivity.
Property/development risk
Read more 74
Board oversight and monitoring of disposal activity to enhance
our overall portfolio quality and fund reinvestment.
Dividend Policy:
Board governance role in framing
ofour DividendPolicy.
Financing risk
Unable to renew or secure debt
funding to meet committed business
plans and having to cut dividends.
Read more 79
Board approval for recommended dividend payments, based on
a target payout ratio of 80% of adjusted EPS.
STRATEGIC OBJECTIVE
Attractive returns
for shareholders
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BOARD ACTIVITIES continued
2023 effectiveness review
Each year the Board, its Committees and Directors are
evaluated, considering (among other things) the balance
of skills, experience, independence and knowledge on the
Board, its diversity (including gender and ethnicity), how
it works together as a unit and other factors relevant to
its effectiveness. The Company’s policy is to conduct an
externallyfacilitated evaluation every third year. During 2023,
theevaluation was conducted by Independent Audit Limited
(whohave no other connection to the business or Directors).
Board and Committee effectiveness review
The Board and its Committees completed an anonymous
online questionnaire using Thinking Board
®
, provided by
Independent Audit Limited that addressed a broad range of
issues and which enabled the Board to provide comments on a
range of matters. The questions covered Board and Committee
performance, culture, the content and scope of topics covered
at Board and Committee meetings, the nature and dynamics of
Director contributions at meetings and Chair of the meetings.
Thequestions set were consistent with previous years to
provide comparative results. Independent Audit Limited
conducted follow up interviews with each member of the
Board and Company Secretary in addition to observing a Board
meeting during Q3. The conclusions were discussed by the
Board and each Committee at their meetings in Q4 of 2023.
Conclusion from this year’s Board and
Committeeeffectiveness review
The general conclusion was that the Board and its Committees
have many strengths and work hard to ensure oversight and
governance responsibilities are fulfilled. Key areas of strength
included the range of skills, experience and thinking styles
of the Non-Executive Directors to challenge and support the
Executive team. The consensus from the Directors’ assessment
of themselves is that the Board is effectively developing
and reviewing its wider business strategy while considering
stakeholders and incorporating ESG into the Board’s strategic
decision-making. The Board’s decision-making continues to
align with our Purpose and Values. The Directors believe that
the Board fulfils its role relating to strategy, risk, governance
and oversight of operational and financial performance well.
The key areas where there are opportunities for further
developmentinclude:
Develop a better understanding of how technology is
enabling our strategy.
A better understanding of the challenges posed by
IT security, particularly regarding cyber risks and
mitigationsinplace.
More opportunities for the Board to meet the wider
business and oversee the culture at Unite Students.
The Board and each of its Committees reviewed the suggestions
and outcomes of the Board evaluation and have developed an
implementation plan. No changes to the Board are anticipated
following this effectiveness review.
Progress against the 2022 Board evaluation recommendations
2022 Board evaluation recommendations 2023 Progress against these recommendations
1. Create more opportunities for the Board to have more informal time
together, as well as more opportunities to meet the wider leadership
team and hear from lower levels of management.
The Board were able to meet regularly in our operating cities and
will continue to do so into 2024. During 2023, members of the wider
leadership team were invited to spend informal time with the Board
outside of meetings.
2. Improve the Board’s understanding of technological shifts and its
impact for our customers.
Strategy and growth opportunities were regularly discussed in the
Board during 2023. In addition, a detailed tech review and update was
presented to the Board including an exploration of technological shifts
and its impact for our customers.
3. Improve Board awareness of our cyber-attack readiness and our
overall IT security.
Our risk management framework, which includes our information
security risk, is regularly discussed and reviewed in our Audit & Risk
Committee. We also considered our principal risks in the Board which
include our information security and data protection risk.
4. A better understanding of our people issues and data for improved
organisational insight.
People strategy and People data were regularly discussed in Board
and Committee meetings and a wider People strategy update was
presented to the Board during 2023.
In addition, improved People data has been available to the Board since
early 2023.
5. More time to discuss our Board composition and succession planning. The Board and Nomination Committee held dedicated succession
planning and talent mapping sessions throughout the year, including
insights into key People data, our culture and values.
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
NOMINATION COMMITTEE
PEOPLE
GOVERNANCE
Nomination Committee Chair’s overview
The Committee is focused on succession planning, with
an emphasis on Executive succession planning, our talent
and leadership development and growing the diversity of
theBoard and Executive management.
Composition
The Committee consists of all the Non-Executive Directors
including Angela Jain, who joined the Board as a
Non-Executive Director on 1 August 2023.
Role of the Nomination Committee
The role of the Committee is to:
Ensure that appropriate procedures are adopted and
followed in the nomination, selection, training, evaluation
and re-election of Directors and for succession planning,
with due regard in all cases to the benefits of diversity on
the Board, including gender and ethnicity.
Regularly review the structure, size, composition, skills and
experience of the Board and to make recommendations
with regard to any adjustments considered necessary.
When it is agreed that an appointment to the Board should
be made, lead a selection process that is formal, rigorous
and transparent.
Be responsible for identifying, reviewing and recommending
candidates for appointment to the Board.
Board succession planning for Executive
roles was an ongoing focus for the
Committee during the year, to ensure a
deep, diverse and inclusive talent pipeline
for future Board appointments. The Board
also recognises that diversity and inclusion
is fundamental to the culture of the Group,
our purpose of Home for Success and
ultimately our long-term sustainability.
Richard Huntingford
Chair
Succession planning and
diversity continue as the
Committee’s primary focus.
Committee membership
Richard Huntingford
Chair of the Nomination Committee
Nicky Dulieu
Senior Independent Director
Ross Paterson
Non-Executive Director
Ilaria del Beato
Non-Executive Director
Dame Shirley Pearce
Non-Executive Director
Thomas Jackson
Non-Executive Director
Professor Sir Steve Smith
Non-Executive Director
Angela Jain
Non-Executive Director
Number
of meetings
4
Attendance
See page 102
At the invitation of the Committee, other people
maybe invited to attend meetings of the Committee
if considered desirable in assisting the Committee in
fulfilling its role.
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NOMINATION COMMITTEE continued
Review of Board composition andsuccessionplanning
At the start of 2023, the Nomination Committee started a search
for a new Non-Executive Director with assistance froman
external search consultancy, MWM Consulting. Asidefrom its
involvement in other Director and succession search processes
(including that of Nicky Dulieu in 2022), MWM Consulting has no
other connection with the Company or any individual Directors
and is a signatory to the Enhanced Voluntary Code of Conduct
for Executive Search Firms. Following an extensive search, Angela
Jain was appointed asa Non-Executive Director on 1 August
2023. Angela brings a wealth of knowledge and understanding
of young people, along with wide ranging digital, brand and
communication expertise, from her extensive experience in
unscripted television focused on younger audiences. Angela’s
appointment also supports the development of a more diverse
pipeline at Board level. Iam delighted she hasjoined the Board
and look forward to working with her.
Board succession planning for Executive roles was also
anongoing focus for the Committee during the year,
toensureadeep, diverse and inclusive talent pipeline for
future Board appointments. The Committee was supported
by independent consultants, MWM Consulting and Redgrave
Partners, in its succession planning. Redgrave Partners has no
other connection with the Company or any individual Directors
and is a signatory to the Voluntary Code of Conduct for Executive
Search Firms.
Following Richard Smith’s decision to step down as Chief
Executive Officer, the Nominations Committee proposed
the Board appoint Joe Lister as Chief Executive, effective
1January2024. The Nomination Committee and Board regarded
him as an outstanding candidate ideally equipped to lead the
Company as it continues to execute on its proven strategy
anddeliver high-quality growth.
Following Joe’s appointment as Chief Executive Officer, MikeBurt,
Group Investment Director, was promoted to Chief Financial
Officer, also effective 1January2024.
With the addition of Angela Jain and the changes to
ChiefExecutive and Chief Financial Officer, the Committee
believes the Board currently has the correct balance of
skills,experience, independence and knowledge.
The Committee will continue to oversee our talent mapping
to ensure we are growing and nurturing our talent and
developing our high-performers’ potential. Our diversity
andinclusivity initiatives (outlined below) are aligned with
thissuccessionplanning.
Diversity and inclusion
The Board recognises that diversity and inclusion is
fundamental to the culture of the Group, our purpose of
Homefor Success and ultimately our long-term sustainability.
With employees a key stakeholder and at the heart of our
business, the Board’s focus is on creating a workplace where
people feel they belong and can bring their whole and true
selves into the workplace. Our values recognise this, especially
Creating room for everyone.
The Board continues to oversee the development and growth
of our Culture Matters forum to ensure the employee voice
is front and centre in supporting the shaping of our People
strategy and consulting on strategic change. Through listening
and learning from across the business, we launched our first
Diversity, Equity, Inclusion, Belonging and Wellbeing strategy,
We are US, in 2022. This strategy is authentic to the business
and recognises our responsibility to create healthier and
happier workplaces.
Board Diversity Policy
The Board and Nomination Committee drive the agenda
fordiversity across the business. We are making progress,
butrecognise we still need to do more.
The objectives of the Board’s Diversity Policy are to ensure
thatBoard and Committees of the Board appointments:
(a) Are made on merit and relevant experience, while taking
into account the broadest definition of diversity (which
includes factors such as ethnicity, sexual orientation,
disability and socio-economic background, as well as age,
gender, education and professional background).
(b) Ensure Unite Group has, on an ongoing basis, the most
effective Board and leadership team to operate the
business for thebenefit of all its stakeholders.
The Committee ensures that when recommending Board
appointments, the retained search firm places an emphasis on
putting forward candidates who would enhance the overall
diversity of the Board, and seeks to appoint search firms that
are signatories tothe Enhanced Voluntary Code of Conduct for
Executive Search Firms where practicable. On an ongoing basis,
the Committee keeps under review the tenure and experience
ofthe Executive and Non-Executive Directors to ensure the
Board, and the respective Committees, has an appropriate
anddiverse mix of skills, experience, knowledge and diversity.
We made further progress on implementing the Board
Diversity Policy during the year. As described above, Angela
wasappointed to the Board on 1 August 2023 and we are
delighted to have met all three of the Board diversity targets
setout in the UK Listing Rules for the first time this year:
40% of the Board are women.
One of the senior positions on the Board (SID) is held by
a woman.
We have one Director from a minority ethnic background.
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Board and senior leadership diversity
The Company reports our Board and Executive management diversity data, as at 31 December 2023, in accordance with the UK
Listing Rule targets and associated disclosurerequirements.
The Board is fully committed to ensuring diversity at all levels of the Company and as at 31 December 2023, has complied
with the Parker Review’s recommendation that each FTSE 250 board should have at least one Director from a minority ethnic
background by 2024. The Board continues to review its composition on an ongoing basis and, in line with the Parker Review,
hascommitted to a target of 10% ethnic minority representation in senior management by 2025, ahead of the main 2027 target.
Approach to data collection
Gender and ethnicity data for the Board and Executive management is collected on an annual basis through a standardised
process managed by the Company Secretary.
Each Director and member of the Executive management team is asked to complete a standard form questionnaire on a
confidential and voluntary basis, through which the individual self-reports on their ethnicity and gender identity (or can specify
thatthey do not wish to provide such data). The criteria of the questionnaire are aligned to the definitions specified in the UK
Listing Rules and set out in the tables above:
Self-reported gender identity – selection from (a) male, (b) female or (c) not specified/prefer not to say.
Self-reported ethnicity – selection from (a) White British or other White (including minority-White groups), (b) mixed/multiple
ethnic groups, (c) Asian/Asian British, (d) Black/African/Caribbean/Black British, (e) other ethnic group, including Arab or (f)
notspecified/prefer not to say.
The Company’s approach to data collection is consistent for the purposes of all diversity-related reporting requirements under
the Listing Rules and across all individuals in relation to whom data is being reported.
NOMINATION COMMITTEE continued
Gender identity and ethnicity as at 31 December 2023
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board
(CEO, CFO, SID
andChair)
Number in
Executive
management
Percentage
of Executive
management
Men 6 60% 3 6 75%
Women 4 40%
1 2 25%
Not specified/prefer not to say 0 0% 0 0 0
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board
(CEO, CFO, SID
andChair)
Number in
Executive
management
Percentage
of Executive
management
White British or other White
(includingminority-White groups) 9 90% 4 7 90%
Mixed/Multiple ethnic groups 0 0% 0 0 0%
Asian/Asian British 1 10% 0 1 10%
Black/African/Caribbean/Black
British 0 0%
0 0 0%
Other ethnic group, including Arab 0 0%
0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
112
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Gender diversity for the purposes of the UKCorporate
Governance Code
Gender diversity
Female
Male
11
24
31.4%
68.6%
As of 31 December 2023, the number of women in the
Executive Committee and their direct reports (including
theCompany Secretary as required by the Code) was 11
(outofatotal of 35) representing 31.4% of this Group.
Male Female Total
Executive Committee
and Company Secretary 6 2 8
Direct reports 18 9 27
Total 24 11 35
Total (%) 68.6% 31.4% 100%
In addition, the Committee will continue its focus on delivering
diversity for the wider business to help the Company develop
adeep and diverse succession plan at more senior levels
within the organisation.
Richard Huntingford
Chair of the Nomination Committee
27 February 2024
NOMINATION COMMITTEE continued
113
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AUDIT & RISK COMMITTEE
FINANCIAL
GOVERNANCE
Audit & Risk Committee Chair’s overview
During the year, the Audit & Risk Committee continued its
key oversight role for the Board with its specific duties as
set out in its terms of reference to reassure shareholders
that their interests are properly protected in respect of
the Group’s financial management andreporting.
The Audit & Risk Committee works to a structured
programme of activities, with agenda items focused to
coincide with key events in the annual financial reporting
cycle. The Audit & Risk Committee reports regularly to the
Board on its work.
During the year, the Audit & Risk Committee has continued
to monitor the integrity of the Group’s financial statements
and supported the Board with its ongoing monitoring of the
Group’s risk management and internal control systems in line
with the requirements under the UK Corporate Governance
Code. The Audit & Risk Committee determined the focus of
the Group’s internal audit activity, reviewed findings, and
verified that management was appropriately implementing
recommendations. The Audit & Risk Committee also challenged
the approach to assessing the Group’s ability to continue
as a going concern and its loan covenant compliance, by
reviewing various scenarios for futureperformance.
During 2023, the Committee continued
to focus on the quality and integrity of
the financial statements alongside its
oversight of risk and internal controls.
TheCommittee also ran a tender process
for the Group’s external auditor.
Ross Paterson
Chair
The Audit & Risk Committee
provides oversight for the
Board in respect of the
Group’s financial reporting
process, the audit process, the
system of internal controls,
and the identification
and management of
significantrisks.
Committee membership
Ross Paterson
Chair of the Audit & Risk Committee
Ilaria del Beato
Non-Executive Director
Nicky Dulieu
Non-Executive Director
Professor Sir Steve Smith
Non-Executive Director
Number
of meetings
5
Attendance
See page 102
1 14
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
AUDIT & RISK COMMITTEE continued
The Audit & Risk Committee undertook a review of its
effectiveness in August 2023. The review found that the Audit
&Risk Committee is working effectively. The review identified
areas in which we can strengthen our performance and these
are reflected in the Committee’s priorities for 2024.
During 2023, the Audit & Risk Committee undertook a full
evaluation exercise of the Deloitte audit approach to ascertain
the effectiveness of the external audit function. Further to the
completion of the evaluation of the external audit process, we
are satisfied with both the auditor’s independence and audit
approach and have recommended to the Board that Deloitte
be reappointed as auditor in 2024.
At the conclusion of the 2024 audit cycle, Deloitte will have
been the Group’s auditor for 10 years and as such, at that time
we would be required to re-tender the audit. After consulting
with external auditors, management was advised that resource
in the market was stretched and that it would be good practice
to run the tender process in 2023, allowing sufficient time for
a smooth transition to new auditors, should one be required.
The Audit & Risk Committee considered this and agreed with
management to run the process in the latter half of 2023. The
tender process concluded in December 2023 and the Audit &
Risk Committee recommended both Deloitte and another firm
to the Board as potential auditors, with a justified preference
to reappoint Deloitte as the Group Auditors with effect from
1January 2025.
Oversight of internal audit and risk management is insourced.
Whilst internal, we still consider the team to be independent of
management with a direct line of communication to the Audit
& Risk Committee. As is usual with an internal team, there are
still areas where it is appropriate to engage third parties to
undertake specific pieces of work. A third-party was engaged
toundertake an assessment over cyber security in 2023.
As noted in this Corporate Governance statement, the Board
delegates certain duties, responsibilities and powers to the
Audit & Risk Committee, so that these can receive suitably
focused attention. However, the Audit & Risk Committee
acts on behalf of the full Board, and the matters reviewed
and managed by the Audit & Risk Committee remain the
responsibility of the Directors as a whole.
Role of the Audit & Risk Committee
The Audit & Risk Committee has delegated authority from the
Board set out in its written terms of reference. The terms of
reference for the Audit & Risk Committee take into account
the requirements of the Code and are available for inspection
at the registered office, at the Annual General Meeting and on
the Group website at http://www.unitegroup.com/about-us/
corporate-governance.
The key objectives of the Audit & Risk Committee are:
To provide effective governance and control over the
integrity of the Group’s financial reporting and review
significant financial reporting judgements.
To support the Board with its ongoing monitoring of the
effectiveness of the Group’s system of internal controls
andrisk management systems.
To monitor the effectiveness of the Group’s internal audit
function and review its material findings.
To oversee the relationship with the external auditor,
including making recommendations to the Board in relation
tothe appointment of the external auditor and monitoring
the external auditor’s objectivity and independence.
Composition of the Audit & Risk Committee
The members of the Audit & Risk Committee are set out on page
93 of this Corporate Governance statement. The Audit & Risk
Committee members are all independent Non-Executives and
have been selected with the aim of providing the wide range
of financial and commercial expertise necessary to fulfil the
Audit & Risk Committee’s duties. The Board considers that as a
chartered accountant and former Chief Financial Officer of a UK-
listed company, I have recent and relevant financial experience
and that the Committee as a whole has competence relevant
tothe sector.
Audit & Risk Committee meetings
The full Audit & Risk Committee met five times during the year
and attendance at those meetings is shown on page 102 of this
Corporate Governance statement. In addition, a sub-Committee
of the Audit & Risk Committee met separately to consider the bids
of audit firms that took part in the audit tender and to make a
recommendation to the Board over whom to appoint as Group
auditors with effect 1 January 2025. Meetings are scheduled to
coincide with key dates in the financial reporting cycle and a
forward agenda is agreed by the Committee and reviewed on
an ongoing basis.
During 2023, at my invitation, meetings were attended by
the Chair of the Board, the Chief Financial Officer, the Group
Investment Director, the Group Finance Director, and the
Group Risk & Assurance Director. I also invite our external
auditor, Deloitte, to all meetings, with an exception this year,
when the Committee met to discuss the audit tender. The
Audit & Risk Committee regularly meets separately with
Deloitte without others being present. Deloitte meets the
Group Risk & Assurance Director to receive an update on any
audit findings and how risks are being managed; Deloitte
considers the impact of these on its approach to its work.
Main activities of the Audit & Risk Committee during
theyear
Meetings of the Audit & Risk Committee generally take place
just prior to a Group Board meeting and I report to the Board,
as part of a separate agenda item, on the activity of the Audit &
Risk Committee and matters of particular relevance to the Board
in the conduct of its work. At its five meetings during the year,
the Audit & Risk Committee focused on the followingactivities.
The Audit & Risk Committee reviewed the half-year and annual
financial statements and the significant financial reporting
judgements. As part of this review, the Audit & Risk Committee
supported the Board by reviewing the financial viability and the
basis for preparing the accounts on a going concern basis. This
included challenging forecast cash headroom and reviewing
scenarios, which were determined by management, to stress test
the impact of a range of performance outcomes upon the viability
of the business, in particular with regard to loan covenants.
The Audit & Risk Committee also reviewed and challenged the
external auditor’s report on these financial statements.
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As discussed above, the effectiveness of the external
audit function was considered during 2023. During the
evaluationprocess, the Audit & Risk Committee considered:
the independence and objectivity of the external auditor; the
make-up and quality of the audit team; the proposed audit
approach and the scope of the audit; the execution of the audit
and the quality of the audit report to the shareholders; as well
as the fee structure.
The Audit & Risk Committee discussed reports from Group
Risk & Assurance and its audit and assessment of the control
environment. The Committee reviewed and proposed areas of
focus for the internal audit programme to review including the
approach to ensure that the internal audit activity continues to
be aligned to the principal Group risks.
The Audit & Risk Committee has continued to monitor and
consider developments in corporate governance and reporting
regulations. The Group has continued to make enhancements
to its corporate governance, including in respect of reporting on
internal controls, and welcomed the publication of the Corporate
Governance Code 2024 on 22 January 2024 and the further
guidance that was published on 29 January 2024. The Committee
has considered the new IFRS Sustainability Disclosure Standards
which, based on FCA guidance will become effective for UK
companies for reporting periods from 1 January 2025. Work
is underway to ensure the Group appropriately applies these
within the required timescale. The Audit & Risk Committee will
continue to review the potential impact of developments in
corporate governance and reporting regulations on the Group
with management. A dedicated Audit & Risk Committee meeting
focused on this area of potential change was held on 9 October
2023, where further detail was provided by experts from Deloitte.
The Audit & Risk Committee, supported by the finance
management team, ran a tender process for the external
audit. The tender process concluded in December 2023 and
the Audit & Risk Committee recommended both Deloitte and
another firm to the Board as potential auditors, with a justified
preference to reappoint Deloitte as the Group auditors with
effect from 1January 2025.
Financial reporting
The primary focus of the Audit & Risk Committee, in relation to
financial reporting in respect of the year ended 31 December
2023, was to review with both management and the external
auditor the appropriateness of the half-year and annual
financial statements concentrating on:
The quality and acceptability of accounting policies
andpractices.
The clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance
reporting requirements.
Material areas in which significant judgements have been
applied or where there has been discussion with the
external auditor.
Whether the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess
the Group’s position and performance, business model
andstrategy.
The Audit & Risk Committee’s assessment of the Annual
Report to ensure that it is fair, balanced and understandable
considered the following:
A review of what fair, balanced and understandable means
for Unite Students.
The high level of input from the Chief Executive Officer and
Chief Financial Officer with early opportunities for the Board
to review and comment on the Annual Report.
Ensuring consistency in the reporting of the Group’s
performance and management information (as described
on page 23), risk reviews (as described on pages 67–79),
business model and strategy (as described on pages 14–17
and 3–9).
A cross-check between Board minutes and the Annual
Report is undertaken to ensure that reporting is balanced.
Whether information is presented in a clear and concise
manner, illustrated by appropriate KPIs to facilitate
shareholders’ access to relevant information.
To aid our review, the Audit & Risk Committee considers
reports from the Group Finance Team and reports from the
external auditor on the outcomes of their half-year review
andannual audit. As an Audit & Risk Committee, we support
Deloitte in displaying the necessary professional scepticism
itsrole requires.
Significant issues considered by the Committee
After discussion with both management and the external
auditor, the Committee determined that the key risk of
misstatement of the Group’s 2023 financial statements
relatedto Property valuations.
Property valuations
The Group’s principal assets are investment properties and
investment properties under development that are either
owned on balance sheet or in USAF or LSAV. The investment
properties are carried at fair value based on an appraisal by
the Group’s external valuers who carry out the valuations in
accordance with the RICS Red Book valuation guide, taking into
account transactional evidence during the year. The valuation
of property assets involves significant judgement and changes
in the key assumptions could have a significant impact on the
carrying value of these assets.
Management discusses the underlying performance of
each asset with the external valuers and provides detailed
performance data to them including rents, university lease
agreements, occupancy, property costs and costs to complete
(for development properties). Management receives detailed
reports from the valuers and performs a detailed review of the
valuations to ensure that management considers the valuations
to be appropriate. The valuation report is reviewed by the Chief
Financial Officer prior to sign-off.
Prior to finalising the 2023 accounts, the Committee met with
members of the Group’s valuer panel and challenged them
on the basis of their valuations and their core assumptions,
including the yield for each property, rental growth and
forecast costs.
AUDIT & RISK COMMITTEE continued
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AUDIT & RISK COMMITTEE continued
The Audit & Risk Committee questioned the external valuers
on market trends and transactional evidence that supports the
valuations. The Audit & Risk Committee was satisfied that the
Group’s valuers (CBRE, JLL and Knight Frank) were appropriately
qualified and provided an independent assessment of the
Group’s assets. The Audit & Risk Committee was satisfied that
an appropriate valuation process had taken place, the core
assumptions used were reasonable and hence the carrying
value of investment and development properties in the financial
statements was appropriate.
The external auditor explained the audit procedures to test the
valuation of investment and development properties and the
associated disclosures. Based on the audit work, the external
auditor reported no inconsistencies or misstatements that
were material in the context of the financial statements as a
whole. Further analysis and detail on asset valuations is set
outon pages 36–40.
Other issues considered by the Committee
Accounting for the cost of cladding remediation
The Group has provided for the estimated cost of remediating
cladding on properties where there is either a legal/regulatory
requirement to do so or where the Group has a constructive
obligation. The Audit & Risk Committee reviewed, challenged
and agreed the basis on which costs associated with the
remediation of cladding have been included in the Financial
Statements. The Committee also reviewed, challenged and
agreed the extent to which the Group had any constructive
obligations in respect of cladding remediation that should be
provided for. Based on this, the Committee was comfortable
with the process and controls adopted by management around
the disclosures and estimation of costs and provisions associated
with cladding remediation.
SaaS accounting
The Group has a number of contracts for Software as a Service
(SaaS) cloud computing arrangements.
In March 2019, the IFRS Interpretation Committee (IFRIC),
concluded on its assessment of the application of IAS 38
intangible Assets in respect of SaaS arrangements. IFRIC
concluded that SaaS arrangements are likely to be service
arrangements, rather than intangible or leased assets, because
the customer only has the right to use the software on a
supplier’s cloud infrastructure. Therefore, the supplier controls
the software and not the customer.
During the year, the Group identified that a portion of costs
capitalised in 2022 meet the definition of SaaS arrangements
and has made an adjustment to Intangible Assets to remove
the amounts. Further information is set out on page 34.
Risk management
The Group’s risk assessment process and the way in which
significant business risks are managed is a key area of focus
for the Audit & Risk Committee.
The Audit & Risk Committee’s work here was driven primarily
by performing an assessment of the approach to risk taken
by the Group’s Executive Committee and senior leadership
team. The Executive Committee is responsible for the delivery
of the Group’s risk management framework. The Executive
Committee and senior leadership team set the objectives for
the Group and then assess what risks could prevent the Group
from meeting these objectives. This assessment results in a
number of principal and emerging risks that are brought to the
Board for a detailed assessment.
The Audit & Risk Committee considered the work of the
Executive Committee through the year and has approved both
the Group’s Risk Management Framework and the Group’s
assessment of its principal risks and uncertainties, as set out
onpages 67–79.
Through these reviews, the Audit & Risk Committee
consideredthe risk management procedures within the
business and was satisfied that the key Group risks were
beingappropriatelymanaged.
The risk assessment flags the importance of the internal
control framework to manage risk and this forms a separate
areaof review for the Audit & Risk Committee.
The Board also formally reviewed the Group’s principal risks
attwo meetings during the year.
Internal controls
Led by the Group’s risk assessment process, we reviewed
theprocess by which the Group evaluated its control
environment. The Committee has delegated responsibility
to management for establishing effective risk management
and maintaining adequate internal controls, although the
Committee retains oversight responsibility. Internal controls
are designed to provide reasonable assurance regarding
(among other things) the reliability of financial reporting and the
preparation of the financial statements for external reporting
purposes. Acomprehensive strategic planning, budgeting and
forecastingprocess is in place. Monthly financial information
and performance insight is reported to the Board.
Internal audit
The Group used the internal Group Risk & Assurance team for
internal audit services through the year. The team continued
with the third line of defence audits in our operations, utilising a
framework of Operational Compliance Audits for our properties.
The property audits are designed with a focus on safety and,
where there are gaps identified, action plans are developed
and monitored. The results are shared with our Customer
Leadership Team to enable the sharing of best practice and
drive improvements across all of our operations where themes
are identified. In addition to this, the team completed four other
pieces of internal audit work.
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The first was a review over compliance with Senior Accounting
Officer requirements; the second was over the Starters, Leavers,
Movers process in place; the third was a post incident review over
the Escape of Water; and the fourth was a review of the Health
& Safety Management System in place. The team also undertook
follow-up reviews of the CCTV, Asbestos and GDPR audits from
2022 and two post-project reviews over refurbishments at two
of the Group’s properties. A Cyber Maturity Assessment was
undertaken by external experts and overseen by the Group Risk
& Assurance team.
Overall, the conclusion of all audits was that whilst improvements
can be made to processes audited, there were no significant
issues and controls were adequately designed. All reports noted
there were some areas of improvement required to maximise
controls and operational efficiency, which management is in the
process of implementing.
The Audit Committee has carried out a review of the Company’s
risk management and internal control systems. Any control
weaknesses that are identified are monitored and addressed in
the normal course of business, and no control weaknesses that
are material to the Group were identified in respect of 2023.
External audit
The effectiveness of the external audit process is facilitated
by appropriate audit risk identification at the start of the audit
cycle which we receive from Deloitte in a detailed audit plan,
identifying its assessment of these key risks.
For the 2023 financial year, the significant risks identified were
in relation to valuation of properties and management override.
These focus areas were discussed at the Audit & Risk Committee
and it was agreed that they should be the principal areas of
focus as they represent the areas with the greatest level of
judgement and materially impact the overall performance of
the Group. These risks are tracked through the year and we
challenged the work done by the auditor to test management’s
assumptions and estimates around these areas.
We assess the effectiveness of the audit process in
addressingthese matters through the reporting we receive
fromDeloitte at both the half-year and year-end, and reports
from management on how these risks are being addressed.
For the 2023 financial year, the Audit & Risk Committee
wassatisfied that there had been appropriate focus and
challenge on the primary areas of audit risk and assessed
thequality of the audit process to be good.
We hold private meetings with the external auditor at each Audit
& Risk Committee meeting to provide additional opportunity for
open dialogue and feedback from the Audit & Risk Committee
and the auditor without management being present. Matters
typically discussed include:
The auditor’s assessment of business and financial
statement risks and management activity thereof.
The transparency and openness of interactions with
management, confirmation that there has been no
restriction in scope placed on them by management and
theindependence of its audit.
How it has exercised professional scepticism.
I also meet with the external lead audit partner outside the
formal Audit & Risk Committee process.
Independence and external audit tender
The Audit & Risk Committee considers the reappointment of
the external auditor (including the rotation of the audit partner
which is required every five years) each year and assesses
its independence on an ongoing basis. 2023 is the ninth year
during which Deloitte has been the Group’s external auditor.
The Audit & Risk Committee reviewed Deloitte’s audit work and
determined that appropriate plans are in place to carry out
an effective and high-quality audit. Deloitte confirmed to the
Audit & Risk Committee that it maintained appropriate internal
safeguards to ensure its independence and objectivity. As part
of the Audit & Risk Committee’s assessment of the ongoing
independence of the auditor, the Audit & Risk Committee
receives details of any relationships between the Group and
Deloitte that may have a bearing on their independence and
receives confirmation that they are independent of the Group.
As discussed above, the Committee undertook an assessment
of Deloitte’s effectiveness, its processes, audit quality and
performance in May 2023 following completion of the 2022audit.
The Audit & Risk Committee also regularly considers when
it next intends to complete a competitive tender process for
the Company’s external audit. Given that the 2024 audit will
be Deloitte’s tenth year auditing the Group, a tender for the
2025 audit is required by applicable law and regulations. In
the meantime, the Committee remains satisfied with Deloitte’s
effectiveness and independence. The Committee and the Board
therefore decided to undertake an audit tender process with a
view to any change of auditor taking effect for the 2025 audit.
The Committee was mindful of capacity constraints in the audit
market, the need to allow a cleansing period for any audit firm
currently providing non-audit services to the Group, and the
need to allow for a sufficient transition period for any change of
auditor. Accordingly, we conducted an audit tender in 2023.
AUDIT & RISK COMMITTEE continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
The Committee agreed with the Board the criteria that would
apply to assessing audit firms’ proposals. Those criteria focused
on audit quality (including independence, professional scepticism,
technical competence and expertise in real estate accounting
and audit) and willingness to constructively challenge. As part of
the assessment of audit quality, the Group reviewed applicable
public reports on firms by the Financial Reporting Council and
asked each firm that bid for the audit to explain what risks it
saw to audit quality. The Committee considered, but decided
not to proceed with, a price-blind audit tender but agreed
with the Board that audit quality, and not price, would be the
primary criterion on which firms’ proposals were assessed.
TheCommittee considered the criteria applied to be
non-discriminatory.
The Group invited several challenger firms to participate in
the audit tender in addition to inviting the four major UK
audit firms, including Deloitte. None of those challenger
firmswished to participate.
In December 2023, the Committee recommended both Deloitte
and another firm to the Board as potential auditors, with a
justified preference to reappoint Deloitte as the Group auditors
with effect from 1January 2025. The Board considered and
supported the Committee’s recommendation and intends to
reappoint Deloitte. The Committee confirms compliance with the
provisions of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit & Risk Committee Responsibilities)
Order2014.
Non-audit services
To further safeguard the objectivity and independence of the
external auditor from becoming compromised, the Committee
has a formal policy governing the engagement of the external
auditor to provide non-audit services. No material changes
have been made to this policy during the year. This precludes
Deloitte from providing certain services, such as valuation
work or the provision of accounting services.
For certain specific permitted services (such as reporting
accountant activities and compliance work), the Audit & Risk
Committee has pre-approved that Deloitte can be engaged by
management, subject to the policies set out above, and subject
to specified fee limits for individual engagements and fee limits
for each type of specific service. For all other services, or those
permitted services that exceed the specified fee limits, I as
Chair, or in my absence, another member, can pre-approve
permitted services.
The Committee continued to monitor and manage other audit
firms undertaking non-audit services for the Group, including
considering the audit tender explained above.
During 2023, the Committee considered the potential for an
audit firm to be appointed to support the Group’s ongoing
technology transformation, but the tender process for that
resulted in the appointment of an organisation that does not
generally provide statutory audit services. The Committee also
considered tax services being provided by an audit firm and the
interaction with the audit tender. During the year, Deloitte was
appointed to undertake non-audit services. Fees for non-audit
work performed by Deloitte for the year ended 31 December
2023 were £0.1 million (2022: £0.1 million). The non-audit fees
related to the work undertaken by Deloitte LLP in its role as
external auditor to the Group for the review of the half-year
report. Further disclosure of the non-audit fees incurred during
the year ended 31 December 2023 can be found in note 2.6 to
the consolidated financial statements on page 197. Accordingly,
the Audit & Risk Committee was satisfied that both the work
performed by Deloitte LLP, and the level of non-audit fees paid
to it, were appropriate and did not raise any concerns in terms
of Deloitte LLP’s independence as auditor to the Group.
The Audit & Risk Committee approved the fees for audit
services for 2023 after a review of the level and nature of
work to be performed, including additional audit procedures
required as a result of changes in the regulatory environment,
and after being satisfied by Deloitte that the fees were
appropriate for the scope of the work required.
Engagement with shareholders
As part of the Group’s wider programme of shareholder
engagement, the Group offered our major shareholders the
opportunity to speak directly with me in my capacity as Chair
of the Audit & Risk Committee. None of those shareholders
requested such a discussion.
Audit & Risk Committee evaluation
The Audit & Risk Committee’s activities formed part of
the evaluation of Board effectiveness performed in the
year. Details of this process can be found under the 2023
Effectiveness Review found on page 109.
Ross Paterson
Chair of the Audit & Risk Committee
27 February 2024
AUDIT & RISK COMMITTEE continued
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
SUSTAINABILITY COMMITTEE
SUSTAINABILITY
GOVERNANCE
During the year, the Sustainability Committee continued
its oversight of our Sustainability Strategy, which is a key
component of our business planning and is central to
delivering our Home for Success purpose and our values,
especially Doing what’s right. Our Sustainability Strategy
provides the framework to achieve our key objectives of
creating a positive impact, through people and places.
The Sustainability Committee regularly reviewed the Group’s
performance against its targets and ambitions, to ensure Unite
Students is a responsible and resilient business. With oversight
from the Sustainability Committee, Unite Group focused on
driving lasting improvements in sustainability performance
supported by increased sustainability awareness and
engagement across the business and its wider stakeholders.
During 2023, the Sustainability Committee undertook an
external review of its effectiveness. The review found that
the Sustainability Committee is working effectively and going
into 2024, the Committee will continue to develop knowledge
across the evolving ESG landscape.
The Sustainability Committee works to
ensure the continued implementation of
the Sustainability Strategy and that its
ambitions and targets become business
asusual for our employees.
Dame Shirley Pearce
Chair
As a responsible and
sustainable business, we
want our places to deliver
sustainable growth for our
people, our communities
andthe planet.
Committee membership
Dame Shirley Pearce
Chair of the Sustainability Committee
Joe Lister
Chief Executive Officer
Ilaria del Beato
Non-Executive Director
Ross Paterson
Non-Executive Director
Number
of meetings
4
Attendance
See page 102
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
SUSTAINABILITY COMMITTEE continued
Sustainability Committee activities in 2023
Monitored the implementation of our Sustainability Strategy
and reviewed sustainability-related risks including climate-
related risks.
Supported the development of our Sustainable Construction
Framework and our Sustainable Procurement Framework.
Oversight of the successful delivery of £8.2 million energy
efficiency capital projects.
Oversight of our commitment to invest 1% of adjusted
profits to social initiatives including funding for the
UniteFoundation.
Monitored the continued implementation of our People
strategy and progress towards our Diversity, Equity,
Inclusion, Belonging (DEIB) & Wellbeing targets.
Our people
Everyone is unique. Everyone is important. And everyone
belongs in a community where they are safe, respected
and included and we strive to make that happen.
During the year, there was an increased focus on embedding
sustainability across the business through a new programme
of communication and updated procurement policies, DEIB
training and onboarding. The NUS Positive Impact programme,
a collaboration between the business and the National Union
of Students, has helped drive employee engagement and
during the year we saw an increase in employee volunteering
and community projects. You can read more about our
PositiveImpact programme on page 17.
The Sustainability Committee also receives regular engagement
updates from the wider leadership team and our Designated
Non-Executive Director for Workforce Engagement who
hears first-hand feedback from across the business via their
participation in the Culture Matters employee forum. This
feedback helps the Sustainability Committee monitor the
progress of the Group’s DEIB strategy, We are US, which launched
in 2022. During 2023, the strategy focused on consistent and
inclusive leadership and business behaviours alongside the
increase in diversity across the business. Further details of our
DEIB & Wellbeing strategy can be found on page95.
Our regular employee surveys demonstrate our commitment to
employee engagement and allow us to address concerns raised
by all teams. The feedback of these surveys is presented to the
Board which monitors the process for identifying and addressing
concerns raised by the employees. The Sustainability Committee
is keen to ensure the wellbeing, both physically and mentally,
of everyone across the business remains one of the Board’s
key priorities. Through engagement with the Sustainability
Committee, the business carried out a review and refresh of
our People policies and rolled out new wellbeing initiatives
toemployees.
The Sustainability Committee oversaw a business-wide focus on
embedding our Sustainability Strategy, including a pilot scheme
to trial different approaches to engaging students on energy
and water consumption and a strong focus on sustainability
running through our new procurement policies in our stand-
alone Sustainability Report. Increased participation in our Positive
Impact programme and volunteering were key measures of
employee engagement during 2023.
Our places
We want our places to deliver sustainable growth for our
people, our communities and the planet. We are working
towards net zero carbon and finding ways to use less
resources, future-proof our buildings and enable people
todo their bit for the environment.
The Sustainability Committee works to ensure the continued
implementation of the Sustainability Strategy and that
its ambitions and targets become business as usual for
ouremployees.
Following the publication of our Net Zero Carbon Pathway
in December 2021, the Sustainability Committee continues
to provide oversight of our pathway to net zero in both our
Operations and Developments. The Sustainability Committee
tracks our progress using reporting metrics covering the key
activities for delivery of our strategy.
To support our targeted energy reductions, the Sustainability
Committee has overseen the £8.2 million of energy initiatives
delivered in the year including LED lighting, smart water
tanks, solar PV and smart heating controls. During 2023 the
Committee supported a review of energy efficiency projects
delivered in 2022 and 2023 to assess performance versus
original expectations. The outcome of this review determined
annualised savings from projects completed in 2022 and 2023
willdeliver a c.4%/year reduction compared to our 2019 base
year. This review will help inform ongoing energy efficiency plans
in 2024 and beyond.
Keeping in mind the importance of improving sustainability
performance in our development activity, the Sustainability
Committee supported the launch of our first Sustainable
Construction Framework. This framework sets out our
approach to sustainable design and construction and
complements our Net Zero Carbon Pathway and other
sustainability commitments.
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Our approach
Our goal is to lead on sustainability and raise standards
in the living sector. Our governance and processes ensure
that we always operate with integrity and transparency.
With input from the Sustainability Committee, the business
continues to build on work done as an early adopter of
theTask Force on Climate-related Financial Disclosures
(TCFD)recommendations to improve our management of
climate-related risks. The ongoing improvement in our climate
disclosures supported a two-point improvement in GRESB rating
from 2022 to 2023, up from 84 to 86, and retained a four-star
rating. Alongside governance, oversight of compliance with
the UKGovernment’s official update to EPC Minimum Energy
Efficiency Standards requirements was a key focus for the
Sustainability Committee during 2023. As a result of a concerted
focus on improving the quality of EPC surveys, the impact of
capital investments made, and changes to theGovernment’s EPC
calculation methodology, the Unite Group achieved significant
improvements in EPC ratings in 2023 with 99% of properties
now rated A–C, (the new minimum standard which takeseffect
in England and Wales from 2027). TheSustainability Committee
will continue to review andmonitor EPC compliance across
allproperties.
Priorities for 2024
The aims for the coming year include continuing to oversee
the implementation of the Sustainability Strategy with regular
reviews of sustainability targets and performance.
SUSTAINABILITY COMMITTEE continued
The Committee will oversee the £12 million investment into
energy efficiency projects during 2024 and continue to monitor the
decarbonisation and climate resilience of our business to ensure
our plans remain credible and meet stakeholder expectations,
while protecting the business from material financial risks. The
Committee will also continue to monitor developments relating
to climate-related risk to ensure the Group’s net zero carbon
ambition evolves to remain in line with emerging expectations,
guidance and regulation in this area.
Following the launch of our Sustainable Procurement
Framework in 2023, the Committee will monitor the impact
of our supply chain on the Group’s sustainability objectives.
There will also be a continued focus to support increased
sustainability engagement amongst our people and customers.
Alongside this, the Committee will maintain oversight of our
ongoing commitment to invest 1% of adjusted profits into
social initiatives, which align with Unite’s wider purpose of
providing a Home for Success.
The successes of this last year outlined in this report are
a consequence of the exceptional expertise in our core
Sustainability team and the commitment of the Executive to
embed our sustainability objectives in the day-to-day work
of the business. This is not easy and requires changes in
behaviour at all levels of the Company. The progress that has
been achieved to date gives confidence that we can meet the
challenges of the future.
Dame Shirley Pearce
Chair of the Sustainability Committee
27 February 2024
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
HEALTH & SAFETY COMMITTEE
HEALTH
AND SAFETY
GOVERNANCE
Health and safety is at the heart of all we do.
Throughout2023 the Health & Safety Committee
continued to oversee and drive improved health and
safety practices while reviewing the Unite Group’s
healthand safetyperformance.
Each year the Health & Safety Committee reviews its
performance and evaluates its effectiveness. During 2023,
this evaluation was conducted externally by Independent
Audit Limited. The review found that the Health & Safety
Committee continue to work effectively.
2023 highlights across health and safety
Student safety and support
Our operating model means that all our buildings have 24/7
round-the-clock support, 365 days a year. The Committee
monitored the implementation of the Support to Stay
framework, which provides a supportive living environment to
help students fulfil their potential, regardless of any medical,
physical or mental health difficulties. Through the Support
to Stay framework, we launched a new student assistance
programme providing students with confidential 24/7 access
to a wellbeing helpline. The student assistance programme
also provides access to financial and legalinformation.
The Committee monitored the
implementation of the Support to Stay
framework, which provides a supportive
living environment to help students fulfil
their potential, regardless of any medical,
physical or mental health difficulties.
Professor Sir Steve Smith
Chair
Health and safety is at
the core of everything we
do. We are committed to
providing a Safe and Secure
workplace for our people
and customers living with us.
Committee membership
Professor Sir Steve Smith
Chair of the Health & Safety Committee
Joe Lister
Chief Executive Officer
Dame Shirley Pearce
Non-Executive Director
Angela Jain
Non-Executive Director
Ilaria del Beato
Non-Executive Director
Number
of meetings
4
Attendance
See page 102
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Employee health and wellbeing
Our employee support framework defines our commitment
to creating a healthy and happy workplace for our employees.
This framework ensures employees are getting the information
they need regarding health and wellbeing benefits and the
support available. During the year we rolled out new wellbeing
initiatives including:
Wellness action plans to support the development of healthy
working patterns.
Post-incident employee support management, ensuring all
employees receive adequate support.
A new wellbeing platform offering a range of resources
encouraging a self-led approach to wellbeing.
Health and safety training
We continued to deliver health, safety, security, fire and wellbeing
training courses to our existing employees and new starters, in
addition to mandatory e-learning modules for all employees.
During the year, and working in conjunction with the Academy,
our employees undertook fire marshall training and we rolled
outenhanced security training including personal safety and
conflict management.
Safety management system
During 2023, we carried out a comprehensive safety
management system review working alongside our internal
Risk & Assurance team. As part of this review, we are focused
on updating our policies and procedures related to health,
safety, security and fire to ensure they remain aligned with
current standards and best practice. Into 2024, we will focus
on the development and implementation of a comprehensive
Health & Safety management system.
H&S inspections
Our Risk & Assurance team continued to carry out H&S and
security inspections throughout our buildings to ensure
compliance. We also recruited a dedicated Standards Manager
to establish the safety standards for the business, with a robust
Compliance Framework implemented to audit each property at
least once a year across these core safety standards.
Security review
Keeping in mind the paramount importance of safety across
the business, the Health & Safety Committee supported a
proactive and comprehensive physical security review of our
entire estate to better understand the risks and create more
tailored mitigation plans. As we move into 2024, the Health
& Safety Committee will oversee the implementation of
additional security improvement options.
Building Safety Act 2022
Following the implementation of the Building Safety Act 2022,
during the year we completed the relevant registrations and
compliance responsibilities as required. The Health & Safety
Committee will continue to oversee the progress on the
Building Safety Act and monitor the Group’s compliance.
Fire safety during 2023
Fire safety team
During 2023, our investment and commitment to improving
fire safety performance continued. We have a proactive
approach to fire safety with a dedicated Fire Safety team
in place. This team have valuable hands-on knowledge and
experience from fire authorities to ensure we continue to
deliver on our Safe and Secure promise.
Our Fire Safety team also work closely with several Fire and
Rescue services, local authorities, the Department for Levelling
Up, Housing and Communities, as well as fire safety experts, to
provide advice and guidance through the life of our buildings,
from development design through to disposal. With the
increasingly complex and dynamic regulatory environment, we
expect these strong relationships will continue through 2024.
The way that we manage our fire risk comes from the
responsibility we have to our customers living with us. Our
motivation of Doing what’s right and Keeping everyone safe
in line with our values led the Fire Safety team to increase fire
safety engagement with our customers ahead of the 2023/24
academic year, followed by regular fire safety communication
during Fire Safety Week and throughout the academic year.
Authority inspection activity
Throughout 2023, there was a continued increase in authority
inspection activity by Fire Authorities and local authorities
alongside the Department for Levelling Up, Housing and
Communities. These inspections have been helpful and
collaborative, allowing us to better understand responsibilities
and evolving fire safety legislation. The Health & Safety
Committee oversaw the progress of this inspection activity
throughout 2023.
Fire Safety Regulations and Fire Safety Act 2022
We continue to operate our day-to-day activities in accordance
with the best practice approach following the introduction of
the Fire Safety Act 2022 and Fire Safety Regulations 2022. The
Committee continues to oversee our approach to ensure it is
effective and efficient.
Fire risk assessments
All our properties continue to be confirmed as safe to operate
by our external third-party accredited fire risk assessors as part
of the comprehensive annual fire risk assessment completed
at every property. This reflects the robust fire safety and fire
impairment management across our portfolio, as well as the
continued proactive surveying and remediation of our external
façades, smoke control systems, passive fire protection and
fire doors. The Committee continues to drive improvement
onthe completion of fire risk assessmentactions.
HEALTH & SAFETY COMMITTEE continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
HEALTH & SAFETY COMMITTEE continued
Fire impairment management and cladding remediation
Through the Committee’s oversight and recognising Unite
Student’s values and commitment to Doing what’s right, our
dedicated Fire Impairment team focused on the remediation
of non-external façade-related impairments such as Passive
Fire Protection and Smoke Vents. In total, 54 projects were
completed in 2023 with any remaining work due to be completed
in the first half of 2024. In addition, we completed fire safety
improvements on 16 buildings across our estate during 2023.
We have made significant fire safety improvements across our
properties and following a detailed governance review, new
processes and procedures have been implemented to ensure
improved ways of fire impairment management.
Our development activity
During 2023, we successfully completed another safe year of
development activity with the delivery of £57 million Morriss
House in Nottingham. This 705-bed property welcomed
students for the start of the 2023/24 academic year.
We also completed phase 1 of the refurbishment of Oak Brook
Park in Birmingham in October 2023. This refurbishment saw
updates to 371 bedrooms, kitchens and ensuite bathrooms,
forming part of our wider £50–75 million annual improvements
programme. The second phase of work is due to commence
in2024.
During the year work started on five new development sites
in Lower Parliament Street, Nottingham; Rushford Court,
Durham; Jubilee House, London; Abbey Lane, Edinburgh; and
Feeder Road, Bristol. These sites have a combined student
bed count of over 2,000. These developments are due to be
delivered across the 2024, 2025 and 2026 academic years.
We also held four Contractor Forum meetings. These
meetings allowed us to engage with our contractors and key
stakeholders to enhance collaboration, improve our safety
culture and strengthen the feedback loop for all those who
work in our Development and Construction teams. As part of
these Contractor Forum meetings, we were delighted to award
two Safety Awards to contractors whose ideas encouraged
innovative safety ways of working at development sites.
Development safety – 2023 in review
Site safety – We continued to work alongside our
contractors to ensure our sites are safe to operate.
Wellbeing – During 2023, we renewed our three-year charity
commitment to Mates in Mind who provide mental health
support and guidance for all our delivery sites. We also
instructed the British Safety Council to conduct a Wellbeing
Gap Analysis on the contractors across our development
sites. The report acknowledged the positive steps taken to
date, as well as identifying areas for improvement which will
beimplemented and embedded during 2024.
Safety reporting – We actively encouraged safety observation
and near miss reporting to help build a clearer picture of
our day-to-day risk profile and to promote a transparent
safetyculture.
Third-party audits and inspections – We have a robust
site safety inspection regime in place with our framework
adviser who attends each site monthly to audit standards
and push improvements. During the year, we introduced a
new assurance site safety inspector who conducts random
site safety inspections each quarter. This independent
assurance inspection has enabled us to verify that our
framework inspector scoring is accurate and that our sites
are achieving industry-leading standards, which far exceed
statutory compliance.
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Our focus for 2024
Looking ahead to 2024, the Health & Safety Committee will:
Oversee the governance of health and safety practices
across the business while prioritising the safety of our
customers, people, properties and our workplace as we
strive to deliver our value, Keeping us safe.
Support the ongoing commitment to fire safety remediations
and security improvements across properties.
Monitor the health and safety training of our frontline
teams so our people can assist to deliver our Safe and
Securepromise.
Support our continued close relationships with our
university partners to ensure student welfare is prioritised
to help students deal with the financial and wellbeing
pressures ofuniversity living.
2024 safety priorities
Improving our safety culture through colleague
engagementandcompetence.
Ensuring effective business tools are provided to enable
teams to deliver safety.
Effective performance monitoring through assurance,
auditing & investigation.
Professor Sir Steve Smith
Chair of the Health & Safety Committee
27 February 2024
HEALTH & SAFETY COMMITTEE continued
Safety performance in our development and refurbishment sites
Our comprehensive approach to safety across our development and recladding activity, resulted in zero RIDDOR reportable
injuries and 17 minor incidents in 2023. This represents good safety performance against the industry norm and is well within
our Unite Students internal benchmarks.
Hours worked
Reportable
incidents
Reportable
incidents
benchmark
Reportable
incident KPI
Non-reportable
incidents
Non-reportable
incidents
benchmark
Non-reportable
incident KPI
2020 718,467 3 0.30 0.42 15 5.00 2.09
2021 806,774 0 0.30 0 16 5.00 1.98
2022 1,860,904 0 0.30 0 26 5.00 1.4
2023 843,533 0 0.30 0 17 5.00 2.02
KPI calculated as: number of incidents x 100,000 hours/hours worked.
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE
REMUNERATION
GOVERNANCE
Dear Shareholder,
On behalf of the Board, it is my pleasure to present the
Directors’ Remuneration Report for 2023.
As in previous years, this report is split into three sections:
this Annual Statement, the Policy Report and the Annual
Report on Remuneration. Our Remuneration Policy was
last submitted to shareholders at the 2022 AGM, with the
Committee very pleased to receive 97.83% votes in favour. No
changes are being proposed to the policy this year; however,
we have reproduced the Policy Report in full over pages 135 to
145 for both ease of reference and in order to provide context
to the decisions taken by the Committee during the year.
Changes to the Executive team
In October, Unite Students announced several changes to its
Board and Executive team for the forthcoming financial year,
with the Committee tasked with determining the remuneration
arrangements for outgoing and incoming Directors in line with
thepolicy approved by shareholders.
After 13 years with Unite Students, including over seven years as
Chief Executive, Richard Smith stepped down from the Board with
effect from 31 December 2023. He will remain as an adviser to
the business until 3 October 2024 to ensure a smooth handover
of responsibilities and to provide advisory support on Unite
Group’s relationships with Higher Education partners and
governmentstakeholders.
During 2023 the Committee continued
to focus on aligning remuneration with
the long-term sustainable success of the
Company. Alongside executive succession
remuneration arrangements, the Committee
focused on ensuring the real living wage was
maintained for the wider workforce.
Nicky Dulieu
Chair
The Remuneration Committee
focuses on ensuring that
executive reward is linked
to the delivery of strategic
objectives and that it
reinforces the Group’s values.
Committee membership
Nicky Dulieu
Chair of the Remuneration Committee
Ross Paterson
Non-Executive Director
Dame Shirley Pearce
Non-Executive Director
Professor Sir Steve Smith
Non-Executive Director
Number
of meetings
5
Attendance
See page 102
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Richard will continue to receive base pay, pension and other
contractual benefits until 3 October 2024 but he will not be
eligible to participate in the 2024 annual bonus, nor will he
receive a 2024 long-term incentive award. Reflecting the
circumstances of his stepping down, to pursue a personal
goal to support the education and development of young
people – and noting also his long-service and proactive role
in succession planning – Richard will be treated as a ‘Good
Leaver’ for the purposes of his outstanding 2021, 2022 and
2023 PSP awards. Full details around the time pro-rating and
performance testing of these awards are set out on page156.
Richard will also be subject to a post-exit shareholding
guideline in accordance with the policy.
Richard is succeeded as Chief Executive by Joe Lister, who
stepped into the role after 22 years with Unite Group, including
15 years as Chief Financial Officer. Reflecting his significant and
relevant experience on the Board, and the expectation that he
will be strongly placed to lead the Company as it continues to
execute on its proven strategy and deliver valuable growth the
Committee determined that Joe’s remuneration package should
be fully aligned with that of his predecessor. Specifically, Joe
will receive a base salary of £606,900 (the same as the former
CEO after the application of the 5% senior management pay
increase for 2024), a pension contribution of up to 11% of salary,
a maximum annual bonus opportunity of 140% of salary and
an annual LTIP award of 200% of salary. Joe’s shareholding
guideline will also increase from 200% to 250% of salary.
Mike Burt was promoted from Group Investment Director to
Chief Financial Officer, joining the Board with effect from 1
January 2024. In setting Mike’s remuneration, the Committee
sought to balance his wealth of sector experience with the fact
that this will be his first PLC Executive Director role. Taking
these factors into consideration, Mike’s starting salary was
set at £393,750 (a 10.5% discount to his predecessor). In line
with the policy, the Committee reserves discretion to increase
Mike’s salary to market levels over the short to medium term
subject to his performance and development in role, noting
that this may necessitate higher percentage increases than
awarded to the wider employee population. The remainder
ofMike’s package will be aligned with his predecessor, namely
a pension contribution of up to 11% of salary, a maximum
annual bonus opportunity of 140% of salary and an annual
LTIP award of 200% of salary. Mike’s shareholding guideline
will be 200% of salary.
2023 performance and reward
2023 was another strong year for Unite with record earnings,
dividends, occupancy and reservations driven by the effort
and commitment of our teams across the country, and with
continued progress against our three key strategic objectives.
The Group continued to deliver for customers and universities,
with service and product initiatives driving a four-point
increase in customer NPS and continued thought-leadership,
proactive engagement and an unerring focus on student
welfare resulting in our highest-ever Higher Education NPS
score – a particularly impressive outcome given the challenges
of 2022. Unite also continued to deliver attractive returns
for shareholders, with financial highlights including a 13%
increase in earnings and an 8% increase in dividends, with
the latter helping to offset a small decrease in EPRA NTA to
deliver a positive Total Accounting Return for the year. In
July, the Group also completed a successful £300m equity
raise to help accelerate its investment into development and
asset management over the coming years. Finally, on being
a responsible and resilient business, good progress was
made against Unite Group’s ‘People and Places’ sustainability
framework, including further significant investments in energy
initiatives, a two-point improvement in the Group’s GRESB
score and the recent publication of an ambitious Sustainable
Construction Framework roadmap.
The Committee decisions around Executive remuneration
continue to be framed by the Group’s broader performance
context, and in light of the above – as well as other relevant
considerations – we approved the following in respect of 2023:
Salaries
As disclosed in last year’s report, the salaries of both
Executive Directors were increased by 3.0% with effect
from1 January2023, in line with the increase for other senior
management, and below the average increase across the Group
of 8.6% – with implementation of larger planned increases being
delayed to a future date.
During the year, the Committee resolved to implement the
remainder of the phased uplift for Executive Directors, and
approved further increases of 7.4% and 3.9% for Richard
Smith and Joe Lister with effect from 1 July 2023, bringing their
total 2023 salary increases to 10.6% and 7.0% respectively.
In making this decision, the Committee took into account the
collective and personal contributions of Executive Directors,
as well as the strong mid-year trading update detailing the
Group’s record reservations for the 2023/24 academic year.
The Committee also reflected on market practice which
showed that the median 2023 salary increase for Executive
Directors at FTSE 350 Real Estate companies had been 5%,
with Unite Group’s overall market competitiveness therefore
continuing to deteriorate, despite strong relative performance.
REMUNERATION COMMITTEE continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Annual bonus
The annual bonus scheme was operated in line with the
Policy for Executive Directors in 2023. Following a review of
performance against targets set at the start of the year, the
Committee confirmed that Executive Directors will each receive
bonuses of 55.0% of maximum (equating to 77.0% out of a
maximum of 140% of salary). This overall outcome reflects
mixed results against both financial and non-financial targets
set at the start of the year, with maximum payouts recorded
under the LTV, customer satisfaction and university reputation
metrics, and above-target performance for the adjusted EPS
and GRESB rating metrics. In-year performance against the
TAR per share and employee engagement metrics, however,
fell short of the target range set. The Committee has reviewed
this outcome in the context of overall Group performance and
believes that the outcome is both fair and appropriate. Further
details, including bonus targets and outcomes, are included on
page 149.
Long-term incentives
Following the publication of TAR results by comparators
with March 2023 year-ends, the Committee confirmed the
final vesting of the 2020 LTIP awards as 18.7% – higher than
that estimated in last year’s report. This overall outcome
reflected Unite’s strong relative TAR in the final year of the
performance period, being one of only seven companies
to report positive year-on-year TAR growth and having
overtaken four comparators compared to the two-year
performanceassessment.
LTIP awards made in April 2021 reached the end of their
performance period as at 31 December 2023. These awards
were based equally on absolute EPS, relative TSR and relative
TAR, with Unite’s performance for both the TAR and TSR
elements compared to the constituents of the FTSE 350 Real
Estate Supersector Index. Over the three-year performance
period, Unite’s relative TSR ranked above upper quartile versus
the comparator group (equating to 100.0% vesting), whilst
EPS performance was just above the threshold target (28.0%
vesting). Vesting of the relative TAR element will be finalised
following the publication of comparator results over the coming
months, with the latest interim performance assessment
suggesting that Unite is currently ranked above upper quartile.
Overall estimated vesting of the 2021 LTIP is therefore 76.0%.
Further details are included on page 150.
Also during the year, Executive Directors were each granted
an award under the LTIP in April 2023 which will vest
based onperformance over the three financial years to
31 December2025. Stretching targets linked to relative
TSR, relative TAR and operational energy were disclosed
prospectively in last year’s report, whilst setting of the absolute
EPS and EPC ratings targets was delayed slightly and disclosed
in the 6 April 2023 market announcement. Any award vesting
will be required to be held for an additional two-year period.
Furtherdetails on the number of shares granted and targets
areincluded on page 155.
Overall pay outcomes for 2023
Taken as a whole, the Committee is satisfied that overall pay
outcomes in respect of the year ended 31 December 2023
are appropriate and accordingly we have not applied any
discretion to this year’s incentive outcomes.
Implementation of the policy in 2024
The Committee is confident that the policy continues
to effectively support Unite’s short- and long-term
strategic objectives and promote management and
shareholderalignment.
Salaries
As noted above, Joe Lister’s starting salary as CEO will be
aligned with that of his predecessor, taking into account the
2024 senior management pay increase of 5%. Mike Burt’s
starting salary as CFO has been set at £393,750.
The average salary increase across the Group will be 8.8%.
Asin 2023, the Group will operate a tiered approach to salary
increases, with the majority of the budget targeted towards
lower-paid colleagues. Unite Group maintains its commitment
to being an accredited Real Living Wage employer and, for
relevant individuals, has implemented the rates set by the
Living Wage Foundation (10.0% in London and 10.1% across
the rest of the UK).
Pension
Executive Directors will continue to receive a pension scheme
contribution, a cash allowance of equivalent cost to the
Company or a combination of both. Total employer pension
contributions for the CEO and CFO are in line with the offering
available to the wider employee population at 11% of salary.
Annual bonus
Joe Lister and Mike Burt will participate in the 2024 annual
bonus, with maximum opportunities of 140% of salary. There
will be a small number of changes to the performance metrics
and/or approach to measurement for 2024, including reverting
back to using net debt to EBITDA in place of LTV and to using
Higher Education Trust rather than NPS, as well as revising the
Customer NPS metric to be based on year-round performance
rather than just check-in. The Committee remains satisfied
that the overall blend of financial and non-financial measures
continues to support the Group’s strategy and reinforces its
values. For both the financial and non-financial elements,
targets have been set to be challenging relative to the business
plan. Further details, including the rationale for the various
changes outlined above, are included on page 157.
Long-term incentives
There will be no change to the operation of the long-term
incentive in 2024. Joe Lister and Mike Burt will each receive an
award of up to 200% of salary delivered through a combination
of the PSP and ESOS. The Committee is not proposing any
changes to the performance metrics used for the 2024 LTIP,
which will continue to include two sustainability metrics.
Further details are included on page 158.
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REMUNERATION COMMITTEE continued
Non-Executive Director fees
The fee payable to the Chair of the Board will be increased by
7.5% in 2024, with a second stage increase to be considered
for 2025. This reflects the outcome of a periodic review by the
Committee of the responsibilities and time commitment of the
role, relevant market data and a broader discussion around
our philosophy on positioning fee levels at Unite Group. The
most recent previous review took place in September 2020.
Following a similar review by the Chair of the Board and
Executive Directors, adjustments have been implemented
forthe Non-Executive Director base fee and the additional fee
payable to the Senior Independent Director. Further details
areincluded on page 151.
Workforce remuneration considerations
The Committee continues to monitor pay and practices for
other senior Executives and more broadly across the wider
workforce when considering the remuneration of Executive
Directors. The Group People Director is invited to attend
Committee meetings on a regular basis to provide updates
onworkforce initiatives and to offer an employee perspective
tothe Committee’s deliberations.
This year the Committee reviewed proposals for the introduction
of a Restricted Share Plan to replace the PSP at certain below-
Board levels – a scheme which is designed to support retention
and provide a clearer reward outcome for individuals where
line-of-sight to Group metrics is limited. As noted above, the
Committee also reviewed proposals for the 2024 salary budget
and the continued approach of tiered increases to support
those colleagues most impacted by inflationary pressures.
We have continued to review and disclose both the statutory
CEO pay ratios and additional ratios looking at both fixed pay
and pay excluding long-term incentives. This year, the headline
ratio of CEO total remuneration to the median employee, has
increased from 42:1 to 54:1, driven primarily by the strong
estimated vesting under the 2021 LTIP (76.0% vs. 18.7% for the
2020 LTIP). However, the ratio of median employee salary to
the CEO fell from 23:1 to 19:1 reflecting the tiered approach
to salary increases last year and the substantial Real Living
Wage increase awarded to relevant individuals; whilst the
ratio of median employee salary plus annual bonus to the
CEO was broadly flat, recognising the similarity in outcomes
under the schemes operated at all levels. The Committee
remains satisfied that the year-on-year fluctuations mainly
reflect differences in the structure of pay at different levels
ofseniority.
Finally, details of our gender diversity and pay gaps across the
Group are provided on pages 54 and 152, with the Committee
pleased to note a further modest improvement in the mean
gender pay gap in 2023. As for most companies, there is still
work for Unite Group to do in this space and our Gender Pay
Gap Report therefore references an action plan to further
progress activity in this area over the short and medium term.
Other Board changes during the year
Elizabeth McMeikan retired as Non-Executive Director,
Senior Independent Director and Chair of the Remuneration
Committee with effect from 28 February 2023 and I took over
the latter two roles from the same date.
Angela Jain joined the Unite Group Board with effect from
1 August 2023, and is a member of the Health & Safety and
Nomination Committees. Fees paid to Angela are in line with
the fees paid to the other Non-Executive Directors, as disclosed
on page 148.
Looking ahead
The 2025 AGM will mark the third anniversary of the adoption
of the current Remuneration Policy and in accordance with
UK reporting regulations, we will be required to submit a new
policy to shareholders for approval at this time. In line with
Unite Group’s approach for previous reviews, the Committee
is planning to conduct a full review of existing remuneration
arrangements during 2024, and will look to engage major
shareholders to seek their input in due course. The Committee
will continue to monitor market developments throughout
the 2024 AGM season and will consider the appropriateness
of any emerging trends for Unite Group. I hope that you find
this report a clear account of the Committee’s decisions for the
year and would be happy to answer any questions you may
have at the upcoming AGM.
Nicky Dulieu
Chair of the Remuneration Committee
27 February 2024
130
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Base salary
Pension,
benefits
Annual
bonus
LTIP
Salaries increased with effect
from 1 January 2023, as follows:
CEO = £538,175 (+3.0%)
CFO = £423,588 (+3.0%)
Salaries further increased from
1July 2023, as follows:
CEO = £578,000 (+7.4%)
CFO = £440,000 (+3.9%)
Pension contributions (or
equivalent cash allowance) at
amaximum of 11% of salary
forCEO and CFO.
Benefits in line with policy.
Annual bonuses of 77.0% of salary
for each Executive Director (55.0%
of maximum opportunity).
50% of these amounts will be
deferred in Unite shares for
twoyears.
2020 LTIP final vesting confirmed
at 18.7%.
2021 LTIP final vesting to be
finalised once comparator TAR
results are published. Expected
total vesting of 76.0% based on:
Relative TSR ranking above
upper quartile compared to
the constituents of the FTSE
350 Real Estate Index
2023 adjusted EPRA EPS just
above the threshold target
Estimated relative TAR
ranking above upper
quartilecompared to the
constituents of the FTSE 350
Real Estate Index
Starting salaries for new CEO and
CFO set as follows:
CEO = £606,900 (in line with
predecessor after 5% senior
Executive increase)
CFO = £393,750 (10.5%
belowpredecessor)
Pension contributions (or
equivalent cash allowance)
toremain at 11% of salary.
No change to benefits for 2024.
Maximum annual bonus
opportunities of 140% of salary.
2024 bonuses to be based:
25.0% on adjusted EPRA EPS
25.0% on TAR per share
20.0% on Net debt:EBITDA
7.5% on Customer satisfaction
7.5% on Higher Education
Trust
7.5% on Employee
engagement
7.5% on GRESB rating
Awards of up to 200% of salary
to be made to each Executive
Director in 2024.
Performance to be measured
over the period 1 January 2024 to
31 December 2026. No change to
measures, with awards based:
28% on adjusted EPRA EPS
28% on relative TAR
28% on relative TSR
8% on operational
energyintensity
8% on EPC ratings
Two-year holding period will
apply to all vested shares.
Reviewed from time to time,
with reference to salary levels
for similar roles at comparable
companies, to individual
contribution to performance;
and to the experience of
eachExecutive.
Company pension contributions
(or cash allowance) aligned with
the broader workforce (11%
ofsalary).
Benefits typically consist of the
provision of a company car or a
car allowance, and private health
care insurance.
Maximum annual bonus
opportunity for all Executive
Directors of 140% of salary.
Performance measures
typically include both financial
and non-financial metrics, as
well asthe achievement of
individualobjectives.
50% of any bonus earned is
deferred in shares for two years.
Malus and clawback
provisionsapply.
Maximum award size for all
Executive Directors of 200% of
salary in normal circumstances
(up to 300% of salary in
exceptional circumstances).
Awards vest subject to
performance over a three-
year period. Vested shares are
typically subject to an additional
two-year holding period.
Malus and clawback
provisionsapply.
REMUNERATION IN RESPECT OF 2023 OVERVIEW OF REMUNERATION POLICY IMPLEMENTATION OF POLICY IN 2024
See page 147
See page 147
See page 149
See page 150
See page 156
See page 157
See page 157
See page 158
See page 137
See page 137
See page 138
See page 139
Overview of Unite Group remuneration policy and implementation
131
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
2023 Remuneration at a glance
2023 Single total figure of remuneration for Executive Directors
Salary
Taxable
benefits Pension
Annual
bonus LTIP Other Total
Richard Smith £558,088 £16,241 £53,238 £429,727 £682,670 £0 £1,739,964
Joe Lister £431,794 £17,068 £38,734 £332,482 £555,499 £2,318 £1,377,895
2023 Annual bonus outcomes
Measure Weight
Threshold On-target Maximum
Actual
Outcome
(% of max)30% of max 50% of max 100% of max
Adjusted EPS 25.0% 42.0p 44.0p 46.0p 44.3p 57.5%
TAR per share 25.0% 64.5p 73.5p 83.5p 26.5p 0.0%
Loan to value 20.0% 35.0% 34.0% 32.0% 28.0% 100.0%
Customer satisfaction 7.5% 38 40 42 42 100.0%
University reputation 7.5% 11 13 15 32 100.0%
GRESB rating 7.5% 84 85 87 86 75.0%
Employee engagement 7.5% 73 75 77 70 0.0%
Executive
Max
opportunity
(% of salary)
Overall
outcome
(% of maximum)
Overall
outcome
(% of salary)
Overall
outcome
(£)
Richard Smith 140.0% 55.0% 77.0% £429,727
Joe Lister 140.0% 55.0% 77.0% £332,482
2021-2023 LTIP outcomes
Measure Weight
Threshold Stretch
Actual
Vesting
(% of max)25% vest 100% vest
2023 Adjusted EPS 1/3 44.0p 51.5p 44.3p 28.0%
Relative TSR performance 1/3 Median
-5.5%
Upper quartile
3.9%
Above upper quartile:
5.9%
100.0%
Relative TAR performance 1/3 Median Upper quartile Current estimate*:
Above upper quartile
100.0%
Executive
Estimated*
overall vesting
(% of maximum)
Estimated*
interests
vesting Date vesting*
Estimated*
value (incl.
dividends)
Richard Smith
76.0%
66,537
12 April 2024 (holding period
applies until 12 April 2026)
£682,670
Joe Lister 54,210 £555,499
* Vesting of the relative TAR element will be finalised following the publication of March year-end comparator results over the coming months, with Unite
Group’s TAR currently estimated to rank in the top quartile (based on performance after two full financial years). Details of the final vesting outcome will be
provided in next years report.
132
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
ELIGIBILITY ELEMENT OF PAY DETAILS
Overview of remuneration across the Group
Employees at
alllevels
Executive Directors
and other senior
leaders
Executive
Directorsonly
Salary
Benefits
Pension
SAYE
Annual bonus – cash
Long-term incentive
Annual bonus – deferred
Shareholding guidelines
Salaries are generally reviewed annually, taking into account Company
and individual performance, experience and responsibilities. As an
accredited Living Wage employer, all of Unite Group’s employees receive
at least the voluntary living wage rate.
Employees across all levels of the business are eligible for the Company-
funded Health Cash Plan and an enhanced Company sick pay scheme.
All employees have free 24/7 access to our employee assistance
programme which provides counselling and support to employees with
everyday situations and more serious concerns including up to eight
face-to-face sessions per issue per year. Life assurance cover is provided
for all eligible employees at 4x annual salary and employees can access
a range of deals and discounts through our discount providers. We offer
employees 25 days annual leave a year plus bank holidays and also
operate a holiday purchase scheme to allow employees to purchase up
to an extra week of annual leave each year. Employees can support their
chosen charities by participating in our charity match or give-as-you-
earn schemes. We also offer financial support to our employees through
season ticket loans, student rental discounts and the bike to work
scheme and employee service is recognised with long-service awards.
All employees can participate in the UNITE Group Personal Pension
scheme, with an alternative cash pension allowance available in certain
circumstances. Our pension offering was reviewed and improved
with effect from 1 January 2020, with all employees eligible to receive
a Company contribution of up to 11% of salary, subject to their own
contribution level.
We encourage all employees to become shareholders in Unite Group
by participating in the SAYE scheme, under which participants save
monthly over three years with the option to acquire shares at a discount
at the end of the savings period. Currently c.15% of eligible employees
participate in the SAYE.
All employees are eligible to participate in the annual bonus scheme,
with outcomes based on both Company performance and individual
contribution. Maximum opportunities, performance measures and
weightings vary by grade; however, metrics are broadly similar across all
levels to support delivery of our strategy.
Executive Directors and other senior leaders may be invited to participate
in the LTIP each year. Performance conditions are consistent for all
participants, but award sizes vary. From 2023, Heads of Department
may instead be invited to participate in the Restricted Share Plan
(RSP). This scheme is designed to support retention and to provide a
clearer reward outcome for our senior managers, with awards and the
applicabledeferral period being consistent for all participants.
Currently, only Executive Directors are required to defer a
proportion of their bonus into Unite Group shares, which supports
shareholderalignment.
While all employees are strongly encouraged to become shareholders to
allow them to share in the success of the Group, currently only Executive
Directors are subject to formal shareholding guidelines (bothin-post
and post-exit).
133
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GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Engaging with our employees on Executive remuneration
Our Designated Non-Executive Director for Workforce Engagement and the Group People Director periodically discuss the topic
of remuneration at the Culture Matters employee forum, including the structure, role and remit of the Remuneration Committee,
how the pay policy helps to support Unite Group’s strategy and values, and how pay practices for Executive Directors are aligned
with those across the broader employee population. Consistent with last year’s report, and based on feedback received from
the forum in 2022, the Committee has continued to include some commentary in the section on the 2023 annual bonus
(seepage149) around how it has considered health, safety and wellbeing in confirming bonus outcomes this year.
Due to last-minute transport complications, the employee forum scheduled for 2023 was shortened and the format revised.
Forum members were invited (and remain able at any time of the year) to submit any comments, queries or concerns they have
on the matter of Executive remuneration to the Designated Non-Executive Director for Workforce Engagement. Any submissions
are passed on to the Committee at its next formal meeting; however, none were received in 2023.
In 2024, the Committee intends to use a session of the Culture Matters forum to discuss the Remuneration Policy review, and will
consider any employee input received – as well as that received from shareholders – in finalising the overall structure and design.
How remuneration supports our strategy
Captured in… Strategic objectives supported
2024 incentive measures
Annual
bonus LTIP
Delivering for
our customers
and universities
Attractive
returns for
shareholders
A responsible
and resilient
business
Earnings Per Share (EPS)
Total Accounting Return (TAR)
Absolute
Relative
Net debt:EBITDA
Total Shareholder Return (TSR)
Relative
Customer satisfaction
Higher Education Trust
Employee engagement
GRESB rating
EPC Ratings
Operational energy intensity
134
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
This report has been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). It also meets the requirements
ofthe UK Listing Authority’s Listing Rules and the Disclosure and Transparency Rules.
In accordance with the regulations, the following sections of the Remuneration Report are subject to audit: the Single total figure
of remuneration for Directors and accompanying notes (pages 147 to 148), Scheme interests awarded during the financial
year (page 155), Payments to past Directors (page 156), Payments for loss of office (page 156) and the statement of Directors’
shareholdings and share interests (pages 160 to 162). The remaining sections of the report are not subject to audit.
The 2018 UK Corporate Governance Code sets out principles against which the Committee should determine the policy for
Executives. A summary of the principles and how the Unite Group’s Remuneration Policy reflects these is set out below:
Principle Approach
Clarity – Remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce.
The Committee operates a consistent remuneration approach that is well-
understood internally and externally. The Committee regularly engages with
major shareholders on Executive remuneration and undertook a detailed
consultation during the design of the current policy.
Simplicity – Remuneration structures should avoid
complexity, and their rationale and operation
should be easy to understand.
The Group operates a market-standard remuneration structure consisting
of fixed pay, an annual bonus and a single long-term incentive. The annual
bonus scheme has been further simplified as part of the most recent policy
review through the standardisation of the deferral requirement regardless
ofexisting shareholdings.
Risk – Remuneration arrangements should ensure
reputational and other risks from excessive rewards,
and behavioural risks that can arise fromtarget-
based incentive plans, are identified and mitigated.
Each year, incentive targets will be set which the Committee believes
are stretching and achievable within the risk-appetite set by the Board.
The Committee retains full discretion to override formulaic incentive
outcomes under both the annual bonus and long-term incentive in the
event that this would produce a result inconsistent with the Company’s
remunerationprinciples.
All variable incentives incorporate recovery provisions (malus and clawback)
that allow the Committee to reduce the outcomes, potentially down to
zero, in specified cases. The Committee believes that these triggers are
appropriately wide-ranging and enforceable.
Alignment to culture – Incentive schemes
should drive behaviours consistent with
Companypurpose, values and strategy.
All permanent employees participate in the annual bonus, and share similar
corporate performance metrics to ensure cultural alignment across the
Group. We believe that aligning remuneration across the business is a key
element of aligning our culture, fulfilling our values and being a strong driver
ofbusiness performance.
Predictability – The range of possible values of
rewards to individual Directors and any other
limits or discretions should be identified and
explained at the time of approving the policy.
The Committee maintains clear caps on incentive opportunities and will use
its available discretion if necessary.
Proportionality – The link between individual
awards, the delivery of strategy and the long-term
performance of the Company should be clear.
Outcomes should not reward poor performance.
The Committee ensures performance metrics are clearly aligned with the
Group’s strategy each year, maintaining an appropriate balance between
fixed pay, short- and long-term incentive opportunities. Targets are set to
be stretching but achievable, within the Board’s risk appetite. Details of our
approach to measure selection and target setting is included as a note to
thepolicy table.
135
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Directors’ Remuneration Policy
Unite Group’s Remuneration Policy was approved by
shareholders at the 2022 AGM on 12 May 2022 and came
into effect from that date. The report below, save for the
minor changes identified, is as disclosed in the 2021 Directors’
Remuneration Report, which is available to download from the
Company’s website at www.unitegroup.com/investors/reports-
and-presentations.
References to financial years have been updated
whereappropriate.
References to changes to the 2019 Remuneration Policy
have been removed.
Wording around legacy pension arrangements in effect
priorto 1 January 2023 has been removed.
Legacy wording around the requirement to defer
a percentage of annual bonus only if shareholding
guidelines have not been met has been removed from
the‘Shareholding guidelines’ section.
Pay-for-performance charts have been updated to
reflect2024 packages for the new CEO and CFO.
New service contract dates have been added.
The Group aims to balance the need to attract, retain and
motivate Executive Directors and other senior Executives of an
appropriate calibre with the need to be cost effective, whilst at the
same time rewarding exceptional performance. The Committee
has designed a Remuneration Policy that balances those factors,
taking account of prevailing best practice, investor expectations
and the level of remuneration and pay awards made generally
toemployees of the Group.
In addition to the above, the Remuneration Policy for the
Executive Directors and other senior Executives is based on
thefollowing key principles:
A significant proportion of remuneration should be tied to
the achievement of specific and stretching performance
conditions that align remuneration with the creation of
shareholder value and the delivery of the Group’s strategic
plans, taking care to consider the needs of all stakeholders.
There should be a focus on sustained long-term
performance, with performance measured over clearly
specified timescales, encouraging Executives to take action
in line with the Group’s strategic plan, using good business
management principles and taking well-considered risks.
Individuals should be rewarded for success, but steps should
be taken, within contractual obligations, to prevent rewards
for failure – whether financial or operational.
Above all, Executive remuneration should support the values
and culture of the Group. Pay should be simple and easy to
understand, with all aspects clear and openly communicated
to stakeholders and with alignment with pay philosophies
across the Group.
136
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Policy table
Function Operation Opportunity
Performance
metrics
Base salary
To recognise the
individual’s skills and
experience and to
provide a competitive
base reward.
Base salaries are reviewed
from time to time, with
reference to salary levels for
similar roles at comparable
companies
1
, to individual
contribution to performance;
and to the experience of
eachExecutive.
Any base salary increases
are applied in line with the
outcome of the review as part
of which the Committee also
considers average increases
across the Group.
In respect of existing Executive
Directors, it is anticipated that
salary increases will generally
be in line with those of salaried
employees as a whole. In
exceptional circumstances
(including, but not limited to, a
material increase in job size or
complexity) the Committee has
discretion to make appropriate
adjustments to salary levels
to ensure that they remain
market competitive.
None
Pension
To provide an
opportunity for
Executives to
build up income
uponretirement.
All Executives are either
members of the Unite
Group Personal Pension
scheme or receive a cash
pensionallowance.
Salary is the only element
of remuneration that
ispensionable.
Executive Directors receive a
Company pension contribution
– or an equivalent cash
allowance – aligned to that
offered to a majority of
employees across the Group
in percentage of salary terms
(currently 11% of salary).
None
Benefits
To provide non-
cash benefits which
are competitive
in the market in
which the Executive
isemployed.
Executives receive benefits
which consist primarily of
the provision of a company
car or a car allowance, and
private health care insurance,
although can include any such
benefits that the Committee
deemsappropriate.
Benefits vary by role and
individual circumstances;
eligibility and cost is
reviewedperiodically.
The Committee retains
the discretion to approve
a higher cost in certain
circumstances (e.g. relocation)
or in circumstances where
factors outside the Company’s
control have changed
materially (e.g. increases
ininsurancepremiums).
None
SAYE
To encourage the
ownership of shares
in Unite.
An HMRC-approved scheme
whereby employees (including
Executive Directors) may save
up to the maximum monthly
savings limit (as determined
by prevailing HMRC guidelines)
over a period of three years.
Options granted at up to a
20%discount.
Savings are capped at the
prevailing HMRC limit at the
time employees are invited
toparticipate.
None
1. Remuneration peer companies include the constituents of the FTSE 350 Real Estate Index and UK-listed companies of similar market capitalisation.
TheCommittee reviews comparator groups periodically to ensure they remain appropriate and retains the discretion to change companies.
137
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Function Operation Opportunity
Performance
metrics
Annual bonus
To incentivise and
reward strong
performance
against financial
and non-financial
annual targets, thus
delivering value to
shareholders and
being consistent with
the delivery of the
strategic plan.
Performance measures, targets
and weightings are set at the
start of the year.
At the end of the year, the
Remuneration Committee
determines the extent to which
targets have been achieved.
From the 2022 annual bonus
onwards, 50% of any bonus
payable will be deferred for
two years.
Deferral is generally by an
allocation of shares in the
Company, which are generally
held in the Employee Share
Ownership Trust.
Awards under the Performance
Related Annual Bonus are
subject to malus and clawback
provisions, further details of
which are included as a note to
the policy table.
For Executive Directors, the
maximum annual bonus
opportunity is 140% of
basesalary.
Up to 30% of maximum
will be paid for Threshold
performance under each
measure and up to 50% of
maximum will be paid for on-
target performance.
A payment equal to the value
of dividends which would have
accrued on vested deferred
bonus shares will be made
following the release of awards
to participants, either in the
form of cash or as additional
shares. It is the Committee’s
current intention to make any
dividend payments in the form
of shares.
Performance is assessed on
an annual basis, as measured
against specific objectives set
at the start of each year.
Financial measures will make
up at least 70% of the total
annual bonus opportunity in
any given year. The remainder
will be split between non-
financial metrics and personal/
team objectives according to
business priorities, with the
weighting on the latter being
no more than 20% of the total
annual bonus opportunity.
The Committee has discretion
to adjust the formulaic bonus
outcomes both upwards
(within the plan limits) and
downwards (including down
to zero) to ensure alignment
of pay with performance,
e.g., in the event of one of
the targets under the bonus
being significantly missed or
unforeseen circumstances
outside management control.
The Committee also considers
measures outside the bonus
framework (e.g. Health &
Safety) to ensure there is no
reward for failure.
For 2024, financial metrics
and non-financial metrics will
make up 70% and 30% of the
total annual bonus opportunity
respectively. Further details of
the measures, weightings and
targets applicable are provided
on page 157.
138
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Function Operation Opportunity
Performance
metrics
LTIP
To drive sustained
long-term
performance that
supports the creation
of shareholder value.
The LTIP comprises a
Performance Share Plan (PSP)
and an Approved Employee
Share Option Scheme (ESOS).
The ESOS is used to deliver a
proportion of the LTIP in a tax-
efficient manner, and is subject
to the same performance
conditions as awards made
under the PSP.
Award levels and performance
conditions are reviewed before
each award cycle to ensure
they remain appropriate and
no less stretching than the
firstcycle.
Awards under the LTIP are
subject to malus and clawback
provisions, further details of
which are included as a note
tothe policy table.
The LTIP provides for an award
up to a normal aggregate limit
of 200% of salary for Executive
Directors, with an overall limit
of 300% of salary in exceptional
circumstances. The current
intention is to grant each
Executive Director awards
equivalent to 200% of salary.
Awards may include a
grant of HMRC-approved
options not exceeding £6k
per annum, valued on a fair
valueexchange.
A payment equal to the value
of dividends which would have
accrued on vested shares will
be made following the release
of awards to participants,
either in the form of cash or
as additional shares. It is the
Committee’s current intention
to make any future dividends
payments in the form of shares.
Vesting of LTIP awards
is subject to continued
employment and performance
against relevant metrics
measured over a period
of at least three years.
The Committee will select
performance measures
ahead of each cycle to
ensurethat they continue to
be linked to the delivery of
theCompanystrategy.
Under each measure, threshold
performance will result in up
to 25% of maximum vesting
for that element, rising on a
straight-line to full vesting.
If no entitlement has been
earned at the end of the
relevant performance period,
awards will lapse. A proportion
of vested awards may, at the
discretion of the Committee,
be subject to a holding
period following the end of
a three-year vesting period.
The Committee’s current
intention is that all awards
will be required to be held for
an additional two-year period
post-vesting.
As under the Performance
Related Annual Bonus, the
Committee has discretion
to adjust the formulaic LTIP
outcomes to ensure alignment
of pay with performance, i.e. to
ensure the outcome is a true
reflection of the performance
of the Company.
Details of the measures and
targets to be used for 2024
LTIP awards are included
in the Annual Report on
Remuneration on page 158.
139
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Notes to the policy table
The Committee is satisfied that the above Remuneration Policy
is in the best interests of shareholders and does not promote
excessive risk-taking.
For the avoidance of doubt, in approving this Directors’
Remuneration Policy, authority is given to the Company
to honour any commitments entered into with current or
former Directors (such as the vesting or exercise of past
shareawards).
Performance measure selection and approach
totargetsetting
Measures used under the Annual Bonus and LTIP are selected
annually to reflect the Group’s main short- and long-term
objectives and reflect both financial and non-financial
priorities, as appropriate.
The Committee considers that EPS (currently used in both the
short- and long-term incentive) is an objective and well-accepted
measure of the Company’s performance which reinforces the
strategic objective of achieving profitable growth, whilst a focus
on Total Accounting Return (also currently used in both the
short- and long-term incentive) is consistent with one of our
stated objectives and a key indicator of Company performance in
the real estate sector. The use of relative TSR is strongly aligned
with shareholders and ensures that Executives are rewarded
only if they exceed the returns which an investor could achieve
elsewhere in our sector. Finally, from 2022, the Committee has
increased the overall weighting on sustainability metrics across
variable incentives in order to support and reinforce the Group’s
strategy in this area.
Targets applying to the Performance Related Annual Bonus
and LTIP are reviewed annually, based on a number of internal
and external reference points. Performance targets are set
to be stretching but achievable, with regard to the particular
strategic priorities and economic environment in a given
year. Under the bonus, target performance typically requires
meaningful improvement on the previous year’s outturn, and,
for financial measures, targets are typically set with reference
to market consensus.
Remuneration Policy for other employees
Unite Group’s approach to annual salary reviews is
consistentacross the Group, with consideration given to the
level of experience, responsibility, individual performance and
salary levels in comparable companies. The Company is a fully
accredited Living Wage employer.
In terms of variable incentives, all employees are eligible to
participate in an annual bonus scheme with business area-
specific metrics incorporated where appropriate. Senior
managers are eligible to participate in the LTIP with annual
awards currently up to 100% of salary. Performance conditions
are consistent for all participants, while award sizes vary by
level. Specific cash incentives are also in place to motivate,
reward and retain staff below Board level.
All employees are eligible to participate in the Company’s SAYE
scheme on the same terms.
Shareholding guidelines
The Committee continues to recognise the importance of
Executive Directors aligning their interests with shareholders
through building up a significant shareholding in the Company.
Shareholding guidelines are in place that require Executive
Directors to acquire a holding (excluding shares that remain
subject to performance conditions) equivalent to 250% of base
salary for the Chief Executive and 200% of base salary for each of
the other Executive Directors. Details of the Executive Directors’
current shareholdings are provided in the Annual Report
onRemuneration.
In order to provide further long-term alignment with shareholders
and ensure a focus on successful succession planning, Executive
Directors will normally be expected to maintain a holding of Unite
shares for a period after their employment as a Director of the
Group. This ‘post-exit’ shareholding guideline will be equal to
the lower of a Directors’ actual shareholding at the time of their
departure and the shareholding requirement in effect at the date
of their departure, with such shares to be held for a period of
at least two years from the date of ceasing to be a Director. The
specific application of this shareholding guideline will be at the
Committee’s discretion.
In order to monitor and enforce the post-exit shareholding
requirement, the Committee has established an internal policy
document detailing which shares are covered, the valuation
methodology, the holding mechanism and any discretions
available. In summary, this post-exit requirement will apply to
any LTIP awards or deferred bonus share awards granted on or
after 9 May 2019 (being the date of approval of the 2019 Policy),
with shares deposited into a Nominee Account until such time
that the required post-exit shareholding level has been achieved
(calculated annually). Shares held in the Nominee Account will
generally be held for a period of not less than two years from the
date an individual ceases employment as a Director of the Group.
Malus and clawback
Awards under the Performance Related Annual Bonus and the
LTIP are subject to malus and clawback provisions which can
be applied to both vested and unvested awards. Malus and
clawback provisions will apply for a period of at least two years
post-vesting. Circumstances in which malus and clawback may
be applied include a material misstatement of the Company’s
financial accounts, gross misconduct on the part of the award-
holder, error in calculating the award vesting outcome and,
from 2019 awards onwards, corporate failure as determined
by the Remuneration Committee.
140
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Non-Executive Director remuneration
Subject to annual re-election by shareholders, Non-Executive Directors are appointed for an initial term of approximately
threeyears. Subsequent terms of three years may be awarded. The appointment, reappointment and the remuneration of
Non-Executive Directors are matters reserved for the full Board.
The Non-Executive Directors are not eligible to participate in the Company’s performance-related bonus plan, Long-Term
Incentive Plans or pension arrangements.
Details of the policy on fees paid to our Non-Executive Directors are set out in the table below:
NED Date of service contract
R Paterson 21 September 2017
I Beato 20 July 2018
S Pearce 14 October 2019
T Jackson 29 November 2019
S Smith 14 October 2019
R Huntingford 26 October 2020
N Dulieu 5 August 2022
A Jain 15 May 2023
Function Operation Opportunity
Performance
metrics
Fees
To attract and retain Non-
Executive Directors of the
highest calibre with broad
commercial and other
experience relevant to
theCompany.
Fee levels are reviewed annually, with
any adjustments typically effective
1January in the year following review.
The fees paid to the Chair are
determined by the Committee,
whilst the fees of the Non-Executive
Directors are determined by
theBoard.
Additional fees are payable for
acting as Senior Independent
Director and as Chair of any of the
Board’s Committees (Audit & Risk,
Remuneration, Nomination, Health
&Safety, Sustainability).
Fee levels are benchmarked against
sector comparators and FTSE-
listed companies of similar size and
complexity. Time commitment and
responsibility are taken into account
when reviewing fee levels.
Expenses incurred by the Chair and
the Non-Executive Directors in the
performance of their duties (including
taxable travel and accommodation
benefits) may be reimbursed or
paid for directly by the Company,
asappropriate.
Non-Executive Director fee increases
are applied in line with the outcome
of the annual fee review. Fees for
the year commencing 1 January 2024
are set out in the Annual Report
onRemuneration.
It is expected that increases to Non-
Executive Director fee levels will be in
line with salaried employees over the
life of the policy. However, in the event
that there is a material misalignment
with the market or a change in the
complexity, responsibility or time
commitment required to fulfil a Non-
Executive Director role, the Board has
discretion to make an appropriate
adjustment to the fee level.
None
141
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Pay for performance scenarios
The charts below provide an illustration of the potential future reward opportunities for the Executive Directors, and the potential
split between the different elements of remuneration under four different performance scenarios: ‘Minimum’, ‘On-target’,
‘Maximum’ and ‘Maximum including the impact of a 50% share price appreciation on LTIP awards’.
Potential reward opportunities are based on Unite Group’s Remuneration Policy, applied to the base salaries effective 1 January
2024. The annual bonus and LTIP are based on the maximum opportunities set out under the Remuneration Policy, being 140%
of salary under the annual bonus and a 2024 LTIP grant of 200% of salary. Note that the LTIP awards granted in a year do not
normally vest until the third anniversary of the date of grant, and the projected value is based on the face value at award rather
than vesting (i.e. the scenarios exclude the impact of any share price movement over the period). The exception to this is the last
scenario which, in line with the requirements of the UK Corporate Governance Code, illustrates the maximum outcome assuming
50% share price appreciation for the purpose of LTIP value.
Remuneration (£’000)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Salary, pension, benefits Annual bonus LTIP
Mike BurtJoe Lister
Minimum On-target Maximum Maximum + 50%
share price inc.
for LTIP
Minimum On-target Maximum Maximum + 50%
share price inc.
for LTIP
£691
100.0% 48.7%
29.9%
21.4%
25.1%
30.8%
44.1%
20.6%
25.3%
54.2%
100.0% 49.0%
29.7%
21.2%
25.3% 20.8%
30.7%
25.2%
43.9%
54.0%
£1,419
£2,754
£3,361
£454
£927
£1,793
£2,187
The ‘Minimum’ scenario reflects base salary, pension and benefits (i.e. fixed remuneration) which are the only elements of the
Executive’s remuneration packages not linked to performance.
The ‘On-target’ scenario reflects fixed remuneration as above, plus bonus payout of 70% of salary and LTIP threshold vesting
at25% of maximum award (50% of salary).
The ‘Maximum’ scenario is shown on two bases: excluding and including the impact of share price appreciation on the value of
LTIP outcomes. In both cases, the scenario includes fixed remuneration and full payout of all incentives (140% of salary under
the annual bonus and 200% of salary under the LTIP), with the final scenario also including the impact of a 50% increase in Unite
Group’s share price on the value of the LTIP (in effect, valuing this element of pay at 300% of salary).
Salary
Benefits
(based on FY23) Pension
2024 maximum
annual bonus
2024 LTIP award
face value
CEO £606,900 £17,068 11% of salary 140% of salary 200% of salary
CFO £393,750 Same as above 11% of salary 140% of salary 200% of salary
142
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Approach to recruitment remuneration
External appointment to the Board
In the cases of hiring or appointing a new Executive Director from outside the Company, the Remuneration Committee may make
use of all the existing components of remuneration, as follows:
In determining appropriate remuneration, the Remuneration Committee will take into consideration all relevant factors (including
quantum, nature of remuneration and the jurisdiction from which the candidate was recruited) to ensure that arrangements are in
the best interests of both Unite Group and its shareholders. The Committee may make an award in respect of a new appointment to
‘buy out’ incentive arrangements forfeited on leaving a previous employer on a like-for-like basis, which may be awarded in addition
to the remuneration structure outlined in the table above. In doing so, the Committee will consider relevant factors including time
to vesting, any performance conditions attached to these awards and the likelihood of those conditions being met. Any such ‘buy-
out’ awards will typically be made under the existing annual bonus and LTIP schemes, although in exceptional circumstances the
Committee may exercise the discretion available under Listing Rule 9.4.2 R to make awards using adifferent structure. Any ‘buy-out’
awards would have a fair value no higher than the awards forfeited.
Internal promotion to the Board
In cases of appointing a new Executive Director by way of internal promotion, the Remuneration Committee and Board will be
consistent with the policy for external appointees detailed above. Where an individual has contractual commitments made prior
to their promotion to Executive Director level, the Company will continue to honour these arrangements. With regards to pension
contributions, as above, this would be aligned to that offered to a majority of employees across the Group at the time of promotion
to the Board. The Remuneration Policy for other employees is set out on page 140. Incentive opportunities for below Board
employees are typically no higher than Executive Directors, but measures may vary to provide better line-of-sight.
Non-Executive Directors
In recruiting a new Non-Executive Director, the Remuneration Committee will utilise the policy as set out in the table on page141.
A base fee in line with the prevailing fee schedule would be payable for Board membership, with additional fees payable for acting
as Senior Independent Director and/or as Chair of the Board’s Committees.
Component Approach Maximum annual grant value
Base salary The base salaries of new appointees will be determined by reference
to relevant market data, experience and skills of the individual, internal
relativities and their current basic salary. Where new appointees have
initial basic salaries set below market, any shortfall may be managed
with phased increases over a period of two to three years subject to
the individual’s development in the role.
Pension New appointees will receive Company pension contributions – or an
equivalent cash supplement – aligned to that offered to a majority of
employees across the Group at the time of appointment (currently
11% of salary).
Benefits New appointees will be eligible to receive benefits which may include
(but are not limited to) the provision of a company car or cash
alternative, private medical insurance and any necessary relocation
expenses. New appointees will also be eligible to participate in all-
employee Share Schemes.
SAYE
Performance Related
Annual Bonus
The structure described in the policy table will apply to new
appointees with the relevant maximum being pro-rated to reflect the
proportion of employment over the year. Targets for the individual
element will be tailored to each Executive.
140% of salary
LTIP New appointees will be granted awards under the LTIP on the same
terms as other Executives, as described in the policy table. The normal
aggregate limit of 200% of salary will apply, save in exceptional
circumstances where up to 300% of salary may be awarded.
300% of salary
143
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Service contracts and treatment for leavers and change of control
Executive Director service contracts, including arrangements for early termination, are carefully considered by the Committee.
In accordance with general market practice, each of the Executive Directors has a rolling service contract requiring 12 months’
notice of termination on either side. Such contracts contain no specific provision for compensation for loss of office, other
than an obligation to pay for any notice period waived by the Company, where pay is defined as salary, benefits and any other
statutory payments only. Where a payment is made in equal monthly instalments, the Committee will expect the Director to
mitigate his/her losses by undertaking to seek and take up, as soon as reasonably practicable, any suitable/similar opportunity
to earn alternative income over the period in which the instalments are to be made. The instalment payments will be reduced
(including to zero) by the amount of such income that the employee earns and/or is entitled to earn over the applicable period.
Executive Director service contracts are available to view at the Company’s registered office.
The Remuneration Committee will exercise discretion in making appropriate payments in the context of outplacement, settling legal
claims or potential legal claims by a departing Executive Director, including any other amounts reasonably due to the Executive
Director, for example to meet the legal fees incurred by them in connection with the termination of employment, where the
Company wishes to enter into a settlement agreement and the individual must seek independent legal advice.
When considering exit payments, the Committee reviews all potential incentive outcomes to ensure they are fair to both
shareholders and participants. The table below summarises how the awards under the annual bonus and LTIP are typically
treated in specific circumstances, with the final treatment remaining subject to the Committee’s discretion:
Executive
Date of
service contract
 J Lister 1 January 2024
M Burt 1 January 2024
R Smith 28 September 2011
Calculation of vesting/payment
Annual bonus
Cash element In the event of retirement, ill health, death, disability, redundancy or any other circumstance at
the discretion of the Remuneration Committee, or in the event of a change of control, Executive
Directors may receive a bonus payment for the year in which they cease employment. This payment
will normally be pro-rated for time and will only be paid to the extent that financial and individual
objectives set at the beginning of the plan year have been met.
Otherwise, Executive Directors must be employed at the date of payment to receive a bonus.
Deferred element Deferred bonus shares will normally be retained and will be released in full following completion
ofthe applicable deferral period.
LTIP
Leavers before the end of the
performance period
In the event of retirement, ill health, death, disability, redundancy or any other circumstance at the
discretion of the Remuneration Committee, or in the event of a change of control, the Committee
determines whether and to what extent outstanding awards vest based on the extent to which
performance conditions have been achieved and the proportion of the vesting period worked. This
determination will be made as soon as reasonably practical following the end of the performance
period or such earlier date as the Committee may agree (within 12 months in the event of death).
In the event of a change of control, awards may alternatively be exchanged for new equivalent
awards in the acquirer where appropriate.
If participants leave for any other reason before the end of the performance period, their award
willnormally lapse.
Leavers after the end
of the performance period
Any awards in a holding period will normally vest following completion of the holding period.
14 4
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
External appointments
With the approval of the Board in each case, and subject to the
overriding requirements of the Group, Executive Directors may
accept external appointments as Non-Executive Directors of
other companies and retain any fees received. Joe Lister was
appointed as a Non-Executive Director on the Board of Helical
Plc effective 1 September 2018 and received a fee of c.£62k in
respect of his service for 2023. Richard Smith was appointed
as a Non-Executive Director on the Board of Industrials REIT
(formerly Stenprop Limited) effective 4 November 2020 and
received a fee of c.34k in respect of his service for 2023.
Consideration of conditions elsewhere in the Company
When making decisions on Executive Director remuneration,
the Committee considers pay and conditions across Unite
and reflects on available data such as the Gender Pay
Gapreporting and the CEO pay ratio analyses. Prior to the
annualsalary review, the Group People Director provides the
Committee with a summary of the proposed level of increase
for overall employee pay. The Remuneration Committee did
not formally consult with employees in designing the above
Executive Remuneration Policy. The Culture Matters forum,
launched in October 2021 and attended by the employee
engagement NED, will, in future, provide the Board and
Committee with a greater opportunity to solicit the views of
employees on remuneration structures and processes across
the Group. Specifically, this forum will include as part of its
agenda an opportunity to discuss remuneration issues, answer
any questions around pay practices, and to explain to the
workforce how Executive pay arrangements align with the
wider pay policy.
Consideration of shareholder views
In designing the current policy, the Remuneration Committee
consulted with Unite Group’s top 20 investors and with proxy
advisers (Glass Lewis, the Investment Association and ISS) to
seek their views on proposed changes, as well as remuneration
at Unite Group more broadly. The Committee thanks investors
taking the time to participate in the consultation and we
welcomed the positive and constructive feedback received.
TheCommittee used this feedback, along with updates to
investor body principles published around the time of the
review, to refine and further develop the final proposals. The
Committee will continue to monitor trends and developments
in corporate governance and market practice to ensure the
structure of the Executive remuneration remains appropriate.
145
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Annual Report on Remuneration
The following section provides details of how Unite
Group’s Remuneration Policy was implemented during the
financial year ended 31 December 2023, and how it will be
implementedin 2024.
Remuneration Committee membership in 2023
The primary role of the Committee is to:
Review, recommend and monitor the level and structure
of remuneration for the Executive Directors and other
seniorExecutives.
Approve the remuneration packages for the Executive
Directors and ensure that pay outcomes reflect the
performance of the Company.
Determine the balance between base pay and performance-
related elements of the package so as to align Directors’
interests to those of shareholders.
The Committee’s terms of reference are set out on
the Company’s website. As of 31 December 2023, the
Remuneration Committee comprised four independent
Non-Executive Directors.
Nicky Dulieu (Committee Chair from 1 March 2023)
Ross Paterson
Dame Shirley Pearce
Professor Sir Steve Smith
Elizabeth McMeikan served as Committee Chair until 28
February 2023. Certain Executives, including Richard Smith,
JoeLister and Helene Murphy (Group People Director), are
invited to attend meetings of the Committee, and the Company
Secretary, Christopher Szpojnarowicz, acts as secretary to
the Committee. Richard Huntingford and Thomas Jackson are
also invited to attend meetings. No individuals are involved in
decisions relating to their own remuneration. The Remuneration
Committee convened five times during the year and details of
members’ attendance at meetings are provided in the Corporate
Governance section on page 102.
Key activities of the Remuneration Committee in 2023 included:
Reviewed the Executive Directors’ performance against 2020
LTIP targets and approved final vesting.
Approved the Directors’ Remuneration Report for 2022.
Determined the Executive Directors’ bonus and LTIP
performance targets for 2023 in line with the strategic plan
and approved grant of awards under the LTIP in April 2023.
Approved implementation of delayed salary increases for
Executive Directors with effect from 1 July 2023.
Considered and approved the leaver arrangements for
Richard Smith.
Considered and approved remuneration arrangements for
Joe Lister and Mike Burt in their new roles.
Continued to monitor remuneration market trends and
corporate governance developments.
Reviewed the CEO pay ratio and gender pay data
anddisclosures.
Considered feedback from the Culture Matters forum.
Commenced a review of the fee payable to the Board Chair.
Commenced preparation of the 2023 Directors’
Remuneration Report.
Advisers
Ellason LLP was appointed as the independent remuneration
adviser to the Committee effective 1 January 2021 and retained
during the year. The Committee undertakes due diligence
periodically to ensure that Ellason is independent and that
the advice provided is impartial and objective. During 2023,
Ellason provided independent advice including updates on the
external remuneration environment, guidance on the leaver
arrangements for Richard Smith and on the remuneration
arrangements of the new CEO and CFO, performance testing
for Long-Term Incentive Plans and Directors’ Remuneration
Report drafting support. Ellason reports directly to the Chair
of the Remuneration Committee and does not advise the
Company on any other issues. Their total fees for the provision
ofremuneration services to the Committee in 2023 were
£42,823 (2022: £37,050) on the basis of time and materials.
Ellason is a member and signatory of the Code of Conduct
for Remuneration Consultants, details of which can be found
at www.remunerationconsultantsgroup.com. None of the
individual Directors have a personal connection with Ellason.
146
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Summary of shareholder voting at AGMs
The following table shows the results of the advisory vote on the 2022 Annual Report on Remuneration at the 2023 AGM and
thebinding vote on the Directors’ Remuneration Policy at the 2022 AGM:
Single total figure of remuneration for Executive Directors (audited)
The table below sets out a single figure for the total remuneration received for 2022 and 2023 by each Executive Director who
served in the year ended 31 December 2023:
1. Salaries for 2023 reflect the additional mid-year increase approved by the Committee with effect from 1 July 2023, as detailed on page 128.
2. Taxable benefits for 2023 consist primarily of company car or car allowance and private health care insurance. The figures above include car benefits of £15,000 for
Messrs. Smith and Lister.
3. Pension figures include contributions to the UNITE Group Personal Pension Scheme and cash allowances, where applicable. Pension contributions were reduced to
a maximum of 11% of salary with effect from 1 January 2023.
4. Annual bonus figures reflect the full amount earned in respect of the relevant financial year, including any amounts which are required to be deferred.
5. 2022 figures: Vesting of 2020 awards was confirmed as 18.7% of maximum following the publication of comparator full-year results. The LTIP figures shown are
based on the market price on the date of vesting (23 April 2023) of 940.0p. These amounts have been revised upwards from last year’s report to reflect the positive
final vesting outcome.
2023 figures: For the 2021 awards, vesting of the relative TAR element will be finalised following the publication of comparator results over the coming months,
with Unite Group currently estimated to rank above upper quartile. Overall anticipated vesting of the 2021 awards used in this single figure is therefore 76.0% of
maximum. Similarly, the market price on the date of vesting for these awards is currently unknown and so the value shown is estimated using the average market
value over the last quarter of 2023 of 952.3p. See following sections for further details. The value of the vested 2021 awards shown reflects the impact of a c.13%
fall in the vesting share price compared to the share price at grant and therefore none of the value shown is attributable to share price appreciation.
For both 2022 and 2023, LTIP figures include the value of dividends for vested awards which will be paid as additional shares (estimated, where relevant). Awards
inthe form of HMRC-approved options are valued based on the embedded gain at vesting (i.e. subtracting the applicable exercise price) and attract no dividends.
6. Other’, includes the embedded value of SAYE/Sharesave options at grant.
2022 Annual Report on Remuneration Directors’ Remuneration Policy
For (including discretionary) 352,941,199 98.64% 357,032,859 97.83%
Against 4,856,647 1.36% 7,905,945 2.17%
Total votes cast (excluding withheld votes) 357,797,846 364,938,804
Votes withheld 1,765,182 1,761,682
Total votes cast (including withheld votes) 359,563,028 366,700,486
Salary
Taxable
benefits Pension
Annual
bonus LTIP Other
Total single
figure Total fixed
Total
variable
£ Note 1 Note 2 Note 3 Note 4 Note 5 Note 6
R Smith 2023 558,088 16,241 53,238 429,727 682,670 0 1,739,964 627,567 1,112,397
2022 522,500 16,123 59,550 263,340 216,584 4,498 1,082,595 598,173 484,422
J Lister 2023 431,794 17,068 38,734 332,482 555,499 2,318 1,377,895 487,596 890,299
2022 411,250 16,854 46,918 207,270 176,263 0 858,555 475,022 383,533
147
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received for 2022 and 2023 by each Non-Executive Director
who served in the year ended 31 December 2023:
1. Relevant changes in Non-Executive Directors and responsibilities as follows:
i. Elizabeth McMeikan retired from the Board on 28 February 2023.
ii. Reflecting the Relationship Agreement with CPPIB Holdco, Thomas Jackson does not receive any fees in respect of his Non-Executive Director position
withUnite Group.
iii. Nicky Dulieu joined the Board on 1 September 2022 and took up the roles of Senior Independent Director and Chair of the Remuneration Committee with effect
from 1 March 2023. An administrative error, which resulted in an overpayment of fees in 2022, has since been corrected and is reflected as a deduction to the
single figure for 2023.
iv. Angela Jain joined the Board as a Non-Executive Director on 1 August 2023.
2. Taxable benefits relate primarily to certain travel expenses.
£ Base fee
Committee Chair/
SID fees
Taxable
benefits
Total
single figure
Note 1 Note 2
R Huntingford 2023 238,703 95 238,798
2022 231,750 231,750
E McMeikan
(i)
2023 8,742 2,846 11,588
2022 50,925 16,595 269 67,789
R Paterson 2023 52,453 10,900 63,353
2022 50,925 10,600 39 61,564
I Beato 2023 52,453 40 52,493
2022 50,925 45 50,970
S Pearce 2023 52,453 10,900 63,353
2022 50,925 10,600 45 61,570
T Jackson
(ii)
2023
2022
S Smith 2023 52,453 10,900 19 63,372
2022 50,925 10,600 50 61,575
N Dulieu
(iii)
2023 48,920 14,229 63,149
2022 20,508 20,508
A Jain
(iv)
2023 21,855 21,855
148
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Incentive outcomes for the year ended 31 December 2023 (audited)
Annual bonus in respect of 2023 performance
The maximum bonus opportunity for each Executive Director in 2023 was 140% of base salary, with Threshold and On-target
performance paying 30% and 50% of maximum respectively, under each performance measure. The 2023 annual bonus was
based on an additive combination of financial (weighted 70%) and non-financial (30%) metrics. Further details, including the
targets set and performance against each of the metrics, are provided in the tables below:
The Committee notes in particular the strong outcomes under both the customer satisfaction and university reputation metrics, with
both delivering a full payout for 2023. In the case of the latter, acknowledging the significant outperformance of the range, the
Committee revisited its process for setting the targets to ensure that the final outcome was justified. It was noted that external
guidance at the time of setting the targets had suggested that a recovery to previous levels would be a multiple-year process, and
a range of key actions had been agreed including professional development plans for teams leading on the relationships front.
Feedback from our university partners in the 2023 survey was very positive citing proactive engagement and our strong student
focus and support offerings. With this context in mind, the Committee supported the overall outcomes and considers that the
outperformance of the target range – and record outcome for this measure – is a direct result of the teams’ hard work and their
dedication to Unite’s stakeholders.
Prior to finalising the annual bonus outcome, the Committee received a detailed report from Professor Sir Steve Smith, Chair
of the Health & Safety Committee, which reviewed the Group’s operational incident and fire safety performance during 2023,
provided an update on the cladding remediation programme and associated safety metrics, and noted the continued investment
in Unite Group’s Safety Centre of Excellence, with further improvements to overall reporting culture and the speed at which any
issues arising are addressed. The Committee’s conclusion aligned with that in the report, namely that the Executive team has
continued to promote a culture of openness and transparency around health and safety matters, and has worked proactively
toaddress challenges faced to ensure that health and safety remains Unite Group’s number one priority.
Having taken the above into account, the Committee is satisfied that the overall bonus outcome of 77.0% of salary (cf. a
maximum of 140% of salary) in respect of 2023 is appropriate. In line with the policy, 50% of the annual bonuses earned
byExecutive Directors will be satisfied in Unite shares, deferred for two years.
Threshold On-target Maximum
Measure Weight 30% of max 50% of max
100% of
max Actual
Outcome
(% of max)
Financial
(70%)
Adjusted EPRA EPS 25.0% 42.0p 44.0p 46.0p 44.3p 57.5%
TAR per share 25.0% 64.5p 73.5p 83.5p 26.5p 0.0%
Loan to Value 20.0% 35.0% 34.0% 32.0% 28.0% 100.0%
Non-financial
(30%)
Customer satisfaction 7.5% 38 40 42 42 100.0%
University reputation 7.5% 11 13 15 32 100.0%
GRESB rating 7.5% 84 85 87 86 75.0%
Employee engagement 7.5% 73 75 77 70 0.0%
Executive
Overall outcome
(% of maximum)
Overall outcome
(% of salary)
Overall outcome
(£)
Richard Smith 55.0% 77.0% £429,727
Joe Lister 55.0% 77.0% £332,482
149
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Confirmation of 2020 LTIP vesting (vested on performance to 31 December 2022)
In last year’s report, the Committee provided an estimate for the vesting of the 2020 LTIP awards based on relative TAR after
two years of the performance period. Following the publication of TAR results by comparators with March 2023 year-ends, the
Committee was able to assess this element of the LTIP, with Unite’ Group’s TAR of 14.9% coming in between median (+4.2%) and
upper quartile (+29.8%) over the full three-year performance period. The resulting vesting outcome was 56.2% of maximum for the
relative TAR element which, when combined with the outcomes for the relative TSR (0% of maximum) and EPS (0% of maximum)
elements, resulted in an overall vesting outcome for the 2020 LTIP of 18.7% of maximum. The Committee was satisfied that this
modest positive vesting result was supported by broader underlying Group performance, and accordingly applied no discretion
in respect of the outcome.
2022 values included in the single figure of remuneration table for both Richard Smith and Joe Lister have been updated to reflect
the revised number of shares vesting, as well as the actual share price on 23 April 2023 of 940.0p.
2021 LTIP vesting (vested on performance to 31 December 2023)
Awards in 2021 were made under the LTIP, consisting of the Unite Group Performance Share Plan (PSP) and the Unite Group Approved
Employee Share Option Scheme (ESOS). Vesting of the awards was dependent on three equally-weighted measures over a three-
year performance period: absolute EPS, relative TSR and relative TAR, with Unite Group’s performance for both the TSR and TAR
elements compared to the constituents of the FTSE 350 Real Estate Supersector Index. There was no retest provision. Further
details, including vesting schedules and performance against each of the metrics, are provided in the table below.
Vesting of the relative TAR element will be finalised following the publication of comparator results over the coming months,
withUnite Group currently estimated to rank above upper quartile, equating to full vesting under this element, and 76.0% vesting
overall. No discretion has been exercised in respect of the 2021 LTIP to-date; the Committee will confirm this position once final
vesting of the relative TAR element has been approved later in 2024.
Executive Interests held Confirmed vesting % Interests vesting Date vesting
Richard Smith 118,129
18.7%
22,089
23 April 2023
Joe Lister 96,256 17,999
Measure Weight Targets Outcome Vest %
2023 Adjusted EPRA EPS 1/3 0% vesting below 44.0p
25% vesting for 44.0p
100% vesting for 51.5p or more;
Straight-line vesting between these points
44.3p 28.0%
TSR ranking vs. constituents
of theFTSE 350 Real Estate
SupersectorIndex
1/3 0% vesting below median
25% vesting for performance in line with median
100% vesting for performance in line with upper
quartile or above;
Straight-line vesting between these points
5.9%:
above upper
quartile
100.0%
TAR ranking vs. constituents
of theFTSE 350 Real Estate
SupersectorIndex
1/3 0% vesting below median
25% vesting for performance in line with median
100% vesting for performance in line with upper
quartile or above;
Straight-line vesting between these points
Estimated:
above upper
quartile
Estimated:
100.0%
Total estimated LTIP vesting (sum product of weighting and vest %) 76.0%
15 0
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
In line with reporting regulations, the value disclosed above and in the single total figure of remuneration table on page 147
captures the estimated full number of interests vesting (i.e. excluding the two-year holding period). As the market price on the
date of vesting is unknown at the time of reporting, the value is estimated using the average market value over the last quarter
of2023 of 952.3p. Values will be trued-up in the 2024 Annual Report on Remuneration to reflect actual relative TAR vesting and
the actual share price at the date of vesting for these awards.
The estimated values include the impact of a c.13% fall in the assumed market price compared to the share price at grant
(1,083.5p). Executives also became entitled to additional shares representing the dividends payable on vested LTIP shares
over the three-year performance period. The estimated value of these additional shares is included in the row entitled ‘LTIP’
in the single total figure of remuneration table on page 147, and equates to £52,508 and £42,727 for Messrs. Smith and Lister
respectively. Actual dividends payable will be determined on finalising vesting of the TAR element of awards.
Percentage change in remuneration of Directors and employees
This table is produced in accordance with the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report)
Regulations 2019 and shows the change in remuneration of Unite Directors and employees over time.
Executive Director remuneration includes base salary, taxable benefits and annual bonus (where eligible). Non-Executive Director
remuneration includes base fee and any additional fees paid, and taxable benefits. Data is shown on a full-time equivalent basis
and growth rates are based on a consistent set of employees, i.e. the same individuals appear in the 2023 and 2022 populations
for the 2023 analysis and so on.
Executive
Interests
held
Estimated
vesting %
Estimated
interests
vesting
Date
vesting
Assumed
market
price
Estimated
value...
... of which,
value due
to share
price
growth
Note 1 Note 2
Richard Smith 87,549 76.0% 66,537 After TAR
assessment
(June/July)
952.3p £682,670 N/A
Joe Lister 71,329 54,210 £555,499 N/A
Basic salary/total fee Taxable benefits Annual bonus
Director
Note 1 Note 2 Note 3
2023 2022 2021 2020 2023 2022 2021 2020 2023 2022 2021 2020
R Smith 6.8% 10.6% 11.1% (6.9)% 0.7% (6.5)% 6.4% 0.0% 63.2% (45.7)% n/m (100.0)%
J Lister 5.0% 7.0% 11.1% (6.9)% 1.3% (2.4)% (1.3)% 3.4% 60.4% (47.5) % n/m (100.0)%
R Huntingford 3.0% 28.0% 266.3% N/A N/A (100.0)% n/m N/A N/A N/A N/A N/A
E McMeikan 3.0% 3.0% 11.1% ( 7.3)% (100.0)% 589.6% (70.5)% (60.2)% N/A N/A N/A N/A
R Paterson 3.0% 3.0% 11.1% (7.3)% (100.0)% 1,190.0% (71.1)% 100.0% N/A N/A N/A N/A
I Beato 3.0% 3.0% 11.1% (7. 3) % (11.1)% 1,400.0% n/m (100.0)% N/A N/A N/A N/A
S Pearce 3.0% 6.6% 29.7% (7. 3) % (100.0)% 1,400.0% (71.1)% 100.0% N/A N/A N/A N/A
T Jackson N/A N/A N/A N/A n/m (100.0)% n/m N/A N/A N/A N/A N/A
S Smith 3.0% 3.0% 17.0% N/A (62.6)% 2.0% n/m N/A N/A N/A N/A N/A
N Dulieu 24.0% N/A N/A N/A n/m N/A N/A N/A N/A N/A N/A N/A
A Jain N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
All employees 11.6% 3.6% 2.9% 4.4% 6.1% 3.2% 2.3% 2.3% 87.7% (52.8)% 285.0% (67.8)%
1. Changes in Directors and responsibilities during the 2022 and 2023 financial years which are relevant to the calculations above are as follows:
Elizabeth McMeikan retired from the Board with effect from 28 February 2023.
Nicky Dulieu joined the Board with effect from 1 September 2022 and took on the roles of Senior Independent Director and Chair of the Remuneration Committee
with effect from 1 March 2023.
Angela Jain joined the Board with effect from 1 August 2023.
2. For Executive Directors, taxable benefits consist primarily of company car or car allowance and private health care insurance. For Non-Executive Directors, taxable benefits
relate primarily to certain travel expenses and accommodation which, given the relatively small numbers involved, can produce sizeable percentage changes from year to year.
3. The figures shown are reflective of any bonus earned during the respective financial year. Non-Executive Directors are not eligible to participate in the annual
bonusscheme.
1. In each case, interests held includes 479 HMRC-approved options under the ESOS.
2. Estimated value of HMRC-approved options is based on embedded gain (i.e. after subtracting 1,083.5p exercise price). Value includes the accumulated dividends on
vested shares.
151
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Relative importance of spend on pay
The table below shows shareholder distributions (i.e. dividends and share buybacks) and total employee pay expenditure for the
financial years ended 31 December 2022 and 31 December 2023, along with the percentage change in both.
Distributions to shareholders reflects actual payments made during the relevant financial year. Employee remuneration excludes
social security costs.
Relationship between the remuneration of the CEO and all employees
There is strong alignment between the Company’s approach to remuneration for Executive Directors and other employees
(seepage 153 for details).
Consistent with previous years, given the significant undertaking required to calculate the single figure of remuneration for all
UK employees, the Committee opted to use data already available from the gender pay reporting as the basis for identifying
employees at P25, P50 and P75 (‘Option B’). We believe this provides a reasonable estimate for employees’ pay at these levels
within the organisation. Further details on the specific steps used in calculating the above ratios are as follows:
We used the most recent gender pay gap data from 5 April 2023 to rank the hourly rates of all UK employees. From this initial
ranking we identified those individuals positioned at P25, P50 and P75, as well as the immediate employees either side of P25,
P50 and P75.
Employees selected as P25, P50 and P75 were checked to confirm that they were employed for the whole of the 2023 financial year.
Total FTE remuneration for each of these individuals was then calculated to 31 December 2023 on the same basis as used in the
single figure table for our CEO. All figures are total amounts paid to full-time employees covering the whole 2023 financial year.
Overtime pay, where received during the year, has been excluded so that the figures are comparable with the Chief Executive.
In reviewing the employee pay data, the Committee is comfortable that the P25, P50 and P75 individuals identified
appropriately reflect the employee pay profile at those quartiles, and that the overall picture presented by the ratios is
consistent with our pay, reward and progression policies.
The Committee notes that the statutory CEO pay ratios have increased in 2023 as compared to 2022, with, for example, the ratio
of CEO total remuneration to the median employee increasing from 42:1 to 54:1. This year-on-year change is principally driven by
the strong estimated vesting under the 2021 LTIP which, at 76.0%, is markedly higher than for the 2020 LTIP (18.7%).
Reflecting that a significant proportion of the CEO’s remuneration is linked to Group performance and share price movements
over the longer-term, and that, as a result, changes in the headline ratios may be volatile, the Committee also reviews ratios for
salary and salary plus annual bonus. Participation in the Group’s long-term incentives is currently limited to c.60 senior leaders,
with none of the individuals identified as P25, P50 and P75 in this group. On the other hand, the significant majority of our
employees are eligible to participate in annual bonus arrangements – and so the Committee considers this ratio, as well as the
ratio comparing just salaries, to provide helpful additional context. The Committee notes, for example, that the ratio of median
employee salary to the CEO fell from 23:1 to 19:1 reflecting the tiered approach to salary increases last year and the substantial
Real Living Wage increase awarded to relevant individuals. Similarly, the ratio of median employee salary plus annual bonus to the
CEO was broadly flat between 2022 and 2023, recognising the similarity in outcomes under the schemes operated at all levels.
2023
£m
2022
£m
% change
2022–23
Total employee pay expenditure 75.7 65.8 15.0%
Distributions to shareholders 117. 3 96.4 21.7%
152
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Having reviewed the data points and associated context, the Committee is satisfied that the fluctuation in the headline ratios this
year reflects appropriate differences in the structure of remuneration at different levels of seniority.
1. 2022 CEO single figure of remuneration has been trued-up from last year’s report to reflect the final vesting outcome and actual market price on the date of
vesting for 2020 LTIP awards, with ratios updated accordingly.
CEO pay ratio 2023 2022
1
2021 2020 2019
Methodology used B B B B B
Average number of employees 1,859 1,889 1,900 1,756 1,450
Ratio of CEO single figure total
remuneration:
– To employee at the 25th percentile 71:1 48:1 58:1 44:1 113:1
– To employee at the 50th percentile 54:1 42:1 56:1 38:1 96:1
– To employee at the 75th percentile 48:1 29:1 43:1 29:1 70:1
Ratio of CEO base salary plus
annualbonusfigure:
– To employee at the 25th percentile 42:1 37:1 42:1 21:1 49:1
– To employee at the 50th percentile 32:1 32:1 40:1 18:1 41:1
– To employee at the 75th percentile 28:1 24:1 31:1 14:1 30:1
Ratio of CEO base salary figure:
– To employee at the 25th percentile 25:1 26:1 22:1 22:1 25:1
– To employee at the 50th percentile 19:1 23:1 22:1 19:1 21:1
– To employee at the 75th percentile 17:1 17:1 17:1 14:1 15:1
Additional details
CEO total single figure (£’000) 1,740 1,083 1,428 934 2,336
CEO base salary (£’000) 558 523 472 425 457
Employees’ total pay and benefits (£’000)
– at the 25th percentile 24.7 22.4 24.4 21.2 20.6
– at the 50th percentile 32.5 25.9 25.3 24.6 24.4
– at the 75th percentile 36.6 37.7 32.8 32.0 33.5
Employees’ base salary (£‘000)
– at the 25th percentile 21.9 20.0 21.1 19.6 18.1
– at the 50th percentile 28.8 23.2 21.8 22.6 21.7
– at the 75th percentile 32.2 30.4 28.5 29.4 29.6
153
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Review of past performance
The following graph charts the TSR of the Company and the FTSE 350 Real Estate Supersector Index over the ten-year period
from 1 January 2014 to 31 December 2023. Whilst there is no comparator index or group of companies that truly reflects
the activities of the Group, the FTSE 350 Real Estate Index (the constituent members of which are all property holding and/
or development companies or real estate investment trusts within the UK), was chosen as it reflects trends within the UK property
marketgenerally and tends to be the index against which analysts judge the performance of the Company. The table below
details the Chief Executive’s single figure remuneration over the same period.
£300
£350
£400
£250
£200
£150
£100
£50
£0
Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23
Unite FTSE 350 Real Estate Supersector Index
1. 2020 annual bonus scheme was cancelled for Executive Directors in April 2020.
2. 2022 CEO single figure of remuneration has been trued-up from last year’s report to reflect the final vesting outcome and market price on the date of vesting for
2020 LTIP awards.
3. 2023 CEO single figure and LTIP outcome are based on an estimate of the vesting of the TAR element, see page 150 for further details.
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
M Allan M Allan
M Allan
R Smith R Smith R Smith R Smith R Smith R Smith R Smith R Smith
Note 1 Note 2 Note 3
CEO single figure of
remuneration (£’000) £2,987 £2,382
£223
£1,239 £1,456 £2,131 £2,336 £934 £1,428 £1,083 £1,740
Annual bonus
outcome
(% of maximum) 89.4% 88.2%
N/A
43.4% 63.6% 74.3% 80.9% N/A 73.3% 36.0% 55.0%
LTIP outcome
(% of maximum) 95.2% 100.0%
N/A
100.0% 96.1% 81.9% 97.1% 33.33% 36.8% 18.7% 76.0%
154
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Scheme interests awarded in 2023 (audited)
LTIP
In April 2023, Executive Directors were granted awards under the LTIP with a face value of 200% of their respective salaries.
Anyawards vesting for performance will be subject to an additional two-year holding period.
1. Combination of HMRC-approved options under the ESOS (635) and nil-cost options under the PSP calculated using a share price of 943.5p, being the closing mid-
market price on the day the awards were calculated.
Vesting of these awards is dependent on the achievement of three-year performance targets set out in the table below.
No vesting below Threshold; straight-line vesting between Threshold and Stretch.
As noted in the 6 April 2023 market announcement, the adjusted EPRA EPS targets were set by the Committee having reviewed
a range of relevant internal and external reference points, including an updated five-year plan, market consensus estimates for
the Unite Group and the outlook for the broader UK real estate sector. In finalising the performance range – which is lower than
that used for the 2022 cycle – the Committee considered the Company’s development outlook, projections around the shape of
amarket recovery, the rising cost of funding and the net impact of price inflation on rental growth and the Company’s cost base.
The Committee retains overarching discretion under the Remuneration Policy to approve the vesting of these awards. Any payout
will be scrutinised by the Committee to ensure it reflects the underlying performance of the Company and the experience of
stakeholders over the period.
Deferred annual bonus
During the year, 50% of the annual bonuses earned by Executive Directors in respect of the 2022 financial year were satisfied in
Unite shares, deferred for two years:
SAYE
During 2023, Joe Lister entered into a new savings contract under the SAYE plan. Details of all outstanding awards under this plan
are included in the table on page 162.
Executive Date of grant
Shares over
which awards
granted
Market price at
date of award Face value
Note 1
Richard Smith
6 April 2023
114,581
943.5p
£1,081,072
Joe Lister 90,291 £851,896
Measure Weight
Threshold
(25% vesting)
Stretch
(100% vesting)
2025 adjusted EPRA EPS 28.0% 46.7 pence 48.5 pence
TSR ranking vs. constituents of the FTSE 350 Real Estate
Supersector Index (2023–2025) 28.0% In line with median
In line with upper
quartile
TAR per share ranking vs. constituents of the FTSE 350 Real Estate
Supersector Index (2023–2025) 28.0% In line with median
In line with upper
quartile
Operational energy intensity: cumulative reduction; 2025 vs. 2019
baseline (kWh/m
2
) 8.0%
9.4% cumulative
reduction
15.7% cumulative
reduction
EPC ratings: % of floorspace A–C rated in 2025 8.0% 91% of floorspace 97% of floorspace
Executive Date of grant
Shares over
which awards
granted
Market price at
date of award Date of vesting
Richard Smith
1 March 2023
13,838
951.5p 1 March 2025
Joe Lister 10,891
155
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Leaver arrangements for Richard Smith
Richard Smith stepped down from the Board with effect from 31 December 2023. He will remain as an adviser to the business until
3 October 2024 to ensure a smooth handover of responsibilities and to provide advisory support on Unite Group’s relationships
with Higher Education partners and government stakeholders. As noted in the Chair’s Statement on pages 127–130, the Committee
determined the remuneration arrangements for the outgoing CEO in line with the approved policy, as follows:
Richard will continue to receive base pay, pension and other contractual benefits until 3 October 2024, but he will not be
eligible to participate in the 2024 bonus, nor will he receive a 2024 long-term incentive award.
50% of the annual bonus earned by Richard in respect of the 2023 financial year will be satisfied in Unite shares, granted in
Q12024 and deferred for two years.
Richard’s outstanding Deferred Bonus Plan shares granted in February 2022 and March 2023 will continue to vest at the end
ofthe original deferral period and will be added to his nominee account to satisfy his post-exit shareholding requirement.
Richard will be treated as a ‘Good Leaver’ for the purposes of his outstanding 2021 PSP award. In accordance with the plan
rules, and reflecting that the end of his notice period in October 2024 falls after the third anniversary of grant, these 87,070 nil-
cost options will not be pro-rated for time. However, the number of awards ultimately vesting will be calculated in accordance
with the original performance conditions and will remain subject to the mandatory two-year holding period. Similarly, Richard
will be treated as a ‘Good Leaver’ for the purposes of his outstanding 2022 and 2023 PSP awards which will be pro-rated to
reflect the proportion of the period served between the respective dates of grant and the end of his notice period in October
2024 (equating to 77,075 and 56,765 nil-cost options, respectively). As above, the proportion of these awards which ultimately
vests will be calculated in accordance with the original performance conditions and the mandatory two-year holding period
will continue to apply. In all cases, the Committee will retain full discretion and will, in advance of each vesting date, consider
whether Richard remains a ‘Good Leaver’ or whether an alternative treatment should apply. All outstanding ESOS options
lapsed in full on 31 December 2023 to avoid complexities around the tax-advantaged status of the scheme.
Richard will be subject to a post-exit shareholding guideline in accordance with the policy.
Exit payments made in the year (audited)
There have been no exit payments during the year ended 31 December 2023.
Payments to past Directors (audited)
Details of the leaver arrangements for Richard Smith are detailed in the section above. There have been no payments (2022: £Nil)
in excess of the de minimis threshold to former Directors during the year ended 31 December 2023 in respect of their former
roles as Directors. The Company has set a de minimis threshold of £5,000 under which it would not report such payments.
Implementation of Executive Director Remuneration Policy for 2024
Base salary
Details of the starting salaries of Joe Lister and Mike Burt in their new roles are set out in the table below:
The average salary increase across the Group will be 8.8%. As in 2023, the Group will operate a tiered approach to salary
increases, with the majority of the budget targeted towards lower-paid colleagues. Unite Group maintains its commitment to
being an accredited Real Living Wage employer and, for relevant individuals, has implemented the rates set by the Living Wage
Foundation (10.0% in London and 10.1% across the rest of the UK).
Executive
Base salary from
1 January 2024
Joe Lister £606,900
Mike Burt £393,750
156
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Pension
Executive Directors will continue to receive a pension scheme contribution, a cash allowance of equivalent cost to the Company
or a combination of both. Total employer pension contributions are in line with the offering available to the wider employee
population at up to 11% of salary.
Annual bonus
For 2024, the maximum bonus opportunity for Joe Lister and Mike Burt will be 140% of salary, with threshold and target
performance paying 30% and 50% of maximum respectively under each performance measure.
The Committee remains satisfied that the overall blend of financial and non-financial measures supports the Group’s strategy
and reinforces Unite Group values. Minor changes have been made to some of the performance measures, as follows:
LTV has been replaced by net debt:EBITDA for 20% of the annual bonus; a measure which was previously used in the annual
bonus between 2015 and 2020. Although outcomes against the LTV measure have been strong in recent years, the new metric
is considered more motivational, with both elements of the ratio within management’s control. The change also reflects a
broader move to align Unite Group’s financial reporting with other operating businesses, with net debt:EBITDA intended to
bea primary KPI going forward.
As noted earlier in the report on page 129, the customer satisfaction measure will be changed to take into account year-round
performance as opposed to just at check-in. This change reinforces our commitment to student experience throughout their stay
with Unite Group and the importance of continual investment in the training, development and support of our frontlineteams.
The Higher Education reputation metric will be changed from net promoter score to a trust score; the latter being based on a
broader range of questions which measure our external perception with Higher Education partners.
For both the financial and non-financial elements of the annual bonus, targets have been set to be challenging relative to the
business plan. Reflecting concerns around commercial sensitivity at this time, it is the Committee’s intention to disclose all targets
retrospectively in next year’s Directors’ Remuneration Report. This decision takes into account Unite Group’s status as one of only
two listed PBSA providers in the UK and the possible insight that prospective disclosure might provide to our competitors as to
our short-term financial and operational strategy.
In line with the Remuneration Policy, 50% of any bonus earned will be satisfied by an allocation of shares in the Company
deferred for two years. Clawback and malus provisions apply to all awards.
Corporate measures Weighting
Financial
70%
Adjusted EPRA EPS 25.0%
TAR per share 25.0%
Net debt:EBITDA 20.0%
Non-financial
30%
Customer satisfaction NPS 7.5%
Higher Education Trust score 7.5%
Employee engagement 7.5%
GRESB rating 7.5%
157
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
LTIP
During 2024, Joe Lister and Mike Burt will each receive an award of up to 200% of salary delivered through a combination of the
PSP and ESOS, with vesting dependent on the achievement of three-year performance targets. The Committee is not proposing
any changes to the performance metrics used for the 2024 LTIP, details of which are shown in the table below.
As in 2023, targets for the EPS measure will be disclosed in a market announcement no later than the date of grant (expected to
be in April 2024). This delay allows the Committee to review the proposed targets following Board-approval of the five-year plan
and to ensure that the range is appropriately stretching.
No vesting below Threshold; straight-line vesting between Threshold and Stretch.
Any awards vesting for performance will be subject to an additional two-year holding period, during which time clawback provisions
will also apply. Further details of the grant date and number of interests awarded will be disclosed in next year’sreport.
Implementation of Non-Executive Director Remuneration Policy for 2024
Chair and Non-Executive Director fees
In early 2024, the Remuneration Committee reviewed the fee payable to the Chair of the Board against a number of market reference
points, including companies in the FTSE 350 Real Estate sector and those of similar overall size, complexity and geographical operations
to Unite Group. This analysis suggested that the current fee level was in the bottom quartile, and misaligned with Unite Group’s
philosophy on fee levels that, as a Group committed to being a responsible business and demonstrating leadership in the living
sector, fees should fairly reflect the market for the role as well as acknowledge the broad range of stakeholders to which Directors are
responsible. It was therefore agreed that Richard Huntingford’s fee as Chair of the Board would be increased by 7.5% for 2024 (i.e.
just below the average increase across the Group), and that a second stage increase would be considered for 2025. The most recent
previous review took place in September 2020.
A similar review of the fees payable to other Non-Executive Directors was undertaken by the Chair of the Board and Executive
Directors, with a consistent philosophy agreed around where Unite Group would seek to position fee levels going forward. It
was noted in particular that the Non-Executive Director base fee had not kept pace with the size and complexity of the Group
and the time commitment and responsibilities of the role. Following discussion, it was agreed to address this misalignment
through a one-off rebasing of the fee, amounting to a c.£9,500 increase for 2024. Fees payable for additional responsibilities
will remain unchanged, save that the fee payable to the Senior Independent Director will be brought more in line with the
othersupplementary fees to better reflect the additional responsibilities and time commitment of this role.
Threshold Stretch
Measure Weight 25% vesting 100% vesting
2026 adjusted EPRA EPS 28.0% To be disclosed no later than the date of grant
TSR ranking vs. constituents of the FTSE 350 Real Estate Supersector
Index (2024–2026)
28.0% In line with median In line with upper quartile
TAR per share ranking vs. constituents of the FTSE 350 Real Estate
Supersector Index (2024–2026)
28.0% In line with median In line with upper quartile
Operational energy intensity: cumulative reduction; 2026 vs. 2023
baseline (kWh/m
2
)
8.0% 7.9% cumulative
reduction
15.8% cumulative
reduction
EPC ratings: % of floorspace A–C rated in 2026 8.0% 98.6% 100.0%
158
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
A summary of the fee increases, which are effective 1 January 2024, is set out in the table below.
1. Role is undertaken by the Chair of the Board, with no any additional fee payable in respect of chairing this Committee.
Directors’ interests (audited)
A table setting out the beneficial interests of the current Directors and their families in the share capital of the Company as at
31 December 2023 is set out below. None of the Directors has a beneficial interest in the shares of any other Group company.
Between 31 December 2023 and the sign-off date of this report, there have been no changes in the Directors’ interests in shares.
1. As at the date of retiring from the Board on 28 February 2023.
Position 2023 fees 2024 fees
Base fees
Chair £238,703 £256,606
Non-Executive Director £52,453 £62,000
Additional fees
Senior Independent Director £6,175 £10,000
Audit & Risk Committee Chair £10,900 £10,900
Remuneration Committee Chair £10,900 £10,900
Nomination Committee Chair
Note 1 N/A N/A
Health & Safety Committee Chair £10,900 £10,900
Sustainability Committee £10,900 £10,900
Ordinary shares of
25p each at
31 December 2023
Ordinary shares of
25p each at
31 December 2022
R Smith 398,803 372,959
J Lister 600,730 581,006
R Huntingford 12,334 10,350
E McMeikan
Note 1 7,980 7,980
R Paterson 9,416 8,312
I Beato 2,276 1,724
S Pearce 2,893 1,186
T Jackson 0 0
S Smith 1,104 0
N Dulieu 3,314 0
A Jain 0 N/A
159
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
REMUNERATION COMMITTEE continued
Details of Executive Directors’ interests in share-based incentives are set out in the tables below.
Share price information
As at 31 December 2023, the middle market price for ordinary shares in the Company was 1,044.0p per share. During the course
of the year, the market price of the Company’s shares ranged from 847.0p to 1,057.0p per share.
Executive Directors’ shareholding requirements (audited)
The table below shows the shareholding of each Executive Director against their respective shareholding requirement as at
31December 2023:
1. Includes shares subject to a holding period under the LTIP and deferred bonus shares, where applicable. Excludes SAYE options.
2. Based on share price as at 31 December 2023 of 1,044.0p. Shares subject to deferral/holding periods are taken on a ‘net of tax’ basis for the purposes of the
current shareholding calculation.
3. As at the date of retiring from the Board on 28 February 2023.
Interests
Shareholding
requirement
% of salary/
base fee
Current
shareholding
% of salary/
base fee
Req.
met?
Owned
outright
Subject to deferral/
holding period
Unvested and/or subject to
perf. conditions
Shares/
nil-cost
options
Options/
HMRC
options
Shares/
nil-cost
options
Options/
HMRC
options
Note 1 Note 2
R Smith 398,803 68,372 343 294,153 0 250% 786% Yes
J Lister 600,730 55,320 343 233,794 1,649 200% 1,495% Yes
R Huntingford 12,334 54%
E McMeikan
Note 3 7,980 159%
R Paterson 9,416 187%
I Beato 2,276 45%
S Pearce 2,893 58%
T Jackson 0 N/A
S Smith 1,104 22%
N Dulieu 3,314 66%
A Jain 0 0%
0% 250% 500% 750% 1,000% 1,250% 1,500% 1,750%
Shareholding requirement Current shareholding
Richard Smith
Joe Lister
250%
786%
200%
1,495%
160
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REMUNERATION COMMITTEE continued
Directors’ interests in shares and options under Unite Group incentives (audited)
Deferred bonus
LTIP awards
1. All awards vesting for performance during the year are subject to an additional two-year holding period.
Executive
Interests
held at
01.01.23
Granted
during
the year
Lapsed
during
the year
Vested
during
the year
Interests
held at
31.12.23
End of
deferral
period
Richard Smith 1,235 1,235 24.02.24
13,838 13,838 01.03.25
Joe Lister 1,055 1,055 24.02.24
10,891 10,891 01.03.25
Executive Plan
Interests
held at
01.01.23
Interests
awarded
during the
year
ESOS
exercise
price
Interests
vested
during the
year
Interests
lapsed
during the
year
Interests
outstanding
at 31.12.23
Period of
qualifying
conditions
Note 1
Richard Smith PSP 117,383 21,950 95,433
23.04.20
23.04.23
ESOS 746 803.5p 139 607
PSP 87,070 87,070
12.04.21
12.04.24
ESOS 479 1,083.5p 479
PSP 93,137 93,137
10.04.22
10.04.25
ESOS 535 1,121.0p 535
PSP 113,94 6 113,946
06.04.23
06.04.26
ESOS 635 943.5p 635
Joe Lister PSP 95,510 17,86 0 7 7,650
23.04.20
23.04.23
ESOS 746 803.5p 139 607
PSP 70,850 70,850
12.04.21
12.04.24
ESOS 479 1,083.5p 479
PSP 73,288 73,288
10.04.22
10.04.25
ESOS 535 1,121.0p 535
PSP 89,656 89,656
06.04.23
06.04.26
ESOS 635 943.5p 635
161
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
SAYE
1. As at year-end, Joe Lister held 1,182 options under the 2020 scheme which had matured but not yet been exercised.
Details of the qualifying performance conditions in relation to the above referred-to awards made in prior years are set out on
previous pages or in earlier reports.
Awards made in prior years took the form of a combination of nil cost options under the PSP and HMRC-approved options
underthe ESOS. No variations have been made to the terms or conditions of any awards.
The Directors’ Remuneration Report has been approved by the Remuneration Committee and signed on its behalf by:
Nicky Dulieu
Chair of the Remuneration Committee
27 February 2024
Executive
Options
held at
01.01.23
Granted
during
the year
Exercised
during
the year
Option
price per
share
Options
held at
31.12.23
Maturity
date
Note 1
Richard Smith 2,122 2,122 848.0p 01.12.22
2,098 857.6p 2,098 01.12.25
Joe Lister 1,182 760.8p 1,182 01.12.23
913 985.2p 913 01.12.24
1,251 741.2p 1,251 01.12.26
REMUNERATION COMMITTEE continued
162
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
DIRECTORS’ REPORT
As at 31 December 2023, the Company had received
notifications from the following companies and institutions
of themselves and their clients holding 3% or more of the
issued share capital of the Company. The Company has not
received any further notifications since that date through to
27February2024.
SHARE CAPITAL
Shareholder
Percentage
of share
capital
Canada Pension Plan Investment Board 16.65%
BlackRock Inc 9.55%
Norges Bank Investment Management 8.06%
APG Asset Management NV 5.60%
The Vanguard Group Inc 4.01%
Royal London Asset Management Ltd 3.14%
Share capital
At the date of this report, there are 435,860,011 ordinary
shares of 25p each in issue, all of which are fully paid up
andquoted on the London Stock Exchange.
During the year and through to the date of this report,
thefollowing numbers of ordinary shares of 25p each
wereallotted and issued as follows:
33,149,172 – pursuant to the July 2023 capital raise and
representing 32,693,930 placing shares, 441,989 retail offer
shares and Director subscribed shares of 13,253 at a price of
905 pence per share.
Unite Group share scrip dividend scheme 2,232,001.
Pursuant to the exercise of options under Unite Group PLC
Savings Related Share Option Scheme 119,338.
Pursuant to the exercise of options under Unite Group PLC
Performance Share Plan 71,880.
Pursuant to the exercise of options under Unite Group PLC
Approved Scheme 7,684.
The rights attaching to the Company’s ordinary shares, as well
as the powers of the Company’s Directors, are set out in the
Company’s Articles of Association.
There are no restrictions on the transfer or voting rights of
ordinary shares in the capital of the Company (other than
those which may be imposed by law from time to time or
asset out in the Company’s Articles of Association).
The Directors have no authority to buy back the
Company’sshares.
In accordance with the Market Abuse Regulations, certain
employees are required to seek approval to deal in the
Company’s shares.
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfers of
securities and/or voting rights. No person holds securities in
the Company carrying special rights with regard to control of
the Company. Unless expressly specified to the contrary, the
Company’s Articles of Association may be amended by special
resolution of the shareholders.
Authority to issue shares
The Directors may only issue shares if authorised to do so
by the Articles of Association or the shareholders in general
meeting. At the Company’s Annual General Meeting held
on 18May 2023, shareholders granted an authority to the
Directors to allot ordinary shares up to an aggregate nominal
amount of £33,358,506 (which represented one-third of the
nominal value of the issued share capital of the Company
as at 28 March 2023). In accordance with guidelines issued
by the Investment Association, this resolution also granted
the Directors authority to allot further equity securities up to
the aggregate amount of £33,358,506 (representing one-
third of the nominal value of the issued share capital of the
Company as at 28 March 2023). This additional authority
was only permitted for fully pre-emptive rights issues. As at
31December 2023, the shares that had been allotted were
to satisfy awards under the Company’s share schemes, the
scrip dividend scheme and pursuant to the capital raise in July
2023. As this authority is due to expire on 17August 2024,
shareholders will be asked to renew and extend the authority,
given to the Directors at the last Annual General Meeting, to
allot shares in the Company, or grant rights to subscribe for,
or to convert any security into, shares in the Company for the
purposes of Section 551 of the Companies Act 2006. Further
details on the resolution will be provided in the Notice of this
year’s Annual General Meeting and its explanatory notes.
Disapplication of pre-emption rights
If the Directors wish to allot new shares and other equity
securities, or sell treasury shares, for cash (other than in
connection with an employee share scheme) company law
requires that these shares are offered first to shareholders in
proportion to their existing holdings. There may be occasions,
however, when the Directors need the flexibility to finance
business opportunities by the issue of shares without a pre-
emptive offer to existing shareholders. This cannot be done
under the Companies Act 2006 unless the shareholders have
first waived their pre-emption rights. At the forthcoming
Annual General Meeting, shareholders will be asked to
pass two special resolutions to grant the Directors powers
to disapply shareholders’ pre-emption rights under certain
circumstances. Further details on the resolutions will be
provided in the Notice of this year’s Annual General Meeting.
163
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
DIRECTORS’ REPORT continued
Change of control
All of the Company’s share schemes contain provisions
relatingto a change of control. Outstanding rewards and
options would normally vest and become exercisable
on a change of control, subject to the satisfaction of any
performance conditions. Other than certain of the Unite
Group’s banking facilities, there are no other significant
agreements to which the Company is a party that affect,
alter or terminate upon a change of control of the
Company following a takeover bid. Nor are there any
agreements between the Company and its Directors or
employees providing for compensation for loss of office
oremploymentthat occurs because of a takeover bid.
Going concern and viability statement
The going concern statement and viability statement are
set out on page 183 and page 71 respectively and are
incorporated into this Directors’ Report by reference.
Independent auditor and disclosure of information
toauditors
The Directors who held office at the date of approval of the
Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s
auditor is unaware; and each Director has taken all the steps
that he/she ought to have taken as a Director to make himself/
herself aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information. This
confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
A resolution to reappoint Deloitte as auditor of the Unite
Group will be put to shareholders at the forthcoming Annual
General Meeting.
Directors’ conflicts of interest
The Company has procedures in place for managing conflicts
of interest. A Director must notify the Chair (and the Chair
notifies the Chief Executive) if he/she becomes aware that he/
she, or any of his/her connected parties, may have an interest
in an existing or proposed transaction with the Company or
the Unite Group. Directors have a continuing duty to update
any changes to these conflicts.
Political donations
No political donations, contributions or expenditure were
made during the year ended 31 December 2023.
Indemnities
There are no qualifying third-party indemnity provisions or
qualifying pension scheme indemnity provisions for the benefit
of any of the Directors.
Research and development
The Company is not currently carrying on any activities in the
field of research and development.
Branches outside the UK
The Company does not have any branches outside of the UK.
Appointment and replacement of Directors
The Company’s Articles of Association provide that Directors may
be appointed by the existing Directors or by the shareholders in
a general meeting. Any person appointed by the Directors will
hold office only until the next general meeting, notice of which is
first given after their appointment and will then be eligible for re-
election by the shareholders. A Director may be removed by the
Company as provided for by applicable law and shall vacate office
in certain circumstances asset out in the Articles of Association.
In addition the Company may, by ordinary resolution, remove
a Director before the expiration of his/her period of office and,
subject to the Articles of Association, may by ordinary resolution
appoint another person to be a Director instead. There is no
requirement for a Director to retire on reaching any age.
164
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
DIRECTORS’ REPORT continued
Disclosures required under Listing Rule 9.8.4R
For the purposes of LR 9.8.4C, the information required to be disclosed by LR 9.8.4R can be found in the following locations
within the Annual Report:
Information required under LR 9.8.4R Reference
(1) Amount of interest capitalised and tax relief
Note 3.1, page 197
(2) Publication of unaudited financial information N/A
(3) Details of long-term incentive schemes Pages 150, 155 and 158
(4) Waiver of emoluments by a Director N/A
(5) Waiver of future emoluments by a Director N/A
(6) Non-pre-emptive issues of equity for cash Pages 96, 99 and 163
(7) Item (7) in relation to major subsidiary undertakings N/A
(8) Parent participation in a placing by a listed subsidiary N/A
(9) Contracts of significance N/A
(10) Provision of services by a controlling shareholder N/A
(11) Shareholder waiver of dividends N/A
(12) Shareholder waiver of future dividends N/A
(13) Agreements with controlling shareholders N/A
All the information referenced above is incorporated by
reference into the Directors’ Report.
Other information incorporated by reference
The following information in the Strategic Report and
financialstatements is incorporated into this Directors’
Reportby reference:
Results and dividend declaration on pages 46 and 219.
Greenhouse gas emissions and energy consumption
disclosures on pages 56 and TCFD/CFD disclosure on
page58.
Financial instruments and financial risk management
on page 72 and Section 4 of the notes to the financial
statements on page 209.
Future developments on pages 37–39.
Employment of disabled persons/employee involvement is
covered in our DEIB&W Policy on pages 95 and 111.
Workforce engagement on page 94.
Engagement with customers, partners, suppliers and others
on pages 16 and 17.
The Corporate Governance Report (which includes details of
Directors who served throughout the year) on pages 80–109, the
Statement of Directors’ responsibilities on page 166 and details of
post balance sheet events on page 226 are incorporated into this
Directors’ Report by reference.
Management Report
This Directors’ Report together with the Strategic Report and
other sections from the Annual Report forms the Management
Report for the purposes of DTR 4.1.8 R.
Annual General Meeting
The Annual General Meeting of the Company will be held at
the Company’s registered office at South Quay, Temple Back,
Bristol, BS1 6FL at 9.30am on 16 May 2024. We request that
shareholders who do wish to attend in person pre-register their
intention to attend to help us manage numbers. Shareholders
are encouraged to monitor our website at https://www.
unitegroup.com/investors/agm and London Stock Exchange
announcements for any updates regarding the Annual General
Meeting arrangements.
Formal notice of the meeting is given separately and will be
available on the Company’s website at:
unitegroup.com/investors.
This report was approved by the Board on 27 February 2024
and signed on its behalf by
Christopher Szpojnarowicz
Company Secretary
27 February 2024
165
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and Accounts and the Unite Group and Parent Company
financial statements in accordance with applicable law
andregulations.
Company law requires the Directors to prepare the Unite
Group and Parent Company financial statements for each
financial year. Under that law they are required to prepare the
Unite Group financial statements in accordance with IFRS as
adopted by the UK (Adopted IFRS) and applicable law and have
elected to prepare the Parent Company financial statements
in accordance with United Kingdom Accounting Standards
including FRS 101 – Reduced Disclosure Framework (‘United
Kingdom Generally Accepted Practice’).
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Unite Group and
Parent Company and of their profit or loss for that period.
In preparing each of the Unite Group and Parent Company
financial statements, the Directors are required to:
Select suitable accounting policies and then apply
themconsistently.
Make judgements and estimates that are reasonable
andprudent.
State whether they have been prepared in accordance
with IFRSs as adopted by the UK (or in accordance with
UKGenerally Accepted Practice).
Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Unite Group
and the Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Parent Company and
enable them to ensure that its financial statements comply
with the Companies Act 2006. They have general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Unite Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Directors’ Report, Directors’
Remuneration Report and Corporate Governance statement
that comply with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
The Directors confirm that:
The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole.
The Directors’ Report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face.
Joe Lister Mike Burt
Director Director
27 February 2024
166
GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1. Opinion
In our opinion:
the financial statements of The Unite Group PLC (the Parent Company) and its subsidiaries (the Group) give a true and fair view
of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and of the Group’s profit for the year
then ended;
the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including Financial Reporting Standard 101 Reduced Disclosure Framework; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and Parent Company balance sheets;
the consolidated and Parent Company statements of changes in equity;
the consolidated statement of cash flows; and
the related sections 1 to 9.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law,
and United Kingdom adopted international accounting standards. The financial reporting framework that has been applied in the
preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including
FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the Financial Reporting Council’s (the FRC’s) Ethical Standard as applied
to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services provided to the Group and Parent Company for the year are disclosed in section 2.6 to the financial
statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group
orthe Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matter that we identified in the current year was:
Investment property and Investment property under development property valuations.
Within this report, key audit matters are identified as follows:
Similar level of risk
Materiality The materiality that we used for the Group financial statements was £51 million which was determined
on the basis of net assets. However, we use a lower materiality threshold of £8.8 million for balances
which impact EPRA earnings.
Scoping Our Group audit scope comprises the audit of The Unite Group Plc as well as Group’s joint ventures: The
Unite UK Student Accommodation Fund (USAF) and The London Student Accommodation Vehicle (LSAV).
All audit work was completed by the Group audit team.
Significant changes in
our approach
Last year our report included Accounting for Joint Ventures as a key audit matter which is not included
this year. The reasoning for the change is detailed below in section 5. There were no other significant
changes to our approach from the prior year.
INDEPENDENT AUDITOR’S REPORT
167
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
Obtaining an understanding of the relevant controls over the going concern process, including management’s process to
formulate the cash flow forecasts as well as the Board approval process;
Understanding the financing facilities available to the Group and Parent Company, including the associated covenants;
Performing risk assessment procedures including a detailed consideration of the entity’s business model, operations
andfinancing;
Obtaining an understanding of the base-case and reasonable worst case as well as evaluating any plans for future mitigating
actions. Assessing the outcome of the reverse stress testing, this includes challenging the likelihood of downside scenarios
arising relative to reverse stress tests with reference to the income and cost assumptions;
Testing the arithmetical accuracy of the models used to prepare the Group’s forecast and related scenarios;
Assessing and challenging the forecasts and sensitivity in the context of compliance with the covenants associated
withborrowings;
Challenging the revenue assumptions, for the outturn of the 2023/24 academic year and the assumptions for the 2024/25
academic year. For the 2024/25 academic year specifically, we assessed the Group’s current forward sales bookings and UCAS
application data to forecast occupancy assumptions for reasonableness;
Challenging the cost assumptions within the forecasts, including consideration of previously incurred costs, the impact
of cost inflation, and assumptions made relating to expected future costs associated with climate change and fire-safety
relatedlegislation;
Challenging the status of the refinancing activity in relation to the £300 million maturing within the going concern period;
Determining the sufficiency of Group’s liquidity and headroom positions with reference to borrowing facility agreements,
including the consideration of the availability of undrawn down committed facilities; and
Assessing the appropriateness of the Group’s disclosure concerning the going concern basis of preparation.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
In the prior year, our report included Accounting for Joint Ventures as a key audit matter which is not included this year. In the
prior year there were changes to the Group’s ownership percentage, specifically within USAF which increased the judgement
relating to whether Unite Group had control or joint control. In the current year, no such changes have occurred and the level
ofjudgement has decreased. Based on this, we no longer consider this to be a key audit matter.
INDEPENDENT AUDITOR’S REPORT continued
168
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT continued
5.1. Investment property and investment property under development valuations
Key audit matter
description
The Group’s principal assets are investment properties (2023: £3,812.3 million; 2022: £3,713.7 million) and
investment properties under development (2023: £174.6 million; 2022: £202.7 million). The Group also holds
investments in its joint ventures, USAF and LSAV, with their principal assets also being investment properties.
The investment properties are carried at fair value based on an appraisal by the Group’s external valuers.
Valuations are carried out at six-monthly intervals for the Group and quarterly for the joint ventures in accordance
with the Royal Institution of Chartered Surveyors (‘RICS’) Valuation – Professional Standards (the ‘Red Book’),
taking into account transactional evidence during the year and International Financial Reporting Standard 13
(FairValueMeasurement).
The valuation is underpinned by a number of estimates and assumptions as it requires the estimation of
rental income and growth, property yields, occupancy and property management costs. Given the high level of
estimation involved, we have determined that there is potential for fraud through possible manipulation of these
key assumptions to the valuation.
Valuations are also impacted by refurbishment cost assumptions, including cladding and fire-safety remediation
requirements and assumptions relating to climate change legislative requirements.
With regards to the investment properties under development, additional estimation is required to forecast
discounted cash flows with a deduction for construction costs to complete.
Refer to page 114 (Audit & Risk Committee Statement, section 3.1: Wholly-owned property assets, section 3.4:
Investments in joint ventures and section 5.5: fire-safety provision. Critical accounting judgements and key sources
of estimation uncertainty disclosures relating to investment property and development property valuation are set
out in Sections 1 and 3.1.
How the scope
of our audit
responded to the
key audit matter
We carried out the following audit procedures in response to the identified key audit matter:
Understanding the properties and relevant controls:
Obtained an understanding of and tested the relevant controls over the investment property and development
property valuation processes.
Performed enquiries with key management to enhance our knowledge of the portfolio and to understand their
internal valuation process, the development appraisal process and to identify any key properties of interest.
Data provided to the valuer:
Challenged the accuracy, completeness and consistency of the information provided to the external valuers; this
work included testing a sample of income and tenancy data back to Group management information which we
had tested for accuracy and completeness.
Tested on a sample basis the forecast cost to complete against budget and costs incurred to date.
External valuation:
Assessed the objectivity, competence and capability of the Group’s valuers and reviewed their terms of
engagement with the Group to determine whether there were any matters that might have affected their
objectivity or may have imposed scope limitations on their work.
We obtained the external valuation reports and, along with our valuation specialists within our Deloitte Real
Assets Advisory team, met with the external valuer and made enquiries relating to the results of their work on
asample of properties, as well as their views of the broader market.
Understood and challenged the assumptions used in relation to key drivers such as rental income and growth,
occupancy, yields and property management costs including comparing them to the trends at the end of the
year and the following year’s budget.
With the assistance of valuation specialists, benchmarked the assumptions used against market data,
includingrelevant transactions.
Challenged the valuers as to whether any special assumptions had been made and how they approach the
impact of climate change and fire-safety remediation in the valuations.
Assessed the valuation methodology used and considered compliance with the Red Book guidance. We also
tested the integrity of the model used by the external valuer.
Reconciled the external valuation reports to underlying financial records to test for completeness and accuracy
within the Group’s financial statements.
Compared the property specific assumptions to assess whether there is consistency within the portfolio as
wellas consistency with related assumptions used in other estimates.
Disclosures
Assessed the appropriateness of the Group’s valuation disclosures, including the related sensitivities.
Key
observations
We are satisfied with the approach and methodology adopted in valuing the property portfolio and consider the
investment property and development property valuations to be suitable for inclusion in the financial statements
at 31 December 2023.
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6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent Company financial statements
Materiality £51.0 million (2022: £38.0 million) £50.5 million (2022: £37.6 million)
Basis for determining
materiality
1.25% (2022: 1%) of net assets 1.25% (2022: 1%) of net assets
Rationale for the
benchmark applied
We consider net assets to be a critical financial
performance measure for the Group on the basis
that it is a key metric used by management, investors,
analysts and lenders.
As the Parent Holding Company the principal activity is
to hold the investments in subsidiaries. Therefore, the
net assets balance is considered to be the key driver
of the Parent Company’s performance and the most
relevant benchmark for materiality.
In addition to net assets, we consider the EPRA earnings to be a critical financial performance measure for the Group and we
applied a lower threshold of £8.8 million (2022: £8.1 million) based on 5% (2022: 5%) of that measure for testing of all balances
impacting this financial performance measure.
Materiality
Net assets
Group materiality
Component
materiality range
£30.6 million to
£40.8 million
Group materiality
£51.0 million
Audit & Risk
Committee
reporting threshold
£2.4 million
Net assets
£4,090m
EPRA earnings impacting measures
EPRA earnings
Account balance
specific materiality
Component
materiality range
£5.3 million to
£7.0million
Account balance
specific materiality
£8.8 million
Audit & Risk
Committee
reporting threshold
£2.4 million
EPRA earnings
£171.6m
INDEPENDENT AUDITOR’S REPORT continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT continued
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent Company financial statements
Performance
materiality
70% (2022: 70%) of Group materiality 70% (2022: 70%) of Parent Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered the following factors:
a. our risk assessment, including our assessment of the Group’s overall control environment, and that we
consider it appropriate to rely on controls over a number of business processes; and
b. our past experience of the audit, which has indicated a low number of corrected and uncorrected
misstatements identified in prior periods.
6.3. Error reporting threshold
We agreed with the Audit & Risk Committee that we would report to the Committee all audit differences in excess of £2.4 million
(2022: £1.9 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
Wealso report to the Audit & Risk Committee on disclosure matters that we identified when assessing the overall presentation
ofthe financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls,
and assessing the risks of material misstatement at the Group level.
The Group is audited by one audit team, led by the Senior Statutory Auditor. We engage with staff at the Group’s Bristol head
office, as the books and records for each entity within the Group are maintained at this location. The Group only operates within the
United Kingdom – this includes The Unite Group plc and its related subsidiaries, as well as the two joint ventures, USAF andLSAV.
We audit all of the results of the Group together with USAF and LSAV, for the purposes of our Group audit. We have also tested the
consolidation process to confirm our conclusion that there were no significant risks of material misstatement of the aggregated
financial information.
7.2. Our consideration of the control environment
From our understanding of the Group and after assessing relevant controls, we tested and relied on controls in performing our
audit of rental income recorded within the Group’s room booking system and the relevant controls relating to the valuation of
investment property and investment property under development.
In addition, we have obtained an understanding of the relevant controls such as those relating to the financial reporting cycle.
The Group uses the following application systems for the recording and reporting of its financial statements:
Oracle EBS – general ledger and room booking system;
Portal Agent Desktop (PAD) – room booking portal used by students and implemented on top of Oracle EBS and therefore
where revenue transactions are initiated; and
HFM – used to prepare the Group consolidation at the Group’s Head Office.
We involved IT specialists to assess the relevant controls over the three systems set out above. Working with IT specialists we
identified and assessed relevant risks arising from each relevant IT system and the supporting infrastructure technologies based
onthe role of application in the Group’s flow of transactions. We obtained an understanding of the IT environment as part of
these risk assessment procedures. We further performed the following procedures:
Determined whether each general IT control, individually or in combination with other controls, was appropriately designed to
address the risk;
Obtained sufficient evidence to assess the operating effectiveness of the controls across the reporting period; and
Altered the nature, timing and extent of our procedures where required if we were unable to rely on controls.
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7.3. Our consideration of climate-related risks
We have made enquiries of management to understand the processes in place to assess the potential impact of climate change
on the business and the financial statements. Management consider climate change to be a principal risk which particularly
impacts the cost of retrofitting rental accommodation to improve their sustainability credentials and comply with future
regulations. These risks are consistent with those identified through our own risk assessment process.
As part of our identification of key audit matters, we consider there to be a risk in relation to climate change as part of the valuation
of investment properties and investment properties under development. There is a risk that the valuation does not include the
relevant assumptions around climate change to the extent assumed by a third-party when determining fair value.
We made enquiries of the valuer and management as to the assumptions included and considered their appropriateness with
the assistance of our internal real estate specialists. In considering the disclosures presented as part of the Strategic Report, we
engaged our climate specialists to assess compliance with the TCFD and CFD requirements and the recommendations made by
both the Task Force and FRC as set out in their thematic reviews. We have also assessed whether these disclosures reflect our
understanding of the Group’s approach to climate. We have reviewed the disclosures in the principal risk section of the Annual
Report and consider that management have appropriately disclosed the current risk that has been identified.
8. Other information
The other information comprises the information included in the Annual Report, other than the financial statements and
ourauditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
dueto fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
10. Auditors responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financialstatements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
We have nothing to report in this regard.
INDEPENDENT AUDITOR’S REPORT continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT continued
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management, internal audit, the Group’s internal legal counsel, the Directors and the Audit & Risk
Committee about their own identification and assessment of the risks of irregularities, including those that are specific to the
Group’s sector;
any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures
relatingto:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations, IT and
industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators
offraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the following areas: investment property and investment property under
development valuations, owing to the potential manipulation and override by management of the controls relating to the
valuation process. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond
tothe risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, and
taxlegislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included
the Group’s compliance with health and safety matters, including fire safety and fire cladding.
11.2. Audit response to risks identified
As a result of performing the above, we identified the investment property and investment property under development
valuations as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains
thematter in more detail and also describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management, the Audit & Risk Committee and internal and external legal counsel concerning actual and potential
litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing
correspondence with HMRC; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the
course of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
the Directors’ Statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 86;
the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period
is appropriate set out on page 71;
the Directors’ Statement on fair, balanced and understandable set out on page 87;
the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 87;
the section of the annual report that describes the review of effectiveness of risk management and internal control systems set
out on page 67; and
the section describing the work of the Audit & Risk Committee set out on page 114.
INDEPENDENT AUDITOR’S REPORT continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT continued
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns.
14.2. Directors’ remuneration
Under the Companies Act 2006, we are also required to report if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting
records and returns.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit & Risk Committee, we were appointed by the Board on 10 June 2015 to audit the
financial statements for the year ending 31 December 2015 and subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and reappointments of the firm is nine years, covering the years ending 31 December
2015 to 31 December 2023.
15.2. Consistency of the audit report with the additional report to the Audit & Risk Committee
Our audit opinion is consistent with the additional report to the Audit & Risk Committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these
financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the
FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format
Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Stephen Craig (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
27 February 2024
We have nothing to report in respect of these matters.
We have nothing to report in respect of these matters.
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CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2023
20232022
Note£m£m
Rental income
2.4
25 9. 2
2 41. 7
Other income
2.4
16 .9
1 7. 6
Total revenue
2 7 6 .1
25 9. 3
Cost of sales
(7 6. 8)
(70. 3)
Expected credit losses
(3. 0)
(1.7)
Operating expenses
(4 1.6)
(3 7.1)
Results from operating activities before (losses)/gains on property
15 4 .7
15 0 . 2
Profit/(loss) on disposal of property
11. 8
(15 . 6)
Net valuation (losses)/gains on property (owned and under development)
3.1
(3 7. 2)
112 . 7
Net valuation losses on property (leased)
3.1
(10. 4)
(9. 3)
Profit before net financing (costs)/gains and share of joint venture profit
118 . 9
238 .0
Loan interest and similar charges
4.3
(19 . 8)
(29. 3)
Interest on lease liability
4.3
(7. 7 )
(8 .1)
Mark to market changes on interest rate swaps
4.3
(1 7. 2)
70 .7
Finance (costs)/gains
(4 4 . 7)
33. 3
Finance income
4.3
1. 3
0. 2
Net financing (costs)/gains
(4 3 . 4)
33.5
Share of joint venture profit
3.4b
2 7. 0
8 0.4
Profit before tax
102 . 5
3 51. 9
Current tax
2.5a
(1. 2)
(0 .7)
Deferred tax
2.5a
2.3
0.6
Profit for the year
103 .6
351 . 8
Profit for the year attributable to
Owners of the Parent Company
102 . 5
350.5
Non-controlling interest
1 .1
1. 3
103 . 6
3 51. 8
Earnings per share
Basic
2.2c
2 4 .7
8 7. 7
Diluted
2.2c
2 4.6
8 7. 6
All results are derived from continuing activities.
20232022
Note£m£m
Profit for the year
103 .6
351 . 8
Share of joint venture mark to market movements on hedging instruments
3.4b
(2 .1)
4 .7
Other comprehensive income for the year
(2 .1)
4 .7
Total comprehensive income for the year
101. 5
356. 5
Attributable to
Owners of the Parent Company
10 0 . 4
355. 2
Non-controlling interest
1 .1
1. 3
101. 5
356.5
All other comprehensive income may be classified as profit and loss in the future.
There are no tax effects on items of other comprehensive income.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
CONSOLIDATED BALANCE SHEET
At 31 December 2023
20232022
Note£m£m
Assets
Investment property (owned)
3.1
3 ,69 4. 3
3,623.4
Investment property (leased)
3.1
8 4 .7
90. 3
Investment property (under development)
3.1
174 . 7
2 02 .7
Investment in joint ventures
3.4b
1, 2 19. 0
1, 2 2 6 . 6
Other non-current assets
3.3b
12 .7
15 . 4
Interest rate swaps
4.2
56 .0
73. 2
Right-of-use assets
3.3a
1.7
2 .7
Deferred tax asset
2.5d
5.6
3 .6
Total non-current assets
5 , 2 4 8 .7
5,237 .9
Assets classified as held for sale
3.1
2 5 .7
Inventories
3.2
26.2
12 . 8
Trade and other receivables
5.2
132 . 8
1 05.2
Cash and cash equivalents
5.1
3 7. 5
38.0
Total current assets
222.2
15 6 .0
Total assets
5,470.9
5, 393.9
Liabilities
Current borrowings
4.1
(299.4)
Lease liabilities
4.6a
(5. 4)
(4 .8)
Trade and other payables
5.4
(2 0 7. 8)
(19 1 . 5)
Current tax asset/(liability)
0.6
(0. 8)
Provisions
5.5
(5. 2)
(29.5)
Total current liabilities
(5 1 7. 2)
(226.6)
Borrowings
4.1
(782.2)
(1, 26 5 .9)
Lease liabilities
4.6a
(7 8. 4)
(8 7. 5)
Total non-current liabilities
(860.6)
(1 ,353.4)
Total liabilities
(1 ,377 .8)
(1 , 5 8 0 . 0)
Net assets
4 , 0 9 3 .1
3 , 8 13 . 9
Equity
Issued share capital
4.8
10 9 .4
1 0 0 .1
Share premium
4.8
2 , 4 4 7.6
2 ,16 2 . 0
Merger reserve
40. 2
4 0. 2
Retained earnings
1, 4 6 6 . 0
1, 47 9 . 0
Hedging reserve
3.8
6.2
Equity attributable to the owners of the Parent Company
4 ,0 67. 0
3, 787 .5
Non-controlling interest
2 6 .1
26. 4
Total equity
4 , 0 9 3 .1
3 , 8 13 . 9
The financial statements of The Unite Group PLC, registered number 03199160, were approved and authorised for issue by the
Board of Directors on 27 February 2024 and were signed on its behalf by:
Joe Lister Mike Burt
Director Director
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
COMPANY BALANCE SHEET
At 31 December 2023
Note
2023
£m
2022
£m
Assets
Investments in subsidiaries 3.5 2,450.8 2, 397.0
Loans to Group undertakings 5.2 2 ,130.0 2,076.9
Interest rate swaps 4.2 56.0 73.2
Total non-current assets 4,636.8 4,547.1
Trade and other receivables 5.2 0.1
Cash and cash equivalents 0.7 0.7
Total current assets 0.7 0.8
Total assets 4,637.5 4,547.9
Current liabilities
Amounts due to Group undertakings 5.4 (66.7) (70.3)
Other payables 5.4 (9.1) (9.5)
Total current liabilities (75.8) (79.8)
Borrowings 4.1 (468.6) (649.6)
Total non-current liabilities (468.6) (649.6)
Total liabilities (544.4) (729.4)
Net assets 4,093.1 3,818.5
Equity
Issued share capital 4.8 109.4 100.1
Share premium 4.8 2 ,447.6 2,162.0
Merger reserve 40.2 40.2
Hedging reserve 1.1 1.3
Retained earnings 1,494.7 1,514.9
Total equity 4,093.1 3,818.5
Total equity is wholly attributable to equity holders of The Unite Group PLC. The profit of The Unite Group PLC in 2023 was £97.2 million
(2022: £426.1 million).
The financial statements of The Unite Group PLC, registered number 03199160, were approved and authorised for issue by the Board of
Directors on 27 February 2024 and were signed on its behalf by:
Joe Lister Mike Burt
Director Director
178
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2023
Note
Issued Attributable Non-
shareShare Merger Retained Hedging to owners of controlling
capitalpremiumreserveearningsreservethe ParentinterestTotal
£m£m£m£m£m£m£m£m
At 1 January 2023
1 0 0 .1
2 ,16 2 . 0
4 0.2
1, 4 7 9. 0
6. 2
3,787 .5
26.4
3 , 8 13 . 9
Profit for the year
102 . 5
102 . 5
1 .1
10 3 .6
Other comprehensive
income for the year:
Share of joint venture mark
3.4b
(2 .1)
(2 .1)
(2 .1)
tomarket movements on
hedging instruments
Total comprehensive
income for the year
102 . 5
(2 .1)
10 0. 4
1 .1
10 1. 5
Shares issued
4.8
9. 3
2 85.6
2 94.9
29 4.9
Deferred tax on share-
based payments
0. 2
0.2
0. 2
Fair value of share-based
2.2
2.2
2.2
payments
Own shares acquired
(0.6)
(0.6)
(0.6)
Unwind of realised swap
(0 . 3)
(0. 3)
(0. 3)
gain
Dividends paid to owners
4.9
(1 1 7. 3)
(11 7. 3)
(11 7. 3)
ofthe Parent Company
Dividends to non-controlling
(1. 4)
(1. 4)
interest
At 31 December 2023
10 9. 4
2 , 4 47. 6
4 0.2
1, 4 6 6 . 0
3.8
4 , 0 6 7. 0
2 6 .1
4 ,0 9 3 .1
Issued Attributable Non-
shareShare Merger Retained Hedging to owners of controlling
capitalpremiumreserveearningsreservethe ParentinterestTotal
Note£m£m£m£m£m£m£m£m
At 1 January 2022
99.8
2 ,161. 2
40. 2
1, 2 2 5 . 0
1. 6
3 , 5 2 7. 8
26. 6
3,554.4
Profit for the year
35 0.5
350.5
1. 3
3 51. 8
Other comprehensive
income for the year:
Share of joint venture mark 3.4b
4 .7
4 .7
4 .7
tomarket movements on
hedging instruments
Total comprehensive
income for the year
3 50. 5
4 .7
355. 2
1. 3
356. 5
Shares issued4.8
0.3
0.8
1 .1
1 .1
Deferred tax on share-
based payments
0.3
0. 3
0. 3
Fair value of share-based
1. 3
1. 3
1. 3
payments
Own shares acquired
(1. 7)
(1. 7)
(1.7)
Unwind of realised
(0 .1)
(0 .1)
(0 .1)
swapgain
Dividends paid to owners 4.9
(96 .4)
(9 6. 4)
(9 6. 4)
ofthe Parent Company
Dividends to non-controlling
(1. 5)
(1. 5)
interest
At 31 December 2022
1 0 0 .1
2 ,16 2 . 0
4 0.2
1, 4 7 9. 0
6. 2
3,787 .5
26.4
3 , 8 13 . 9
The notes on pages 182–236 form part of the financial statements.
179
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2023
Note
Issued
share
capital
£m
Share
premium
£m
Merger
reserve
£m
Hedging
reserve
£m
Retained
earnings
£m
Total
£m
At 1 January 2023 100.1 2,162.0 40.2 1.3 1,514.9 3,818.5
Profit and total comprehensive income
for the year
97.2 97.2
Shares issued 4.8 9.3 285.6 294.9
Unwind of realised swap gain (0.2) (0.2)
Dividends to shareholders 4.9 (117.3) (117.3)
At 31 December 2023 109.4 2,4 47.7 40.2 1.1 1,494.7 4,093.1
Note
Issued
share
capital
£m
Share
premium
£m
Merger
reserve
£m
Hedging
reserve
£m
Retained
earnings
£m
Total
£m
At 1 January 2022 99.8 2,161.2 40.2 1.5 1,185.2 3, 487.9
Profit and total comprehensive income
for the year
426.1 426.1
Shares issued 4.8 0.3 0.8 1.1
Unwind of realised swap gain (0.2) (0.2)
Dividends to shareholders 4.9 (96.4) (96.4)
At 31 December 2022 100.1 2 ,162.0 40.2 1.3 1,514.9 3,818.5
The notes on pages 182–236 form part of the financial statements.
180
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Group
20232022
Note£m£m
Net cash flows from operating activities
5.1
153.2
1 5 4 .1
Investing activities
Investment in joint ventures
(14 4 . 6)
Capital expenditure on properties
(13 5. 3)
(3 16 . 5)
Acquisition of intangible assets
(1. 8)
(2. 3)
Acquisition of plant and equipment
(0. 9)
(1. 3)
Proceeds from sale of investment property
2 3 4 .1
Interest received
1.3
0.2
Dividends received
2 7. 3
38.5
Net cash flows from investing activities
(10 9. 4)
(19 1. 9)
Financing activities
Proceeds from the issue of share capital
294.9
1 .1
Payments to acquire own shares
(0.6)
(1.7)
Interest paid in respect of financing activities
(3 8 .8)
(4 3 .6)
Proceeds from non-current borrowings
105. 7
Repayment of borrowings
(18 2 . 5)
Dividends paid to the owners of the Parent Company
(10 3 . 4)
(85. 1)
Withholding tax paid on distributions
(12 .0)
(8 .7)
Dividends paid to non-controlling interest
(1. 9)
(1. 3)
Net cash flows from financing activities
(4 4 . 3)
(3 3.6)
Net decrease in cash and cash equivalents
(0. 5)
(71. 4)
Cash and cash equivalents at start of year
38 .0
10 9. 4
Cash and cash equivalents at end of year
3 7. 5
38.0
181
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
NOTES TO THE FINANCIAL STATEMENTS
Section 1: Basis of preparation
This section lays out the Group’s accounting policies that relate to the financial statements as a whole.
Where an accounting policy is specific to a particular note to the financial statements, the policy is
described in the note to which it relates and has been clearly identified in a box.
Basis of consolidation
The financial statements consolidate those of Unite Group PLC (the Company) and its subsidiaries (together referred to as the
Group) and include the Group’s interests in jointly controlled entities. The Company financial statements present information
about the Company as a separate entity and not as a group.
The Company financial statements have been prepared in accordance with Financial Reporting Standard 101 – Reduced disclosure
framework (FRS 101), and the Group financial statements have been prepared in accordance with International Financial Reporting
Standards as adopted by the United Kingdom (Adopted IFRS), in conformity with the Companies Act 2006, and approved by the
Directors. On publishing the Company financial statements here together with the Group financial statements, the Company is
taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related
notes. The Company is also taking advantage of the FRS 101 disclosure exemptions from requirements of IFRS 7, IFRS 13 and IAS
1 including presenting a Company statement of cash flows.
The accounting policies have been applied consistently to all periods presented in these consolidated financial statements.
The Company is a public company limited by shares and is registered in England, United Kingdom, where it is also domiciled.
Subsidiaries are those entities controlled by the Company. Control exists when the Company has an existing right that gives it
the current ability to direct the relevant activities of the subsidiary, has exposure or right to variable returns from its involvement
in the subsidiary and has the ability to use its power to affect its returns. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control commences until the date that control ceases.
Intra-group balances and transactions, and any unrealised gains and losses arising from intra-group transactions, such as
property disposals and management fees, are eliminated in preparing the consolidated financial statements. Unrealised
gains arising from transactions with joint ventures are eliminated to the extent of the Group’s retained interest in the entity.
Unrealised losses are eliminated in the same way as unrealised gains except where the loss provides evidence of a reduction
in the net realisable value of current assets or an impairment in the value of non-current assets.
Non-controlling interests are shown as a line item within equity and comprise the non-controlling interests in subsidiaries
which are not directly or indirectly attributable to the Group. Non-controlling interests are assigned to one subsidiary as at both
31 December 2023 and 2022 (see note 3.4).
Measurement convention
The financial statements are prepared on the historical cost basis except for investment property (owned), investment property
(leased), investment property (under development), investments in subsidiaries and interest rate swaps all of which are stated
at their fair value.
182
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
NOTES TO THE FINANCIAL STATEMENTS continued
Going concern
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether
the Group can continue in operational existence for at least 12 months from the date of this report.
The Directors have considered a range of scenarios for future performance through the 2023/24 and 2024/25 academic years.
This included a base case assuming cash collection and performance for the 2023/24 academic year remains in line with current
expectations and sales performance for the 2024/25 academic year consistent with published guidance; and a reasonable worst-
case scenario where income for the 2024/25 academic year is impacted by reduced sales, equivalent to occupancy of around
90%. The Directors considered the net (£295 million) current liability position of the Group and were satisfied that it could be
met through available cash and undrawn debt. The impact of our ESG asset transition plans are included within the cash flows,
which have been modelled to align with the Group’s 2030 net zero carbon targets. Under each of these scenarios, the Directors
are satisfied that the Group has sufficient liquidity and will maintain covenant compliance over the next 12 months. To further
support the Directors’ going concern assessment, a ‘Reverse Stress Test’ was performed to determine the level of performance
at which adopting the going concern basis of preparation may not be appropriate. This involved assessing the minimum amount
of income required to ensure financial covenants would not be breached. Within the tightest covenant, occupancy could fall to
approximately 70% before there would be a breach. The Group has capacity for property valuations to fall by around 30% before
there would be a breach of LTV and gearing covenants in facilities where such covenants exist. Were income or asset values to fall
beyond these levels, the Group has certain cure rights, such that an immediate default could be avoided.
The Directors are satisfied that the possibility of such an outcome is sufficiently remote that adopting the going concern basis of
preparation is appropriate.
Accordingly, after making enquiries and having considered forecasts and appropriate sensitivities, the Directors have formed a
judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of these
financial statements.
Standards and interpretations effective in the current period
During the year the following new and revised standards and interpretations have been adopted and have not had a material
impact on the amounts reported in these financial statements:
IFRS 17 Insurance contracts.
IAS 1 (amendments) and IFRS Practice Statement 2 Disclosure of accounting policies.
IAS 8 Definition of accounting estimates.
IAS 12 Deferred tax related to assets and liabilities arising from a single transaction.
183
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 1: Basis of preparation continued
Impact of accounting standards and interpretations in issue but not yet effective
At the date of approval of these financial statements there are a number of new standards and amendments to existing
standards in issue but not yet effective. The Group has not adopted the new or amended standards in preparing these
consolidated financial statements.
The following new or amended standards and interpretations are not expected to have a significant impact on the Group’s
consolidated financial statements:
IAS 1 (amendments) Non-current liabilities with covenants and classification of liabilities as current or non-current.
IFRS 16 (amendments) Lease liability in a sale and leaseback.
IAS 7 and IFRS 7 (amendments) Disclosure of Supplier Finance Arrangements.
IFRS 10 (amendments) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture.
The impact of all other IFRS Standards not yet adopted is not expected to be material.
Critical accounting estimates and judgements
The Group’s significant accounting policies are stated in the relevant notes to the Group financial statements.
The preparation of financial statements requires management to exercise judgement in applying the Group’s accounting
policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities,
income and expenses.
Critical accounting judgements
The areas which involve a high degree of judgement or complexity in applying the accounting policies of the Group are explained
in more detail in the accounting policy descriptions in the related notes to the financial statements.
The areas where accounting judgements have the most significant impact on the financial statements of the Group are
as follows:
Classification of joint venture vehicles (note 3.4).
Key sources of estimation uncertainty
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis with revisions recognised in the period in which the estimates are
revised and in any future periods affected.
The areas involving the most sensitive estimates and assumptions that are significant to the financial statements are set out
below and in more detail in the related notes:
Valuation of investment property and investment property under development (note 3.1).
Valuation of provisions for cladding remediation (note 5.5).
NOTES TO THE FINANCIAL STATEMENTS continued
184
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Section 2: Results for the year
This section focuses on the results and performance of the Group and provides a reconciliation between the primary
statements and EPRA performance measures. On the following pages you will find disclosures explaining the Group’s
results for the year, segmental information, taxation, earnings and net tangible asset value (NTA) per share.
The Group uses EPRA earnings, adjusted earnings and NTA movement as key comparable indicators across other
real estate companies in Europe. EPRA earnings, adjusted earnings and NTA movement are Alternative Performance
Measures (APMs), further details of which are set out in section 8.
IFRS performance measures
2023 2022 2023 2022
Note £m £m pps pps
Profit
*
2.2b
102.5
350.5
24.7p
87.7p
Net assets
*
2.3d
4,067.0
3 ,787.5
931p
944p
* Profit after tax represents profit attributed to the owners of the Company, and net assets represents equity attributable to the owners of
the Company.
EPRA performance measures
2023 2022 2023 2022
Note £m £m pps pps
EPRA earnings
2.2c
176.1
157.3
42.4p
39.4p
Adjusted earnings
2.2c
184.3
163.4
44.3p
40.9p
EPRA NTA
2.3d
4,014.7
3,716.7
920p
927p
**
** Adjusted earnings are calculated as EPRA earnings after adding back software as a service costs previously capitalised (net of deferred tax)
and abortive costs (see note 2.2a) , in order to reflect the performance of the Group’s underlying operating activities.
2.1 Segmental information
The Board of Directors monitors the business along two activity lines, Operations and Property. The reportable segments for the
years ended 31 December 2023 and 31 December 2022 are Operations and Property.
The Group undertakes its Operations and Property activities directly and through joint ventures with third parties.
The joint ventures are an integral part of each segment and are included in the information used by the Board to monitor
the business.
Detailed analysis of the performance of each of these reportable segments is provided in the following sections 2.2 to 2.3.
The Group’s properties are located exclusively in the United Kingdom. The Group therefore has one geographical segment.
2.2 Earnings
EPRA earnings and adjusted earnings amends IFRS measures by removing principally the unrealised investment property
valuation gains and losses such that users of the financial statements are able to see the extent to which dividend payments
(dividend per share) are underpinned by earnings arising from operational activity. In 2023 and 2022, software as a service
costs, which were previously capitalised under the existing intangibles policy have been excluded from adjusted earnings (net of
deferred tax), to align with the International Financial Reporting Interpretations Committee (‘IFRIC’) agenda decision in 2021. In
consideration of EPRA’s focus on presenting clear comparability in results from recurring operational activities, in 2022 adjusted
earnings also excludes abortive costs relating to an aborted acquisition. The reconciliation between profit attributable to owners
of the Company and EPRA earnings is available in note 2.2b.
The Operations segment manages rental properties, owned directly by the Group or by joint ventures. Its revenues are derived
from rental income and asset management fees earned from joint ventures. The way in which the Operations segment adds
value to the business is set out in the Operations review on pages 32–35. The Operations segment is the main contributor to
adjusted earnings and adjusted EPS and these are therefore the key indicators which are used by the Board to monitor the
Groups financial performance.
The Board does not manage or monitor the Operations segment through the balance sheet and therefore no segmental
information for assets and liabilities is provided for the Operations segment.
NOTES TO THE FINANCIAL STATEMENTS continued
185
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 2: Results for the year continued
2.2 Earnings continued
2.2a) EPRA earnings
2023
Share of joint ventures
Group on
Unite EPRA basis
Students USAF LSAV Total
£m £m £m £m
Rental income
259.2
57.5
52.8
369.5
Property operating expenses
(79.8)
(20.0)
(13.2)
(113.0)
Net operating income
179.4
37. 5
39.6
256.5
Management fees
21.4
(4.5)
16.9
Overheads
(32.2)
(0.4)
(0.5)
(33.1)
Interest on lease liabilities
(7.7)
(7.7)
Net financing costs
(22.9)
(9.4)
(15.1)
(47.4)
Operations segment result
138.0
23.2
24.0
185.2
Property segment result
(2.7)
(2.7)
Unallocated to segments
(6.0)
(0.2)
(0.2)
(6.4)
EPRA earnings
129.3
23.0
23.8
176.1
Software as a service costs
8.2
8.2
Adjusted earnings
137.5
23.0
23.8
184.3
Included in the above is rental income of £19.0 million and property operating expenses of £10.2 million relating to sale and leaseback properties.
Included in the above is also rental income of £3.8 million and property operating expenses of £1.2 million, relating to a build to rent property.
Unallocated to segments includes the fair value of share-based payments of (£3.4 million), costs due to leadership changes of (£2.9 million),
contributions to the Unite Foundation and social causes of (£1.6 million), a deferred tax credit of £2.5 million and current tax charge of (£1.0
million). Depreciation and amortisation totalling (£6.3 million) is included within overheads.
The software as a service costs are presented net of deferred tax of £2.8 million.
2022
Share of joint ventures
Group on
Unite EPRA basis
Students USAF LSAV Total
£m £m £m £m
Rental income
241.7
48.8
49.2
339.7
Property operating expenses
(72.0)
(15.9)
(10.8)
(98.7)
Net operating income
169.7
32.9
38.4
241.0
Management fees
21.4
(4.0)
17.4
Overheads
(32.5)
(0.7)
(0.6)
(33.8)
Interest on lease liabilities
(8.1)
(8.1)
Net financing costs
(33.4)
( 7.7)
(13.8)
(54.9)
Operations segment result
117.1
20.5
24.0
161.6
Property segment result
(1.2)
(1.2)
Unallocated to segments
(2.8)
(0.2)
(0.1)
(3.1)
EPRA earnings
113.1
20.3
23.9
157. 3
Abortive costs
1.5
1.5
Software as a service costs previously capitalised
4.6
4.6
Adjusted earnings
119.2
20.3
23.9
163.4
Included in the above is rental income of £18.1 million and property operating expenses of (£9.7 million) relating to sale and leaseback properties.
Also included in the above is rental income of £0.7 million and property operating expenses of (£0.2 million), relating to a build-to-rent property.
Unallocated to segments includes abortive costs of (£1.5 million), the fair value of share-based payments of (£1.6 million), contributions to the
Unite Foundation of (£0.6 million), a deferred tax credit of £1.3 million and current tax charge of (£0.7 million). Depreciation and amortisation
totalling (£7.8 million) is included within overheads.
The software as a service costs capitalised under the existing Intangibles policy in the prior year are presented net of deferred tax of £1.5 million.
NOTES TO THE FINANCIAL STATEMENTS continued
186
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
2.2 Earnings continued
2.2b) IFRS reconciliation to EPRA earnings and adjusted earnings
EPRA earnings excludes movements relating to changes in values of investment properties (owned, leased and under development),
profits/losses from the disposal of properties and swap/debt break costs which are included in the profit reported under IFRS.
EPRA earnings and adjusted earnings reconcile to the profit attributable to owners of the Company as follows:
2023 2022
Note £m £m
Profit attributable to owners of the Company
102.5
350.5
Net valuation losses/(gains) on investment property (owned)
3.1
37.2
(112.7)
Property disposals (owned)
(11.8)
15.6
Net valuation losses on investment property (leased)
3.1
10.4
9.3
Amortisation of fair value of debt recognised on acquisition
(4.3)
(4.3)
Share of joint venture losses/(gains) on investment property
3.4b
21.9
(32.3)
Share of joint venture property disposals
3.4b
3.5
0.9
Mark to market changes on interest rate swaps
4.3
17.2
(70.7)
Current tax relating to property disposals
(0.1)
(0.2)
Deferred tax
2.5d
(0.2)
0.7
Non-controlling interest share of reconciling items
*
(0.2)
0.5
EPRA earnings
2.2a
176.1
157. 3
Software as a service costs
3.2
8.2
4.6
Abortive costs
1.5
Adjusted earnings
2.2a
184.3
163.4
* The non-controlling interest, arises as a result of the Company not owning 100% of the share capital of one of its subsidiaries, USAF (Feeder)
Guernsey Limited. More detail is provided in note 3.4.
2.2c) Earnings per share
Basic EPS calculation is based on the earnings attributable to the equity shareholders of The Unite Group PLC and the weighted
average number of shares which have been in issue during the year. Basic EPS is adjusted in line with EPRA guidelines in order to
allow users to compare the business performance of the Group with other listed real estate companies in a consistent manner
and to reflect how the business is managed on a day-to-day basis.
The calculations of basic and EPRA EPS and adjusted EPS for the year ended 31 December 2023 and 2022 are as follows:
2023 2022 2023 2022
Note £m £m pps pps
Earnings
Basic
102.5
350.5
24.7p
87.7p
Diluted
102.5
350.5
24.6p
87.6p
EPRA
2.2b
176.1
157.3
42.4p
39.4p
Diluted EPRA
42.2p
39.3p
Adjusted
2.2b
184.3
163.4
44.3p
40.9p
Diluted adjusted
44.2p
40.8p
2023
2022
Weighted average number of shares (thousands)
Basic
415,733
399,581
Dilutive potential ordinary shares (share options)
1,165
584
Diluted
416,898
400,165
Movements in the weighted average number of shares have resulted from the issue of shares arising from the capital raise in
July 2023, employee share-based payment schemes and the scrip dividend.
In 2023, there were 16,505 options excluded from the potential dilutive shares that did not affect the diluted weighted average
number of shares (2022: 19,015).
NOTES TO THE FINANCIAL STATEMENTS continued
187
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 2: Results for the year continued
2.3 Net assets
2.3a) EPRA NTA
EPRA NTA makes adjustments to IFRS measures by removing the fair value of financial instruments and the carrying value of
intangibles. The reconciliation between IFRS NAV and EPRA NTA is available in note 2.3c.
The Group’s Property business undertakes the acquisition and development of properties. The way in which the Property
segment adds value to the business is set out in the Property review on pages 36–40.
2023
Share of JVs
Unite See-
Students USAF LSAV through
£m £m £m £m
Investment property (owned)
*
3,727.8
827.8
954.7
5,510.3
Investment property (leased)
84.7
84.7
Investment property (under development)
174.7
174.7
Total property portfolio
3,987.2
827.8
954.7
5,769.7
Debt
(1,067.6)
(243.5)
(337.0)
(1,64
8.1)
Lease liabilities
(83.8)
(83.8)
Cash
37.5
18.2
21.5
77.2
Net debt
(1,113.9)
(225.3)
(315.5)
(1,654.7)
Other assets and (liabilities)
(48.3)
(22.3)
(29.7)
(100.3)
EPRA NTA
2,825.0
580.2
609.5
4,014.7
Loan to value
26%
27%
33%
28%
Loan to value post IFRS 16
28%
27%
33%
29%
**
2022
Share of JVs
Unite See-
Students USAF LSAV through
£m £m £m £m
Investment property (owned)
3,623.4
813.0
960.4
5,396.8
Investment property (leased)
90.3
90.3
Investment property (under development)
202.7
202.7
Total property portfolio
3,916.4
813.0
960.4
5,689.8
Debt
(1, 247.8)
(239.8)
(385.2)
(1,872.8)
Lease liabilities
(90.4)
(90.4)
Cash
38.0
35.6
65.6
139.2
Net debt
(1,300.2)
(204.2)
(319.6)
(1,824.0)
Other assets and (liabilities)
(95.1)
(33.6)
(20.4)
(149.1)
EPRA NTA
2 ,521.1
575.2
620.4
3,716.7
Loan to value
32%
25%
33%
31%
Loan to value post IFRS 16
33%
25%
33%
32%
**
* Investment property (owned) includes assets classified as held for sale in the IFRS balance sheet.
** LTV calculated excluding investment properties (leased) and the corresponding lease liabilities. LTV is an APM – see section 8.
NOTES TO THE FINANCIAL STATEMENTS continued
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2.3 Net assets continued
2.3b) Movement in EPRA NTA during the year
Contributions to EPRA NTA by each segment during the year is as follows:
2023
Share of JVs
Unite See-
Students USAF LSAV through
Note £m £m £m £m
Operations
Operations segment result
2.2a
137.8
23.3
24.1
185.2
Add back amortisation of intangibles
3.3b
5.2
5.2
Total Operations
143.0
23.3
24.1
190.4
Property
Rental growth
185.2
41.8
56.1
286.7
Yield movement
(215.9)
(34.4)
(85.7)
(339.6)
Disposal gains/(losses)
11.8
(3.7)
0.3
8.4
Investment property (losses)/gains (owned)
*
(18.9)
3.7
(29.3)
(44.5)
Investment property losses (leased)
3.1
(10.4)
(10.4)
Investment property losses (under development)
3.1
(6.6)
(6.6)
Pre-contract/other development costs
2.2a
(2.8)
(2.8)
Total Property
(38.7)
3.7
(29.3)
(64.3)
Unallocated
Shares issued
294.9
294.9
Investment in joint ventures
27.3
(21.8)
(5.5)
Dividends paid
(117. 3)
(117.3)
Acquisition of intangibles
(1.6)
(1.6)
Share-based payment charge
(3.4)
(3.4)
Other
(0.4)
(0.2)
(0.2)
(0.8)
Total Unallocated
199.6
(22.0)
(5.7)
172.0
Total EPRA NTA movement in the year
303.9
5.0
(10.9)
298.0
Total EPRA NTA brought forward
2,521.1
575.2
620.4
3,716.7
Total EPRA NTA carried forward
2,825.0
580.2
609.5
4,014.7
* Investment property gains (owned) includes gains on assets classified as held for sale in the IFRS balance sheet.
The £0.8 million Other balance within the Unallocated segment includes the purchase of own shares of (£0.6 million),
contributions to the Unite Foundation and other social causes of (£1.6 million), tax credits of £1.1 million and other costs of
(£0.3 million).
NOTES TO THE FINANCIAL STATEMENTS continued
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 2: Results for the year continued
2.3 Net assets continued
2.3b) Movement in EPRA NTA during the year continued
2022 Share of JVs
Unite See-
Students USAF LSAV through
Note £m £m £m £m
Operations
Operations segment result
2.2a
117.1
20.5
24.0
161.6
Add back amortisation of intangibles
3.3b
5.9
5.9
Total Operations
123.0
20.5
24.0
167. 5
Property
Rental growth
117.1
0.5
32.6
150.2
Yield movement
(11.0)
2.2
(3.0)
(11.8)
Disposal losses
(15.6)
(0.9)
(16.5)
Investment property gains (owned)
90.5
1.8
29.6
121.9
Investment property losses (leased)
3.1
(9.3)
(9.3)
Investment property gains (under development)
3.1
6.6
6.6
Pre-contract/other development costs
2.2a
(1.2)
(1.2)
Total Property
86.6
1.8
29.6
118.0
Unallocated
Shares issued
1.1
1.1
Investment in joint ventures
(102.4)
122.0
(19.6)
Dividends paid
(96.4)
(96.4)
Acquisition of intangibles
3.3b
(1.9)
(1.9)
Abortive costs
(1.5)
(1.5)
Other
(1.8)
(0.3)
(0.2)
(2.3)
Total Unallocated
(202.9)
121.7
(19.8)
(101.0)
Total EPRA NTA movement in the year
6.7
144.0
33.8
184.5
Total EPRA NTA brought forward
2,514.4
431.2
586.6
3,532.2
Total EPRA NTA carried forward
2,521.1
575.2
620.4
3,716.7
The £2.3 million Other balance within the Unallocated segment includes the purchase of own shares of (£1.7 million),
contributions to the Unite Foundation of (£0.6 million), tax credits of £0.1 million and other costs of (£0.1 million).
NOTES TO THE FINANCIAL STATEMENTS continued
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2.3 Net assets continued
2.3c) Reconciliation to IFRS
To determine EPRA NTA, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments, associated
tax and the carrying value of intangibles.
To determine EPRA NRV, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments, associated
tax and real estate transfer tax.
To determine EPRA NDV, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments,
but include the fair value of fixed interest rate debt and the carrying value of intangibles.
The net assets reported under IFRS reconcile to EPRA NTA, NRV and NDV as follows:
2023
NTA NRV NDV
£m £m £m
Net assets reported under IFRS
4,067.0
4,067.0
4,067.0
Mark to market interest rate swaps
(58.1)
(58.1)
Unamortised swap gain
(1.2)
(1.2)
(1.2)
Mark to market of fixed rate debt
35.0
Unamortised fair value of debt recognised on acquisition
15.2
15.2
15.2
Current tax
0.7
0.7
Deferred tax
0.4
0.4
Intangibles per IFRS balance sheet
(9.3)
Real estate transfer tax
306.7
EPRA reporting measure
4,014.7
4,330.7
4,116.0
2022
NTA NRV NDV
£m £m £m
Net assets reported under IFRS
3,787.5
3,787.5
3,787.5
Mark to market interest rate swaps
( 77.4)
( 77.4)
Unamortised swap gain
(1.4)
(1.4)
(1.4)
Mark to market of fixed rate debt
154.7
Unamortised fair value of debt recognised on acquisition
19.5
19.5
19.5
Current tax
0.7
0.7
Intangibles per IFRS balance sheet
(12.2)
Real estate transfer tax
300.7
EPRA reporting measure
3,716.7
4,029.6
3,960.3
NOTES TO THE FINANCIAL STATEMENTS continued
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 2: Results for the year continued
2.3 Net assets continued
2.3d) NTA, NRV and NDV per share
The Board uses EPRA NTA to monitor the performance of the Property segment on a regular basis.
2023 2022 2023 2022
Note £m £m pps pps
Net assets
4,067.0
3,787.5
931
944
EPRA NTA
2.3a
4,014.7
3,716.7
921
928
EPRA NTA (diluted)
2.3a
4,018.6
3,719.7
920
927
EPRA NRV
2.3c
4,330.7
4,029.6
994
1,004
EPRA NRV (diluted)
4,334.6
4,032.6
992
1,005
EPRA NDV
2.3c
4,116.0
3,960.3
944
987
EPRA NDV (diluted)
4,119.9
3,963.3
943
988
Number of shares (thousands)
2023
2022
Basic
435,855
400,292
Outstanding share options
1,165
895
Diluted
437,019
401,187
2.4 Revenue and costs
Accounting policies
The Group recognises revenue from the following major sources:
Rental income
Management and performance fees
Acquisition fees
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of its service to
a customer.
Rental income
Rental income comprises direct-lets to students and leases to universities and commercial tenants. This revenue is recognised in the
income statement over the length of the tenancy period as the Group provides the services to its customers. Included in the rental
contract is the use of utilities, broadband services and contents insurance. The Group does not offer these services as stand-alone
products. Under IFRS 15 the Group does not consider these services to be individually material and has, consequently, bundled
these obligations as a single contract. The transaction prices for rental income are explicitly stated in each contract. A contract
liability can result from payments received in advance, until the date at which control is transferred to the customer and at that
point the revenue begins to be recognised over the tenancy period. Lease incentives are sometimes recognised on commercial
units; these are recognised as an integral part of the total rental income and spread over the term of the lease.
The Group recognises rental income derived from contracts over 12 months in length in the Income Statement on a straight-
line basis in accordance with IFRS 16.
Management and performance fees
The Group acts as asset and property manager for USAF and LSAV and receives management fees in relation to these services.
Revenue from these fees is recognised on a straight-line basis over time as the joint ventures simultaneously receive and
consume benefits as the Group performs its management obligations which are determined by the services provided over
the course of each academic year, and this reflects the profile of activities being performed. Detailed calculations in order to
determine the transaction prices for these revenue streams are held within the joint venture agreements.
NOTES TO THE FINANCIAL STATEMENTS continued
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2.4 Revenue and costs continued
The Group is entitled to a USAF performance fee if the joint venture outperforms certain benchmarks. The Group recognises
a USAF performance fee at a point in time in the year to which the fee relates. The Group initially assesses the probability of
a fee being earned and its transaction price at half year and adjusts for any potential risks to receiving this income at year-
end, when the achieved outturn is known. The USAF performance fee is settled within 12 months of the year to which the
fee relates and the Group receives an enhanced equity interest in USAF as consideration for the performance fee.
The Group is entitled to a LSAV performance fee if the joint venture outperforms certain benchmarks over its life ending
in 2032. The Group recognises an LSAV performance fee at an amount which is considered highly probable to become due
based upon estimates of the future performance of the joint venture; such estimates include future rental income and the
discount rate (yield). Prior to the maturity of the joint venture, the Group pro-rates the total LSAV performance fee over the
life of the joint venture and recognises a proportion of the fee, only where sufficient certainty over outperformance of the
benchmark is determined to exist.
As per IFRS 15, the estimated amount of variable consideration is included in the transaction price only to the extent that it is
highly probable that a significant reversal in the amount of revenue recognised will not occur when the uncertainty associated
with the variable consideration is resolved. The performance fee is variable and dependent on meeting specific performance
targets. Accordingly where there is too much uncertainty over the cumulative outperformance of the benchmarks, particularly
in earlier periods of the performance fee period, which cover each 10-year term of the venture, then no amounts of performance
fee can be recognised as it is not highly probable that the performance fee will be earned.
Management and performance fees are presented in revenue net of the Group’s share of the corresponding expense within
the relevant fund.
At 31 December 2023, no amounts are deemed to meet the highly probable criteria and therefore we have not disclosed any
future fees receivable from these ongoing contracts.
Acquisition fees
The Group receives acquisition fees from its joint venture partners. This revenue is linked to the acquisition of land or property
and is therefore recognised at the point in time that control of the asset is transferred to the joint venture. The transaction
price for this revenue stream is stipulated in the joint venture agreement as a percentage of the value of the acquisition.
No such land or property acquisitions have occurred in 2023 or 2022.
The Group earns revenue from the following activities:
2023 2022
Note £m £m
Rental income
*
Operations segment
2.2a
259.2
241.7
Management fees
Operations segment
17.1
17.8
276.3
259.5
Impact of non-controlling interest on management fees
(0.2)
(0.2)
Total revenue
276.1
259.3
* EPRA earnings includes £369.5 million (2022: £339.7 million) of rental income, which is comprised of £259.2 million (2022: £241.7 million)
recognised on wholly-owned assets and a further £110.3 million (2022: £98.0 million) from joint ventures, which is included in share of joint
venture profit/(loss) in the consolidated income statement.
The cost of sales included in the consolidated income statement includes property operating expenses of £76.8 million
(2022: £70.3 million).
NOTES TO THE FINANCIAL STATEMENTS continued
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 2: Results for the year continued
2.5 Tax
As a REIT, rental profits and gains on disposal of investment properties are exempt from corporation tax. The Group pays UK
corporation tax on the profits from its residual business, including management fees received from joint ventures, together with
UK income tax on rental income that arises from investments held by offshore subsidiaries in which the Group holds a non-
controlling interest.
Accounting policies
The tax charge for the year is recognised in the income statement and the statement of comprehensive income, according
to the accounting treatment of the related transaction. The tax charge comprises both current and deferred tax.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax
payable in respect of previous years. The current tax charge is based on tax rates that are enacted or substantively enacted
at the year-end.
Deferred tax arises due to certain temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and those for taxation purposes. Temporary differences relating to investments in subsidiaries and
joint ventures are not provided for to the extent that they will probably not reverse in the foreseeable future. The amount
of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities.
As a REIT, rental profits and gains on disposal of investment properties and property rich investments are exempt from
corporation tax. As a result, no deferred tax provision has been recognised at the balance sheet date in respect of property
assets or units in USAF and LSAV held by members of the REIT Group.
2.5a) Tax – income statement
The total taxation charge/(credit) in the income statement is analysed as follows:
2023 2022
£m £m
Corporation tax on residual business income arising in UK companies
1.0
0.5
Income tax on UK rental income arising in non-UK companies
0.4
0.4
Adjustments in respect of prior periods
(0.2)
(0.2)
Current tax charge
1.2
0.7
Origination and reversal of temporary differences
(2.3)
(1.0)
Effect of change in tax rate
Adjustments in respect of prior periods
0.4
Deferred tax (credit)
(2.3)
(0.6)
Total tax (credit)/charge in income statement
(1.1)
0.1
The movement in deferred tax provided is shown in more detail in note 2.5d.
NOTES TO THE FINANCIAL STATEMENTS continued
194
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2.5 Tax continued
2.5a) Tax - income statement continued
In the income statement, a tax charge of £1.2 million arises on a profit before tax of £102.5 million. The taxation charge that
would arise at the standard rate of UK corporation tax is reconciled to the actual tax charge as follows:
2023 2022
£m £m
Profit before tax
102.5
351.9
Income tax using the UK corporation tax rate of 25% (2022: 19%)
24.1
67.0
Property rental business profits exempt from tax in the REIT Group
(45.7)
(28.4)
Property revaluations not subject to tax
16.2
(25.8)
Mark to market changes in interest rate swaps not subject to tax
3.0
(13.4)
Effect of indexation on investments
0.1
Effect of other permanent differences
1.3
0.5
Effect of tax deduction transferred to equity on share schemes
0.2
0.3
Rate difference on deferred tax
(0.4)
Prior year adjustments
(0.2)
0.2
Total tax (credit)/charge in income statement
(1.1)
0.1
As a UK REIT, the Group is exempt from UK corporation tax on the profits from its property rental business. Accordingly,
the element of the Group’s profit before tax relating to its property rental business has been separately identified in the
reconciliation above.
No deferred tax asset has been recognised in respect of the Group’s accumulated tax losses on the basis that they are not
expected to be utilised in future periods. At 31 December 2023 these losses totalled £15.3 million (2022: £15.3 million).
Although the Group does not pay UK corporation tax on the profits from its property rental business, it is required to distribute
90% of the profits from its property rental business after accounting for tax adjustments as a Property Income Distribution (PID).
PIDs are charged to tax in the same way as property income in the hands of the recipient. For the year ended 31 December 2023
the required PID is expected to be fully paid by the end of 2024.
2.5b) Tax – other comprehensive income
Within other comprehensive income a tax charge totalling £nil (2022: £nil) has been recognised.
2.5c) Tax – statement of changes in equity
Within the statement of changes in equity a tax credit totalling £0.1 million (2022: £0.3 million charge) has been recognised
representing deferred tax. An analysis of this is included below in the deferred tax movement table.
2.5d) Tax – balance sheet
The table below outlines the deferred tax (assets)/liabilities that are recognised in the balance sheet, together with their
movements in the year:
2023
At 31 Charged/ Charged/
At 31
December (credited) (credited)
December
2022 in income
in equity
2023
£m £m
£m
£m
Investments
0.4
0.4
Property, plant and machinery and provisions
(2.8)
(2.1)
(4.9)
Share schemes
(1.2)
(0.4)
0.5
(1.1)
Tax value of carried forward losses recognised
0.2
(0.2)
Net tax assets
(3.6)
(2.3)
*
0.3
(5.6)
* The £2.3 million credit above includes tax movements totalling £2.5 million in respect of Property, plant and machinery, Share schemes,
and Losses which are included in EPRA, which is why they are not included in the IFRS reconciliation in note 2.2b); removing them results in
achieving the £0.2 million charge which is excluded as per EPRA’s best practice recommendations.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 2: Results for the year continued
2.5 Tax continued
2.5d) Tax – balance sheet
2022
At 31 Charged/ Charged/
At 31
December (credited) (credited)
December
2021 in income
in equity
2022
£m £m
£m
£m
Investments
0.4
0.4
Property, plant and machinery and provisions
(1.2)
(1.6)
(2.8)
Share schemes
(1.8)
0.3
0.3
(1.2)
Tax value of carried forward losses recognised
0.3
(0.3)
Net tax assets
(3.0)
(0.6)
*
(3.6)
* The £0.6 million credit above includes tax movements totalling £1.3 million in respect of Property, plant and machinery, Share schemes,
and Losses which are included in EPRA, which is why they are not included in the IFRS reconciliation in note 2.2b); removing them results
in achieving the £0.7 million movement which is excluded as per EPRA’s best practice recommendations.
The deferred tax liability at 31 December 2023 has been calculated based on the rate at which it is expected to reverse.
As a REIT, disposals of investment property and property rich investments are exempt from tax and as a result no deferred tax
liability has been recognised in relation to these assets.
Company
Deferred tax has not been recognised on temporary differences of £1.7 million (2022: £1.7 million) in respect of revaluation of
subsidiaries and investment in joint ventures as it is considered unlikely that these investments will be divested.
2.6 Audit fees
During the year, the Group obtained the following services from the Company’s auditor and its associates:
2023 2022
£m £m
Fees payable to the Group’s auditors for the audit of the Company and
consolidated financial statements
0.5
0.5
Fees payable to the Group’s auditors for other services to the Group:
– Audit of the financial statements of subsidiaries
0.1
0.1
Total audit fees payable to the Group’s auditors
0.6
0.6
Audit-related assurance services
0.1
0.1
Other services
Total non-audit fees
0.1
0.1
Non-audit fees in both 2023 and 2022 relate entirely to services provided in respect of the half year review.
Details on the Company’s policy on the use of the auditor for non-audit services is also set out in the Audit & Risk Committee
report on pages 114–119.
No services were provided pursuant to contingent fee arrangements.
NOTES TO THE FINANCIAL STATEMENTS continued
196
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Section 3: Asset management
The Group holds its property portfolio directly and through its joint ventures. The performance of the property
portfolio, whether wholly-owned or in joint ventures, is the key factor that drives net asset value (NAV), one of the
Group’s key performance indicators. The following pages provide disclosures about the Group’s investments in
property assets and joint ventures and their performance over the year.
3.1 Wholly-owned property assets
The Group’s wholly-owned property portfolio is held in four groups on the balance sheet at the carrying values detailed below.
In the Group’s EPRA NTA all these groups are shown at market value, except where otherwise stated.
i) Investment property (owned)
These are assets that the Group intends to hold for a long period to earn rental income or capital appreciation. The assets are
measured at fair value in the balance sheet with changes in fair value taken to the income statement.
ii) Investment property (leased)
These are assets the Group sold to institutional investors and simultaneously leased back. These right-of-use assets are
measured at fair value in the balance sheet with changes in fair value taken to the income statement.
iii) Investment property (under development)
These are assets which are currently in the course of construction and which will be transferred to Investment property on
completion. The assets are initially recognised at cost and are subsequently measured at fair value in the balance sheet with
changes in fair value taken to the income statement.
iv) Investment property classified as held for sale
These are assets whose carrying amount will be recovered through a sale transaction rather than to hold for long-term rental
income or capital appreciation. This condition is regarded as met only when the sale is highly probable and the investment
property is available for immediate sale in its present condition. Management must be committed to the sale which should be
expected to qualify for recognition as a completed sale within one year from the date of classification. The assets are measured
at fair value in the balance sheet, with changes in fair value taken to the income statement. They are presented as current assets
in the IFRS balance sheet.
Accounting policies
Investment property (owned) and investment property (under development)
Investment property (owned) and investment property (under development) are held at fair value.
The external valuation of property assets involves significant judgement and changes to the core assumptions: rental income,
occupancy and property management costs, as well as estimated future costs, could have a significant impact on the carrying
value of these assets. Further details of the valuation process are included below.
Construction and borrowing costs are capitalised if they are directly attributable to the acquisition and construction of
a property asset. Capitalisation of borrowing costs commences when the activities to prepare the asset are in progress
and expenditures and borrowing costs are being incurred. Capitalisation of borrowing costs continues until the assets are
substantially ready for their intended use but stops if development activities are suspended. If the resulting carrying amount of
the asset exceeds its recoverable amount, an impairment loss is recognised. The capitalisation rate is arrived at by reference to
the actual rate payable on borrowings for development purposes or, with regard to that part of the development cost financed
out of general borrowings, to the average rate. During the year the average capitalisation rate used was 6.4% (2022: 3.1%).
The recognition of acquisitions of investment property and land occurs at the date when control passes to Unite Group.
The recognition of disposals of investment property occurs on legal completion when control passes from Unite Group.
In accordance with IFRS 15, gains/(losses) from the disposal of investment property are recognised at a point in time.
Contingent consideration receivables are recognised on disposals where the amount of additional consideration is readily
identifiable. It is recognised at the constrained value determined by the amount that is highly probable to be receivable at
the time of the disposal, and any subsequent change in value is recognised in profit or loss in the later period.
Investment property (leased)
The Group holds certain investment property under historical sale and leaseback arrangements, acting as an intermediate
lessor and subleasing its right-of-use assets. For each leased property, the Group assesses whether a contract is or contains
a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability (see note
4.6a) with respect to all lease arrangements in which it is the lessee. The right-of-use assets are initially measured at cost in
accordance with IFRS 16 and subsequently at fair value in the balance sheet with changes in fair value taken to the income
statement in accordance with IAS 40.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 3: Asset management continued
3.1 Wholly-owned property assets continued
Valuation process
The valuations of the properties are performed twice a year on the basis of valuation reports prepared by external, independent
valuers, having an appropriate recognised professional qualification. The fair values are based on market values as defined in the
RICS Appraisal and Valuation Manual, issued by the Royal Institution of Chartered Surveyors, and taking account of committed
fire safety and external facade works as provided by Unite. CB Richard Ellis Ltd, Jones Lang LaSalle Ltd and Messrs Knight Frank
LLP, Chartered Surveyors were the valuers in the years ended 31 December 2023 and 2022.
The Group has transferred the 2023 addition in respect of committed spend on fire safety and façade works taking place in 2024/
2025 to property valuations, which is presented as a deduction to fair value below.
The valuations are based on:
Information provided by the Group such as current rents, occupancy, operating costs, terms and conditions of leases and
nomination agreements and capital expenditure. This information is derived from the Group’s financial systems and is subject
to the Group’s overall control environment.
Assumptions and valuation models used by the valuers – the assumptions are typically market related, such as yield and discount
rates. These are based on their professional judgement and market observation.
The information provided to the valuers – and the assumptions and the valuation models used by the valuers – are reviewed by
the Property Leadership Team and the CFO. This includes a review of the fair value movements over the year.
The fair value of the Group’s wholly-owned properties and the movements in the carrying value of the Group’s wholly-owned
property portfolio during the year ended 31 December 2023 are shown in the table below.
Investment
Investment Investment property
property property (under
(owned) (leased) development) Total
£m £m £m £m
At 1 January 2023
3,623.4
90.3
202.7
3,916.4
Additions
Cost capitalised
66.5
4.8
58.9
130.2
Interest capitalised
8.4
8.4
Transfer from investment property under development
88.7
(88.7)
Transfer from work in progress
Transfer to assets held for sale
(33.5)
(33.5)
Disposals
Valuation gains
121.1
32.4
153.5
Valuation losses
(151.7)
(10.4)
(39.0)
(201.1)
Net valuation (losses)
(30.6)
(10.4)
(6.6)
(47.6)
Committed fire safety and external facade works
(20.2)
(20.2)
Carrying and market value at 31 December 2023
3,694.3
84.7
174.7
3,953.7
NOTES TO THE FINANCIAL STATEMENTS continued
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3.1 Wholly-owned property assets continued
Valuation process continued
The fair value of the Group’s wholly-owned properties and the movements in the carrying value of the Group’s wholly-owned
property portfolio during the year ended 31 December 2022 are shown in the table below.
2022
Investment
Investment Investment property
property property (under
(owned) (leased) development) Total
£m £m £m £m
At 1 January 2022
3,095.1
97.7
324.1
3,516.9
Additions
71.1
71.1
Cost capitalised
38.6
1.9
187.7
228.2
Interest capitalised
0.5
5.9
6.4
Transfer from work in progress
326.5
(326.5)
Transfer to assets classified as held for sale
4.9
4.9
Disposals
(14.5)
(14.5)
Valuation gains
168.6
19.4
188.0
Valuation losses
(62.5)
(9.3)
(12.8)
(84.6)
Net valuation gains/(losses)
106.1
(9.3)
6.6
103.4
Carrying and market value at 31 December 2022
3,623.4
90.3
202.7
3,916.4
Assets classified as held for sale at 31 December 2023 are comprised of £33.5 million of investment property (owned) less (£7.8
million) costs to sell – the amounts are presented net in the balance sheet at £25.7 million (£nil). Assets held for sale are reported
within the Operations segment and represent a portfolio of properties (split across the Group and joint ventures) intended to be
sold within the next 12 months.
Included within investment properties at 31 December 2023 are £11.7 million (2022: £28.4 million) of assets held under a long
leasehold and £0.1 million (2022: £0.1 million) of assets held under short leasehold.
Total interest capitalised in investment properties (owned) and investment properties under development at 31 December 2023
was £66.4 million (2022: £63.5 million) on a cumulative basis.
Total internal costs capitalised in investment properties (owned) and investment properties under development was £77.1 million
at 31 December 2023 (2022: £70.0 million) on a cumulative basis.
Investment property (under development) includes interests in land not currently under construction totalling £8.3 million
(2022: £136.3 million).
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 3: Asset management continued
3.1 Wholly-owned property assets continued
Recurring fair value measurement
All investment and development properties are classified as Level 3 in the fair value hierarchy.
2023 2022
Class of asset £m £m
London – rental properties
1,154.9
1,212.8
Prime regional – rental properties
1,156.0
1,105.6
Major regional – rental properties
1,246.0
1,130.0
Provincial – rental properties
104.0
103.9
London – development properties
86.2
91.9
Prime regional – development properties
57.0
32.4
Major regional – development properties
22.0
64.1
London build-to-rent – rental properties
66.9
71.1
Prime regional build-to-rent – development properties
9.5
14.3
Investment property (owned)
3,902.5
3,826.1
Investment property (leased)
84.7
90.3
Market value (including assets classified as held for sale)
3,987.2
3,916.4
Investment property (classified as held for sale)
(33.5)
Market value
3,953.7
3,916.4
The valuations have been prepared in accordance with the latest version of the RICS Valuation – Global Standards (incorporating
the International Valuation Standards) and the UK national supplement (the Red Book) based on net rental income, estimated
future costs, occupancy, property management costs and the net initial yield or discount rate.
Where the asset is leased to a university, the valuations also reflect the length of the lease, the allocation of maintenance and
insurance responsibilities between the Group and the lessee, and the market’s general perception of the lessee’s creditworthiness.
The resulting valuations are cross-checked against comparable market transactions.
For development properties, the fair value is usually calculated by estimating the fair value of the completed property (using the
discounted cash flow method) less estimated costs to completion.
Fair value using unobservable inputs (Level 3)
2023 2022
£m £m
Opening fair value
3,916.4
3,516.9
Gains and (losses) recognised in income statement
(47.5)
103.4
Transfer to current assets classified as held for sale
(33.5)
Capital expenditure
138.5
310.6
Committed fire safety and external facade works
(20.2)
Disposals
(14.5)
Closing fair value
3,953.7
3,916.4
Investment property (classified as held for sale)
33.5
Closing fair value (including assets classified as held for sale)
3,987.2
3,916.4
NOTES TO THE FINANCIAL STATEMENTS continued
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3.1 Wholly-owned property assets continued
Quantitative information about fair value measurements using unobservable inputs (Level 3)
2023
Fair
value Valuation Weighted
£m
technique
Unobservable inputs
Range
average
London –
1,154.9
RICS Red Book
Net rental income (£ per week)
£206–£424 £324
rental properties Estimated future rent increase (% p.a.) 2%–4% 3%
Net initial yield/Discount rate (%) 4.0%–4.7% 4.3%
Prime regional –
1,156.0
RICS Red Book
Net rental income (£ per week)
£152–£270 £189
rental properties Estimated future rent increase (% p.a.) 2%–5% 3%
Net initial yield/Discount rate (%) 4.3%–6.7% 4.9%
Major regional –
1,246.0
RICS Red Book
Net rental income (£ per week)
£84–£189 £135
rental properties Estimated future rent increase (% p.a.) 2%–5% 3%
Net initial yield/Discount rate (%) 4.9%–7.2% 5.7%
Provincial –
104.0
RICS Red Book
Net rental income (£ per week)
£103–£162 £136
rental properties Estimated future rent increase (% p.a.) 2%–3% 3%
Net initial yield/Discount rate (%) 7.0%–21.7% 8.9%
Prime regional –
57.0
RICS Red Book
Estimated cost to complete (£m)
£50.0m–£52.0m £51.4m
development properties Net rental income (£ per week) £234–£246 £242
Estimated future rent increase (% p.a.) 3% 3%
Net initial yield/Discount rate (%) 4.4%–5.2% 4.7%
Major regional –
22.0
RICS Red Book
Estimated cost to complete (£m)
£19.4m–£124.1m £97.6m
development properties Net rental income (£ per week) £214 £214
Estimated future rent increase (% p.a.) 3% 3%
Net initial yield/Discount rate (%) 5.2% 5.2%
3,826.1
Investment property –
66.9
RICS Red Book
Net rental income (£ per week)
£412 £412
build-to-rent Estimated future rent increase (% p.a.) 3% 3%
Net initial yield/Discount rate (%) 4.1% 4.1%
Development property –
9.5
RICS Red Book
Estimated cost to complete (£m)
£12.6m £12.6m
build-to-rent Net rental income (£ per week) £278 £278
Estimated future rent increase (% p.a.) 3% 3%
Net initial yield/Discount rate (%) 4.4% 4.4%
3,902.5
Investment property –
84.7
Discounted
Net rental income (£ per week) £106–£207 £168
leased cash flows Estimated future rent increase (% p.a.) 1.8%–2.7% 2.3%
Discount rate (%) 6.3% 6.3%
Fair value at
31 December 2023
3,987.2
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 3: Asset management continued
3.1 Wholly-owned property assets continued
Quantitative information about fair value measurements using unobservable inputs (Level 3) continued
2022
Fair value Valuation Weighted
£m
technique
Unobservable inputs
Range
average
London –
1,212.8
RICS Red Book
Net rental income (£ per week)
£208–£392 £308
rental properties Estimated future rent increase (% p.a.) 2.0%–4.0% 3.0%
Net initial yield/Discount rate (%) 3.7%–4.5% 3.9%
Prime regional –
1,105.6
RICS Red Book
Net rental income (£ per week)
£148–£243 £163
rental properties Estimated future rent increase (% p.a.) 2.0%–5.0% 3.0%
Net initial yield/Discount rate (%) 4.1%–6.2% 4.7%
Major regional –
1,130.0
RICS Red Book
Net rental income (£ per week)
£99–£178 £128
rental properties Estimated future rent increase (% p.a.) 2.0%–3.0% 3.0%
Net initial yield/Discount rate (%) 4.5%–7.0% 5.7%
Provincial –
103.9
RICS Red Book
Net rental income (£ per week)
£107–£156 £123
rental properties Estimated future rent increase (% p.a.) 2.0%–3.0% 3.0%
Net initial yield/Discount rate (%) 6.8%–21.5% 8.6%
London –
91.9
RICS Red Book
Estimated cost to complete (£m)
£111.4m–£177.1m £150.2m
development properties Net rental income (£ per week) £183–£366 £248
Estimated future rent increase (% p.a.) 3.0% 3.0%
Net initial yield/Discount rate (%) 3.7% 3.7%
Prime regional –
32.4
RICS Red Book
Estimated cost to complete (£m)
£17.5m–£58.3m £44.7m
development properties Net rental income (£ per week) £171–£235 £184
Estimated future rent increase (% p.a.) 2.5%–3.0% 3.0%
Net initial yield/Discount rate (%) 4.3%–5.0% 4.5%
Major regional –
64.1
RICS Red Book
Estimated cost to complete (£m)
£18.2m–£28.4m £21.1m
development properties Net rental income (£ per week) £185–£287 £198
Estimated future rent increase (% p.a.) 3.0% 3.0%
Net initial yield/Discount rate (%) 4.9%–5.0% 4.9%
3,740.7
Investment property –
71.1
RICS Red Book
Net rental income (£ per week)
£359 £359
build-to-rent Estimated future rent increase (% p.a.) 3.0% 3.0%
Net initial yield/Discount rate (%) 3.9% 3.9%
Development property –
14.3
RICS Red Book
Estimated cost to complete (£m)
£12.8m–£20.4m £15.6m
build-to-rent Net rental income (£ per week) £170–£614 £312
Estimated future rent increase (% p.a.) 3.0% 3.0%
Net initial yield/Discount rate (%) 3.9%–4.3% 4.03%
3,826.1
Investment property –
90.3
Discounted
Net rental income (£ per week) £99–£191 £154
leased cash flows Estimated future rent increase (% p.a.) 1%–3% 2%
Discount rate (%) 6.3% 6.3%
Fair value at
31 December 2022
3,916.4
NOTES TO THE FINANCIAL STATEMENTS continued
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3.1 Wholly-owned property assets continued
Fair value sensitivity analysis
A decrease in net rental income or occupancy will result in a decrease in the fair value, whereas a decrease in the discount rate
(yield) will result in an increase in fair value. There are inter-relationships between these rates as they are partially determined
by market conditions. These two key sources of estimation uncertainty are considered to represent those most likely to have a
material impact on the valuation of the Group’s investment property (owned and development) within the next 12 months as a
result of reasonably possible changes in assumptions used. The potential effect of such reasonably possible changes has been
assessed by the Group and is set out below:
+5% -5%
Fair value at change in change in +25 bps -25 bps
31 December estimated net estimated net change in net change in net
2023 rental income rental income initial yield initial yield
Class of assets £m £m £m £m £m
Rental properties
London
1,154.9
1,234.0
1,116. 3
1,110.6
1, 247.6
Prime regional
1,156.0
1,213.6
1,098.8
1,099.7
1,218.9
Major regional
1,246.0
1,270.9
1,147.4
1,157.1
1,26
6.1
Provincial
104.0
110.8
100.2
102.5
108.7
Development properties
London
86.2
91.4
80.9
79.9
92.4
Prime regional
57.0
59.7
54.3
54.2
6 0.1
Major regional
22.0
23.0
20.9
21.0
23.1
Build-to-rent
London
66.9
70.2
63.7
63.5
70.8
Prime regional
9.5
10.0
9.0
9.0
10.1
Market value
3,902.5
4,083.6
3,691.4
3,697. 5
4,097.8
3.2 Inventories
Accounting policies
Inventories are shown at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion and selling expenses. All costs directly associated with the
purchase of land, and all subsequent qualifying expenditure is capitalised.
2023 2022
£m £m
Interests in land
25.3
11.4
Other stocks
0.9
1.4
Inventories
26.2
12.8
At 31 December 2023 and 31 December 2022 Interests in land includes conditionally exchanged schemes.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 3: Asset management continued
3.2 Inventories continued
Accounting policies
Leased assets
The Group assesses whether a contract is or contains a lease at its inception. The Group recognises a right-of-use asset and
a corresponding lease liability (see note 4.6a) with respect to all lease arrangements in which it is the lessee. Right-of-use
assets are initially measured at cost, which comprises a value set equal to the lease liability, adjusted for prepaid or accrued
lease payments and lease incentives. They are subsequently measured at this initial value less accumulated depreciation and
impairment losses.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Property, plant
and equipment mainly comprise leasehold improvements at the Group’s head office and London office as well as computer
hardware at these sites.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives. Freehold land is not
depreciated. The estimated useful lives are as follows:
Right-of-use assets Shorter of lease and economic life
Property, plant and equipment 4–7 years
Intangible assets
Software-as-a-Service (SaaS) arrangements
IAS 38 Intangible Assets – In March 2019, the IFRS Interpretations Committee (IFRIC), concluded that SaaS arrangements are
likely to be service arrangements, rather than booked as intangible or leased assets, because the customer only has a right to
use software on a supplier’s cloud infrastructure. Therefore, the supplier controls the software and not the customer.
Intangible assets predominantly comprise of on-premises computer software which allows customers to book online and
processes transactions within the sales cycle. The expenditure capitalised includes the cost of materials, direct labour and an
appropriate proportion of overheads. The assets are amortised on a straight-line basis over four to seven years, being the
estimated useful lives of the intangible assets, from the date they are available for use. Amortisation is charged to the income
statement within overheads.
In 2023, the Group identified that a portion of costs capitalised in 2022 met the definition of SaaS arrangements and an
adjustment of £6.1 million has been made to remove the amounts, which is reflected in 2022 adjusted earnings (net of
deferred tax).
3.3 Right of use assets and other non-current assets
3.3a) Right-of-use assets
2023
2022
Buildings Other Total Buildings Other Total
£m £m £m £m £m £m
Cost
At 1 January
5.0
1.3
6.3
5.8
1.3
7.1
Additions
0.4
0.4
Disposals
(0.5)
(0.5)
(0.8)
(0.4)
(1.2)
At 31 December
5.0
0.8
5.8
5.0
1.3
6.3
Amortisation
At 1 January
(2.9)
(0.7)
(3.6)
(2.9)
(0.6)
(3.5)
Amortisation charge for the year
(0.8)
(0.2)
(1.0)
(0.8)
(0.5)
(1.3)
Disposals
0.5
0.5
0.8
0.4
1.2
At 31 December
(3.7)
(0.4)
(4.1)
(2.9)
(0.7)
(3.6)
Carrying value at 1 January
2.1
0.6
2.7
2.9
0.7
3.6
Carrying value at 31 December
1.3
0.4
1.7
2.1
0.6
2.7
The Group leases several assets including office equipment and vehicles. The average lease term is three years.
NOTES TO THE FINANCIAL STATEMENTS continued
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3.3 Right of use assets and other non-current assets continued
3.3a) Right-of-use assets continued
Approximately 15% of the leases expired in the current financial year (2022: 44%). The expired contracts were not replaced and
therefore, there were £nil additions in 2023 (2022: £0.4 million).
The maturity analysis of lease liabilities is presented in note 4.6a.
Details of interest on lease liabilities and total cash outflows for leases are presented in notes 4.3 and 5.1.
3.3b) Other non-current assets
The Group’s other non-current assets can be analysed as follows:
2023
2022
Property, Property,
plant and Intangible plant and Intangible
equipment assets Total equipment assets Total
£m £m £m £m £m £m
Cost
At 1 January
13.6
67.0
80.6
12.6
65.1
77.7
Additions
0.9
1.6
2.6
1.0
8.0
9.0
Software as a service costs previously
(6.1)
(6.1)
capitalised
At 31 December
14.5
68.6
83.1
13.6
67.0
80.6
Depreciation and amortisation
At 1 January
(10.4)
(54.8)
(65.2)
(9.8)
(48.9)
(58.7)
Depreciation/amortisation charge
(0.7)
(4.5)
(5.2)
(0.6)
(5.9)
(6.5)
for the year
At 31 December
(11.1)
(59.3)
(70.4)
(10.4)
(54.8)
(65.2)
Carrying value at 1 January
3.2
12.2
15.4
2.8
16.2
19.0
Carrying amount at 31 December
3.4
9.3
12.7
3.2
12.2
15.4
Intangible assets include £1.9 million (2022: £7.0 million) of assets not being amortised as they are not yet ready for use.
Property, plant and equipment assets include £nil (2022: £nil) of assets not being depreciated as they are not ready for use.
At 31 December 2023 the Group had capital commitments of £nil (2022: £nil) relating to intangible assets and £nil (2022: £nil)
relating to property, plant and equipment.
3.4 Investments in joint ventures (Group)
Accounting policies
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement. The
consolidated financial statements include joint ventures initially at cost, subsequently increased or decreased by the Group’s
share of total gains and losses of joint ventures on an equity basis. Interest free joint venture investment loans are initially
recorded at fair value – the difference between the nominal amount and fair value being treated as an investment in the joint
venture. The implied discount is amortised over the contracted life of the investment loan.
The Directors consider that the agreements integral to its joint ventures result in the Group having joint control over the key
matters required to operate the joint ventures. A significant degree of judgement is exercised in this assessment due to the
complexity of the contractual arrangements.
USAF and LSAV are jointly owned entities that are accounted for as joint ventures. Due to the complexity of the contractual
arrangements and Unite Group’s role as manager of the joint venture vehicles, the assessment of joint control involves
judgements around a number of significant factors. These factors include how Unite Group as fund manager has the ability to
direct relevant activities such as acquisitions, disposals, capital expenditure for refurbishments and funding whether through
debt or equity. This assessment for USAF is complex because of the number of unit holders and how their rights are represented
through an Advisory Committee. For some of the activities it is not clear who has definitive control of the activities: in some
scenarios the Group can control, in others the Advisory Committee. However, for the activities which are considered to have
the greatest impact on the returns of USAF, acquisitions and equity financing, it has been determined that the Group and the
Advisory Committee have joint control in directing these activities and that on balance, it is appropriate to account for USAF as a
joint venture. The assessment for LSAV is more straightforward because the Group and GIC each own 50% of the joint venture
and there is therefore much clearer evidence that control over the key activities is shared by the two parties.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 3: Asset management continued
3.4 Investments in joint ventures (Group) continued
The Group has two joint ventures:
Group’s share of
assets/results Legal entity in which
Joint venture
2023
(2022)
Objective
Partner
Group has interest
The UNITE UK Student
29.5%
*
Operate student
Consortium of investors
UNITE UK Student
Accommodation Fund
(29.5%)
*
accommodation Accommodation Fund, a Jersey
(USAF) throughout the UK Unit Trust
London Student 50% Operate student GIC Real Estate Pte, Ltd LSAV Unit Trust, a Jersey Unit
Accommodation (50%) accommodation Real estate investment Trust and LSAV (Holdings) Ltd,
Venture (LSAV) in London and vehicle of the Government incorporated in Jersey
Birmingham of Singapore
* Part of the Groups interest is held through a subsidiary, USAF (Feeder) Guernsey Limited, in which there is an external investor. A non-
controlling interest therefore occurs on consolidation of the Groups results representing the external investors share of profits and assets
relating to its investment in USAF. The ordinary shareholders of Unite Group PLC are beneficially interested in 28.15% (2022: 28.15%) of USAF.
3.4a) Net assets and results of the joint ventures
The summarised balance sheets and results for the year, and the Group’s share of these joint ventures are as follows:
2023
USAF LSAV Total
£m £m £m
Gross
MI
Share
Gross
Share
Gross
Share
Investment property
*
2,940.8
38.7
827.8
1,909.4
954.7
4,850.2
1,821.2
Cash
64.7
0.9
18.2
43.0
21.5
107.7
40.6
Debt
(865.0)
(11.4)
(243.5)
(674.0)
(337.0)
(1,539.0)
(591.9)
Swap assets/(liabilities)
1.4
0.4
3.6
1.8
5.0
2.2
Other current assets
12.4
0.2
3.5
(2.8)
(1.4)
9.6
2.3
Other current liabilities
(92 .1)
(1.2)
(25.8)
(56.6)
(28.4)
(148.7)
(55.4)
Net assets
2,062.2
27. 2
580.6
1,222.6
611.2
3,284.8
1,219.0
Non-controlling interest
(27.2)
(27.2)
Swap (liabilities)/assets
(1.4)
(0.4)
(3.6)
(1.7)
(5.0)
(2.1)
EPRA NTA
2,060.8
580.2
1,219.0
609.5
3,279.8
1,189.7
Profit for the year
104.9
1.2
31.2
(10.8)
(5.4)
94.1
27.0
* Investment property includes assets classified as held for sale in the IFRS balance sheet .
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
3.4 Investments in joint ventures (Group) continued
3.4a) Net assets and results of the joint ventures continued
2022
USAF LSAV Total
£m £m £m
Gross
MI
Share
Gross
Share
Gross
Share
Investment property
2,888.1
38.0
813.0
1,920.8
960.4
4,808.9
1, 811.4
Cash
126.5
1.7
35.6
131.2
65.6
257.7
102.9
Debt
(851.9)
(11.2)
(239.8)
(770.4)
(385.2)
(1,622.3)
(636.2)
Swap assets/(liabilities)
3.2
0.9
6.6
3.3
9.8
4.2
Other current assets
126.5
1.7
35.6
16.4
8.2
142.9
45.5
Other current liabilities
(245.8)
(3.4)
(69.2)
(57. 2)
(28.6)
(303.0)
(101.2)
Net assets
2,046.6
26.8
576.1
1,247.4
623.7
3,294.0
1,226.6
Non-controlling interest
(26.8)
(26.8)
Swap (liabilities)/assets
(3.2)
(0.9)
(6.6)
(3.3)
(9.8)
(4.2)
EPRA NTA
2,043.4
575.2
1,240.8
620.4
3,284.2
1,195.6
Profit for the year
124.2
1.3
26.1
106.0
53.0
230.2
80.4
Net assets and profit/(loss) for the year above include the non-controlling interest, whereas EPRA NTA excludes the non-
controlling interest.
USAF and LSAV use derivatives to hedge their borrowings. These derivatives are designated in cash flow hedge relationships
which are considered to be fully effective. The share of joint venture mark to market movements on hedging instruments is
recognised in the Group’s Other Comprehensive Income within the share of joint venture mark to market movements on hedging
instruments. The total notional value of borrowings in hedge relationships at 31 December 2023 is £415.0 million (2022: £415.0
million). See note 4.5 for further details.
3.4b) Movement in carrying value of the Group’s investments in joint ventures
The carrying value of the Group’s investment in joint ventures decreased by £7.6 million during the year ended 31 December 2023
(2022: £182.5 million increase), resulting in an overall carrying value of £1,219.0 million (2022: £1,226.6 million).
The following table shows how the decrease has arisen:
2023 2022
£m £m
Recognised in the income statement:
Operations segment result
47.4
44.5
Non-controlling interest share of Operations segment result
1.3
1.3
Management fee adjustment related to trading with joint venture
4.5
4.0
Net valuation (losses)/ gains on investment property
(21.9)
32.3
Property disposals
*
(3.5)
(0.9)
Ineffective swap
(0.4)
(0.4)
Other
(0.4)
(0.4)
27.0
80.4
Recognised in equity:
Movement in effective hedges (loss)/gain
(2 .1)
4.7
Other adjustments to the carrying value:
Profit adjustment related to trading with joint venture
(4.5)
(4.0)
Additional capital invested in USAF
140.9
USAF distributions received
(22.6)
(19.8)
LSAV distributions received
(5.4)
(19.7)
(Decrease)/increase in carrying value
(7.6)
182.5
Carrying value at 1 January
1,226.6
1,04
4.1
Carrying value at 31 December
1,219.0
1,226.6
* Property disposals includes costs to sell relating to assets held for sale of £3.7 million .
NOTES TO THE FINANCIAL STATEMENTS continued
207
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 3: Asset management continued
3.4 Investments in joint ventures (Group) continued
3.4c) Transactions with joint ventures
The Group acts as asset and property manager for the joint ventures and receives management fees in relation to these services.
In addition, the Group is entitled to performance fees from USAF and LSAV if the joint ventures outperform certain benchmarks.
The Group receives either cash or an enhanced equity interest in the joint ventures as consideration for the performance fee. The
Group has recognised the following gross fees in its results for the year.
2023 2022
£m £m
USAF
16.6
16.6
LSAV
4.8
4.8
Asset and property management fees
21.4
21.4
Total fees
21.4
21.4
On an EPRA basis, fees from joint ventures are shown net of the Group’s share of the cost to the joint ventures.
The Group’s share of the management fees to the joint ventures is £4.5 million (2022: £4.0 million), which results in management
fees from joint ventures of £16.9 million being shown in the Operating segment result in note 2.2a (2022: £17.4 million).
During 2023, the Group did not sell any properties to LSAV or USAF (2022: no properties sold to LSAV or USAF).
3.5 Investments in subsidiaries (Company)
Accounting policies
In the financial statements of the Company, investments in subsidiaries are held at fair value. Changes in fair value are
recognised in profit or loss and presented in retained earnings in equity.
Carrying value of investment in subsidiaries
The movements in the Company’s interest in unlisted subsidiaries and joint ventures during the year are as follows:
Investment in subsidiaries
2023 2022
£m £m
At 1 January
2, 397.0
2,143.5
Revaluation
53.8
253.5
At 31 December
2,450.8
2, 397.0
The carrying value of investment in subsidiaries has been calculated using the equity attributable to the owners of the Company
from the consolidated balance sheet adjusted for the fair value of fixed rate loans. This includes investment property, investment
property under development and swaps at a fair value calculated by a third-party expert. All investment properties and investment
properties under development are classified as Level 3 in the IFRS 13 fair value hierarchy are discussed on page 210. The fixed rate
loans range between Level 1 and Level 2 in the IFRS 13 fair value hierarchy are discussed further on page 210.
Significant assumptions underlying the valuation of investment in subsidiaries are valuation of investment property and
investment property under development, together with the value of borrowings and inter-company debt. A full list of the
Company’s subsidiaries and joint ventures can be found in note 9.
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Section 4: Funding
The Group finances its development and investment activities through a mixture of retained earnings,
borrowingsand equity. The Group continuously monitors its financing arrangements to manage its gearing.
Interest rate swaps are used to manage the Group’s risk to fluctuations in interest rate movements.
The following pages provide disclosures about the Group’s funding position, including borrowings, gearing and
hedging instruments; its exposure to market risks; and its capital management policies.
Accounting policies
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, less any attributable transaction costs,
and subsequently at amortised cost.
With the exception of investments in subsidiaries and derivative financial instruments, no other financial assets or liabilities
have been classified as either fair value through profit or loss or fair value through other comprehensive income.
The accounting policies applicable to specific financial assets and liabilities, and financing costs, are set out in the relevant notes.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on trade receivables.
The Accounting Policy is set out in full in note 5.2.
Derivative financial instruments
The Group enters into derivative financial instruments to manage its exposure to interest rate risk. Further details of derivative
financial instruments, including the relevant accounting policies, are disclosed in notes 4.2 and 4.5.
4.1 Borrowings
Accounting policies
Interest bearing borrowings are recognised initially at fair value, less attributable transaction costs. Subsequent to initial
recognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in the income statement over the period of the borrowings on an effective interest basis.
The table below analyses the Group’s borrowings which comprise bank and other loans by when they fall due for payment:
Group – Carrying value
Company – Carrying value
2023 2022 2023 2022
£m £m £m £m
Current
In one year or less
299.4
Non-current
In more than one year but not more than two years
298.7
In more than two years but not more than five years
320.7
228.0
45.7
228.0
In more than five years
447.6
721.1
423.0
421.6
1,067.6
1, 247.8
468.7
649.6
Unamortised fair value of debt recognised on acquisition
14.0
18.1
Total borrowings
1,081.6
1,265.9
468.7
649.6
In addition to the borrowings currently drawn as shown above, the Group has available undrawn facilities of £550.0 million
(2022: £368.0 million). A further overdraft facility of £10.0 million (2022: £10.0 million) is also available.
NOTES TO THE FINANCIAL STATEMENTS continued
209
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 4: Funding continued
4.1 Borrowings continued
The carrying value and fair value of the Group’s borrowings is analysed below:
2023
2022
Carrying Carrying
value Fair value value Fair value
Group £m £m £m £m
Level 1 IFRS fair value hierarchy
875.0
852.3
875.0
759.3
Other loans and unamortised arrangement fees
192.6
180.3
372.8
333.8
Total borrowings
1,067.6
1,032.6
1,247.8
1,0 93.1
2023
2022
Carrying Carrying
value Fair value value Fair value
Company £m £m £m £m
Level 1 IFRS fair value hierarchy
275.0
268.4
275.0
344.5
Other loans and unamortised arrangement fees
193.7
180.3
374.6
333.8
Total borrowings
468.7
448.7
649.6
678.3
The fair value of loans classified as Level 1 in the IFRS fair value hierarchy is determined using quoted prices in active markets for
identical liabilities.
The following table shows the changes in liabilities arising from financing activities:
2023
At 1 At 31
January Financing Fair value Other December
Group 2023 cash flows adjustments changes 2023
Borrowings
1,265.9
(182.5)
(4.3)
2.5
1,081.6
Lease liabilities
92.3
(8.5)
83.8
Interest rate swaps
(73.2)
17.2
(56.0)
Total liabilities from financing activities
1,285.0
(191.0)
12.9
2.5
1,109.4
Company
Borrowings
649.6
(182.5)
0.8
0.8
468.7
Interest rate swaps
(73.2)
17.2
(56.0)
Total liabilities from financing activities
576.4
(182.5)
18.0
0.8
412.7
2022
At 1 At 31
January Financing Fair value Other December
Group 2022 cash flows adjustments changes 2022
Borrowings
1,162.0
107.0
(4.3)
1.2
1,265.9
Lease liabilities
96.8
(4.8)
0.3
92.3
Interest rate swaps
(2.5)
(70.7)
(73.2)
Total liabilities from financing activities
1,256.3
102.2
(75.0)
1.5
1,285.0
Company
Borrowings
542.2
107.0
0.4
649.6
Interest rate swaps
(2.5)
(70.7)
(73.2)
Total liabilities from financing activities
539.7
107.0
(70.3)
576.4
NOTES TO THE FINANCIAL STATEMENTS continued
210
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
4.2 Interest rate swaps
The Group uses interest rate swaps to manage the Group’s exposure to interest rate fluctuations. In accordance with the Group’s
Treasury Policy, the Group does not hold or issue interest rate swaps for trading purposes and only holds swaps which are
considered to be commercially effective. The derivatives of the Company are the same as those of the Group, and the hedge
accounting disclosures in note 4.5a are also relevant for the Company.
Accounting policies
Interest rate swaps are recognised initially and subsequently at fair value, with mark to market movements recognised in the
income statement unless cash flow hedge accounting is applied.
The Group designates certain interest rate derivatives as hedging instruments. The interest rate swap is designated as the
hedging instrument in a hedge of the variability in cash flows attributable to the interest risk of borrowings. At inception the
Group documents the relationship between the hedging instrument and the hedged item, along with the risk management
objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is
effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the
hedging relationships meet all of the following hedge effectiveness requirements:
There is an economic relationship between the hedged item and the hedging instrument.
The effect of credit risk does not dominate the value changes that result from that economic relationship.
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the
Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity
of hedged item.
The effective portion of changes in fair value of the interest rate swap is recognised in Other Comprehensive Income and
presented under the heading of Hedging reserve in equity, limited to the cumulative change in fair value of the hedged
item from inception of the hedge. Any ineffective portion of changes in the fair value of the interest rate swap is recognised
immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity are
reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised
hedged item. If the Group expects that some or all of the loss accumulated in the hedging reserve will not be recovered in
the future, that amount is immediately reclassified to profit or loss.
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria. This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation
is accounted for prospectively. Any gain or loss recognised in Other Comprehensive Income and accumulated in the hedging
reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in the hedging reserve is reclassified
immediately to profit or loss.
The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the
balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties.
The following table shows the fair value of interest rate swaps which at 31 December 2023 are not designated in accounting
hedge relationships:
2023 2022
£m £m
Current
Non-current
(56.0)
(73.2)
Fair value of interest rate swaps
(56.0)
(73.2)
The fair value of interest rate swaps has been calculated by a third-party, discounting estimated future cash flows on the basis of
market expectations of future interest rates, representing Level 2 in the IFRS 13 fair value hierarchy. At 31 December 2023 the fair
value above comprises non-current assets of £56.0 million (2022: non-current assets of £73.2 million).
NOTES TO THE FINANCIAL STATEMENTS continued
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 4: Funding continued
4.3 Net financing costs/(gains)
Accounting policies
Net financing costs comprise interest payable on borrowings and interest on lease liabilities, less interest receivable on funds
invested (both calculated using the effective interest rate method) and gains and losses on hedging instruments that are
recognised in the income statement.
2023 2022
Recognised in the income statement: £m £m
Interest income
(1.3)
(0.2)
Finance income
(1.3)
(0.2)
Gross interest expense on loans
32.5
39.5
Amortisation of fair value of debt recognised on acquisition
(4.3)
(4.3)
Interest capitalised
(8.4)
(5.9)
Loan interest and similar charges
19.8
29.3
Interest on lease liabilities
7.7
8.1
Mark to market loss/(gain) on interest rate swaps
17.2
(70.7)
Finance costs/(gains)
44.7
(33.3)
Net financing costs/(gains)
43.4
(33.5)
The average cost of the Group’s wholly-owned debt at 31 December 2023 is 2.7% (2022: 3.3%). The overall average cost of debt
on an EPRA basis is 3.2% (2022: 3.4%).
4.4 Gearing
LTV is a key indicator that the Group uses to manage its indebtedness. The Group also monitors gearing, which is calculated using
EPRA net tangible assets (NTA) and adjusted net debt. Adjusted net debt excludes IFRS 16 lease liabilities, the unamortised fair
value of debt recognised on acquisition and mark to market of interest rate swaps as shown below.
The Group’s gearing ratios are calculated as follows:
2023 2022
Note £m £m
Cash and cash equivalents
5.1
37.5
38.0
Current borrowings
4.1
(299.4)
Non-current borrowings
4.1
(782.2)
(1,265.9)
Lease liabilities
4.6a
(83.8)
(92.3)
Interest rate swaps
4.3
56.0
73.2
Net debt per balance sheet
(1,071.9)
(1,247.0)
Lease liabilities
4.6a
83.8
92.3
Unamortised fair value of debt recognised on acquisition
2.3c
15.2
19.5
Adjusted net debt
(972.9)
(1,135.2)
Reported net asset value
2.3c
4,067.0
3 ,787.5
EPRA NTA
2.3c
4,014.7
3,716.7
Gearing
Basic (net debt/reported net asset value)
26%
33%
Adjusted gearing (adjusted net debt/EPRA NTA)
24%
31%
Loan to value
2.3a
28%
31%
NOTES TO THE FINANCIAL STATEMENTS continued
212
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
4.5 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risks (primarily interest rate risk), credit risk and liquidity risk.
The Group’s Treasury Policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the Group’s financial performance. Details on credit risk can be found in note 5.3.
4.5a) Interest rate risk
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates.
The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use
of interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest
rate views and defined risk appetite; ensuring the most cost-effective hedging strategies are applied.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.
The Group holds its debt finance under both floating and fixed rate arrangements. The majority of floating debt is hedged through
the use of interest rate swap agreements. The Group’s guideline has been to hedge 75%–95% of the Group’s interest rate
exposure for terms of approximately two to ten years.
At 31 December 2023, after taking account of interest rate swaps, 114% (2022: 97%) of the Group’s borrowing was held at fixed
rates, driven by lower borrowings as a result of the capital raise in July 2023. Excluding the £200 million (2022: £200 million) of
swaps the fixed investment borrowing is at an average rate of 3.1% (2022: 3.1%) for an average period of 4.4 years (2022: 5.3
years), including all debt with current swaps the average rate is 2.7% (2022: 3.3%). Unite Group PLC has £300 million forward
starting interest rate swaps at rates meaningfully below prevailing market levels with weighted average maturity of 7.7 years.
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates
upon the issuance of forecast fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value
of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date
and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.
As the critical terms of the hedge contracts and their corresponding hedged items are the same, the Group performs a qualitative
assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the corresponding
hedged items will systematically change in opposite direction in response to movements in the underlying interest rates. The main
source of hedge ineffectiveness in these hedge relationships has historically been the effect of the counterparty and the Group’s
own credit risk on the fair value of the hedge contracts, which is not reflected in the fair value of the hedged item attributable to
the change in interest rates. No other sources of ineffectiveness emerged from these hedging relationships. However, changes in
anticipated draw down of debt in 2022 as a result of planned property disposals have meant that the hedged items were no longer
expected to occur. As a result the hedge relationships were discontinued from 1 July 2021 and the interest rate swaps are no longer
designated as ‘effective’.
The fair value of these instruments is assets of £56.0 million (2022: £73.2 million) with £nil maturing in 12 months (2022: £nil).
NOTES TO THE FINANCIAL STATEMENTS continued
213
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 4: Funding continued
4.5 Financial risk factors continued
4.5a) Interest rate risk continued
The interest rate swaps settle on a monthly basis. The floating rate on the interest rate swaps is one-month SONIA
(2022: one-month SONIA). The Group will settle the difference between the fixed and floating interest rate on a net basis.
At the end of the current year and the previous year, the Group had no cash flow hedges in hedge relationships.
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and
non-derivative instruments as at 31 December 2023. For floating rate liabilities, the analysis is prepared assuming the amount of
liability outstanding at the reporting date was outstanding for the whole year. A 1% increase or decrease is used when reporting
interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible
change in interest rates.
If interest rates had been 1% higher and all other variables were held constant the Group’s profit for the year ended
31 December 2023 would decrease by £1.7 million (2022: £1.4 million). The Group’s sensitivity to interest rates has remained
reasonably consistent year-on-year.
4.5b) Credit risk on financial instruments
In order to minimise credit risk, the Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts
with entities that are rated the equivalent of investment grade and investments in these instruments, where the counterparties
have minimum A- credit rating, are considered to have low credit risk for the purpose of impairment assessment. The credit rating
information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available
financial information including CDS prices and its own trading records to rate its major customers. The Group’s exposure and
the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties in line with Board Policy.
Before accepting any new customer, the finance team uses external credit ratings to assess the potential customer’s credit quality
and defines credit limits by customer. Monitoring procedures are also in place to ensure that follow-up action is taken when ratings
deteriorate. The Group does not hold any credit enhancements to cover its credit risks associated with its financial assets.
The Group considers the following as constituting an event of default for internal credit risk management purposes as historical
experience indicates that financial assets that meet either of the following criteria are generally not recoverable;
When there is a breach of financial covenants by the debtor.
Information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors,
including the Group, in full (without taking into account collateral held by the Group).
Details of the credit quality of the Group’s financial assets as well as the Group’s maximum exposure to credit risk by credit risk
rating grades are set out in note 5.3.
NOTES TO THE FINANCIAL STATEMENTS continued
214
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
4.5 Financial risk factors continued
4.5c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk are
set out below.
For development activities, the Group has a policy of raising substantially the full amount of equity required for each
development before drawing debt against the development. The funding requirements of developments are therefore
secured at the outset of works.
The Group has the following financial instruments which impact the liquidity risk of the Group either now or in the future:
Financial assets including interest rate swaps, trade receivables, amounts due from joint ventures, other receivables and cash.
Financial liabilities including borrowings, lease liabilities, interest rates swaps, trade payables, retentions on construction
contracts for properties, other payables and accrued expenses.
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group can be required to pay.
The contractual maturity is based on the earliest date on which the Group may be required to pay.
2023
Weighted
average
effective
interest Less than 1–3 3 months 1–5 5+ Carrying
rate 1 month months – 1 year years years Total amount
% £m £m £m £m £m £m £m
Variable interest rate
7.0%
0.3
0.6
2.6
57.9
61.5
46.5
instruments
Fixed interest rate instruments
3.1%
1.1
2.2
28.8
399.4
766.2
1,197.7
1,036.9
Lease liabilities
4.2%
1.1
2.3
10.2
54.5
66.8
134.9
83.8
Trade and other payables
N/A
134.0
134.0
134.3
Total
2.5
139.1
41.6
511.8
833.0
2,361.1
1,302.2
2022
Weighted
average
effective
interest Less than 1–3 3 months 1–5 5+ Carrying
rate 1 month months – 1 year years years Total amount
% £m £m £m £m £m £m £m
Variable interest rate
5.0
1.0
1.9
8.7
258.2
269.9
228.0
instruments
Fixed interest rate instruments
3.1
1.1
2.2
28.8
399.4
766.2
1,197.7
1,037.9
Lease liabilities
4.2
0.5
0.9
4.2
28.3
58.8
92.7
92.3
Trade and other payables
N/A
118. 2
118.2
118.2
Total
2.6
123.2
41.7
685.9
825.0
1,678.5
1,476.4
The Company has £61.5 million (2022: £ 269.9 million) of variable rate borrowings with a weighted average rate of 7.0% and
£1,197.7 million of fixed rate borrowings with a weighted average rate of 3.1% (2022: 3.1%). The maturity of the Company’s
borrowings is disclosed in note 4.1.
The Group has access to financing facilities as described below, of which £560.0 million were unused at the reporting date (2022:
£378.0 million). The Group expects to meet its other obligations from operating cash flows.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 4: Funding continued
4.5 Financial risk factors continued
4.5c) Liquidity risk continued
2023 2022
£m £m
Unsecured bank overdraft facility, reviewed annually and payable at call:
– amount used
– amount unused
10.0
10.0
10.0
10.0
Unsecured committed bank loan facilities which may be extended by mutual agreement:
– amount used
50.0
232.0
– amount unused
550.0
368.0
600.0
600.0
4.5d) Covenant compliance
The Group monitors its covenant position and the forecast headroom available on a monthly basis. At 31 December 2023,
the Group was in full compliance with all of its borrowing covenants.
The Group’s unsecured borrowings carry several covenants. The covenant regime is IFRS based and gives the Group substantial
operational flexibility, allowing property acquisitions, disposals and developments to occur with relative freedom.
2023
2022
Covenant
Actual
Covenant
Actual
Gearing
<1.50
0.27
<1.50
0.34
Unencumbered assets ratio
>1.70
3.71
>1.70
3.12
Secured gearing
<0.25
0.0
<0.25
0.0
Development assets ratio
<30%
3%
<30%
4%
Joint venture ratio
<55%
23%
<55%
24%
Interest cover
>2.00
8.23
>2.00
6.71
The Group also has bonds which carry several covenants which the Group was also in full compliance with as set out below.
2023
2022
Weighted Weighted Weighted Weighted
covenant actual covenant actual
Net gearing
<60%
28%
<60%
34%
Secured gearing
<25%
0%
<25%
0%
Unsecured gearing
>1.67
3.54
>1.67
2.89
Interest cover
>1.75
4.66
>1.75
3.50
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
4.6 Leases
4.6a) Lease liabilities
Accounting policies
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use
asset (see note 3.1a) and a corresponding lease liability with respect to all lease arrangements in which it is the lessee.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the Group’s incremental borrowing rate (since the rate implicit in the leases cannot be readily
determined) of 4.17%.
The lease liability is presented as a separate line in the consolidated balance sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability whenever:
The lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using
a revised discount rate.
The lease payments change due to changes in an index, in which cases the lease liability is remeasured by discounting
the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a
floating interest rate, in which case a revised discount rate is used).
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a
revised discount rate at the effective date of the modification.
The Group did not make any such adjustments during the period presented.
Undiscounted cash flows
Carrying value
2023 2022 2023 2022
Lease liabilities £m £m £m £m
Analysed as:
Non-current
121.3
129.0
78.4
87. 5
Current
13.6
10.5
5.4
4.8
Total lease liability
134.9
139.5
83.8
92.3
Lease liability maturity analysis
Year 1
13.6
10.5
5.4
4.8
Year 2
13.5
10.9
7.4
6.7
Year 3
13.7
11.8
7.9
6.7
Year 4
13.5
12.4
8.8
7.4
Year 5
13.8
13.3
8.8
7.9
Onwards
66.8
80.6
45.5
58.8
Total
134.9
139.5
83.8
92.3
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the
Group’s treasury function.
NOTES TO THE FINANCIAL STATEMENTS continued
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Section 4: Funding continued
4.6 Leases continued
4.6b) Lease receivables
The Group accounts for its tenancy contracts offered to commercial and individual tenants as operating leases.
Operating lease contracts with universities contain RPI uplifts and market review clauses.
The lessee does not have an option to purchase the property at the expiry of the lease period.
Maturity analysis of operating lease receivables
The future minimum lease payments receivable under non-cancellable operating leases are as follows:
2023 2022
£m £m
Year 1
236.8
218.7
Year 2
129.5
112.8
Year 3
83.8
73.8
Year 4
71.9
66.8
Year 5
60.4
58.5
Onwards
273.6
311.0
Total
856.0
841.6
4.7 Capital management
The capital structure of the Group consists of shareholders’ equity and adjusted net debt, including cash held on deposit. The
Group’s equity is analysed into its various components in the Statement of Changes in Equity. The components and calculation
of adjusted net debt is set out in note 4.4. Capital is managed so as to continue as a going concern and to promote the long-term
success of the business and to maintain sustainable returns for shareholders and joint venture partners.
The Group uses a number of key metrics to manage its capital structure:
Net debt (note 4.4)
Gearing (note 4.4)
LTV (note 2.3a)
Weighted average cost of investment debt (note 4.5a)
In order to manage levels of adjusted gearing over the medium term, the Group seeks to deliver NAV growth and to recycle
capital invested in lower performing assets to fund new investment. No property assets were sold in 2023. We plan to complete
the sale of a £197 million portfolio of assets (£79 million Unite share) in the first half of 2024. The Group only commits to development
schemes where there is a meaningful spread between development yields and funding costs. The Group does not commit to
developing new sites until sufficient equity and funding to fulfil the full cost of the development is secured.
The Board monitors the ability of the Group to pay dividends out of available cash and distributable profits. Based on the assumption
that no shareholders take up the final scrip dividend, the full year will be covered by operating cash flows. The full year dividend
is expected to be £146.8 million compared to operating cash flow of £153.2 million.
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
4.8 Equity
Accounting policies
Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares, other than on a
business combination, are shown as a deduction, net of tax, in equity from the proceeds. Share issue costs incurred directly
in connection with a business combination are deducted from the proceeds of the issue.
The Company’s issued share capital has increased during the year as follows:
2023
2022
Ordinary Share Ordinary Share
Called up, allotted and fully paid No. of shares premium No. of shares premium
ordinary shares of £0.25p each shares £m £m shares £m £m
At 1 January
400,317,225
100.1
2 ,162.0
399,139,636
99.8
2,161.2
Shares issued (capital raise)
33,149,172
8.6
286.3
Shares issued (scrip dividend)
2,232,001
0.6
(0.6)
865,069
0.2
(0.2)
Shares issued (options exercised)
156,14
4
0.1
(0.1)
312,520
0.1
1.0
At 31 December
435,854,542
109.4
2 ,447.6
400,317,225
100.1
2,162.0
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
The Company’s reserves are as follows:
Called up share capital reserves contain the nominal value of the shares issued.
Share premium reserves contain the excess consideration received above the nominal value of the shares issued.
Merger reserves contain the excess in the value of shares issued by the Company in exchange for the value of shares acquired
in respect of subsidiaries acquired (specifically on the acquisition of the Unilodge portfolio in June 2001).
Hedging reserves contain the cumulative gains and losses on hedging instruments deemed effective.
Retained earnings contain the cumulative profits and losses of the Company net of dividends paid and other adjustments.
4.9 Dividends
Accounting policies
Dividends are recognised through equity on the earlier of their approval by the Company’s shareholders or their payment.
During the year, the Company paid the final 2022 dividend of £65.9 million – 21.7p per share – and an interim 2023 dividend of
£51.4 million – 11.8p per share (2022: final 2021 dividend 15.6p and an interim dividend 11.0p).
After the year-end, the Directors proposed a final dividend per share of 23.6p (2022: 21.7p), bringing the total dividend per share
for the year to 35.4p (2022: 32.7p). No provision has been made in relation to this dividend.
The Group has modelled tax adjusted property business profits for 2023 and 2024 and the PID requirement in respect of the year
ended 31 December 2023 is expected to be satisfied by the end of 2024.
NOTES TO THE FINANCIAL STATEMENTS continued
219
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 5: Working capital
This section focuses on how the Group generates its operating cash flows. Careful management of working capital is
vital to ensure that the Group can meet its trading and financing obligations within its ordinary operating cycle.
On the following pages you will find disclosures around the Group’s cash position and how cash is generated from
the Group’s trading activities, and disclosures around trade receivables and payables.
Accounting policies
Cash and cash equivalents comprise cash balances and call deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the purpose of the statement of cash flows.
5.1 Cash and cash equivalents
The Group’s cash position at 31 December 2023 was £37.5 million (2022: £38.0 million).
The Group’s cash balances include £1.1 million (2022: £1.1 million) whose use at the balance sheet date is restricted by funding
agreements to pay operating costs.
The Group generates cash from its operating activities as follows:
Group
2023 2022
Note £m £m
Profit for the year
103.6
351.8
Adjustments for:
Depreciation and amortisation
6.3
7.8
Fair value of share-based payments
6.1
3.4
1.6
Change in value of investment property (owned and underdevelopment)
3.1
37.2
(112.7 )
Change in value of investment property (leased)
3.1
10.4
9.3
Net finance costs
4.3
18.5
29.1
Interest payments for leased assets
4.3
7.7
8.1
Mark to market changes in interest rate swaps
4.3
17.2
(70.7)
(Gain)/loss on disposal of investment property (owned)
(11.8)
15.6
Share of joint venture profit
3.4b
(27.0)
(80.4)
Trading with joint venture adjustment
4.5
4.0
Tax (credit)/charge
2.5a
(1.1)
1.6
Cash flows from operating activities before changes in working capital
168.9
163.6
(Increase)/decrease in trade and other receivables
(24.8)
3.6
Increase in inventories
(13.5)
(1.0)
Increase/(decrease) in trade and other payables
24.4
(10.7)
Cash flows from operating activities
155.0
155.5
Tax paid
(1.8)
(1.4)
Net cash flows from operating activities
153.2
15 4.1
Cash flows consist of the following segmental cash inflows/(outflows): Operations £178.0 million (2022: £134.1 million), Property
(£354.0 million) (2022: £29.6 million) and Unallocated £175.5 million (2022: £235.1 million).
The Unallocated amount includes a net cash outflow of dividends paid of £117.3 million (2022: £96.4 million) and a cash inflow of
£295.0 million (net of fees) as a result of the capital raise in July 2023.
Dividends received by the Company from its subsidiary undertakings totalling £80.0 million (2022: £130.0 million) are
non-cash distributions of reserves.
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
5.2 Trade and other receivables
Accounting policies
On the basis that trade receivables meet the business model and cash flow characteristics tests, they are initially recognised at
transaction price and then subsequently measured at amortised cost.
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these
items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared
credit risk characteristics. They have been grouped based on the days past due and also according to whether the tenant is a
commercial organisation (including universities) or an individual student.
The expected loss rates are based on the payment profile for sales by academic year as well as the corresponding historical
credit losses during the period. The historical rates are adjusted to reflect any current and forward-looking macroeconomic
factors affecting the customer’s ability to settle the amount outstanding, however given the short period exposed to credit
risk, the impact of macroeconomic factors has not been considered significant within the reporting period.
Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to make
payments within a reasonable period from the invoice date and failure to engage with the Group on alternative payment
arrangements, amongst others, are considered indicators of no reasonable expectation of recovery.
Other financial asset balances are assessed for expected credit losses based on the underlying nature of the asset, including
maturity and age of the asset such as whether a longer-term asset or a short-term working capital balance is subject to regular
settlement arrangements, using the 12-month ECL model. No credit losses have been recognised in respect of these balances.
Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into
account legal advice where appropriate. Any recoveries made are recognised in profit or loss.
The Company’s impairment policies in relation to financial assets are consistent with those of the Group, with additional
consideration given to loans to Group undertakings. In this respect, the Company recognises lifetime ECL when there has been
a significant increase in credit risk (such as changes to credit ratings) since initial recognition. However, if the credit risk on the
loans have not increased significantly since initial recognition, the Company measures the loss allowance for that financial
instrument at an amount equal to 12-month ECL.
The Company expects that the loans to Group undertakings will be repaid in full at maturity or when called. If the Group
undertakings were unable to repay loan balances, the Company expects that in such circumstances the counterparty would
negotiate extended credit terms with the Company. As such, the expected credit loss is considered immaterial. No change
in credit risk is deemed to have occurred since initial recognition and therefore a 12-month expected credit loss has been
calculated based on the assessed probability of default.
Trade and other receivables can be analysed as follows:
Group
Company
2023 2022 2023 2022
Note £m £m £m £m
Trade receivables
34.8
31.8
Amounts due from joint ventures
49.4
46.9
Prepayments and accrued income
14.8
20.6
Other receivables
33.8
5.9
0.1
Trade and other receivables (current)
132.8
105.2
0.1
Loans to Group undertakings (non-current)
5.6
2,130.0
2,076.9
Trade and other receivables (non-current)
2,130.0
2,076.9
The Group offers tenancy contracts to commercial (universities and retail unit tenants) and individual tenants based on the
academic year. The Group monitors and manages the recoverability of its receivables based on the academic year to which
the amounts relate. Rental income is payable immediately, therefore all receivables relating to tenants are past the payment
due date.
NOTES TO THE FINANCIAL STATEMENTS continued
221
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Section 5: Working capital continued
5.2 Trade and other receivables continued
We do not anticipate there to be any expected credit loss on amounts receivable from joint ventures as these remain highly
profitable. Details of amounts due from Group undertakings to the Company are disclosed in note 5.6.
2023
Ageing by academic year
Total 2023/24 2022/23 Prior years
£m £m £m £m
Rental debtors
Commercial tenants (past due)
1.8
0.6
0.5
0.7
Individual tenants (past due)
51.4
39.5
3.7
8.2
Expected credit loss carried
(18.4)
(5.3)
(4.2)
(8.9)
Trade receivables
34.8
34.8
2022 Ageing by academic year
Total 2022/23 2021/22 Prior years
£m £m £m £m
Rental debtors
Commercial tenants (past due)
1.5
0.8
0.4
0.3
Individual tenants (past due)
45.9
33.9
2.8
9.2
Expected credit loss carried
(15.6)
(2.9)
(3.2)
(9.5)
Trade receivables
31.8
31.8
Movements in the Group’s expected credit losses of trade receivables can be shown as follows:
2023 2022
£m £m
At 1 January
15.6
14.9
Expected credit loss charged to the income statement in the year
3.0
1.7
Receivables written off during the year (utilisation of expected credit loss)
(0.2)
(1.0)
At 31 December
18.4
15.6
The loss allowance for trade receivables is estimated as an amount equal to the lifetime expected credit loss (ECL). This loss has
been estimated using the Group’s history of loss for similar assets and takes into account current and forecast conditions.
The impact of credit losses is not considered significant in respect of the financial statements.
5.3 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. It arises principally from the Group’s cash balances, the Group’s receivables from customers and joint
ventures and loans provided to the Group’s joint ventures.
At the year-end, the Group’s maximum exposure to credit risk was as follows:
2023 2022
Note £m £m
Cash
5.1
37.5
38.0
Trade receivables
5.2
34.8
31.8
Amounts due from joint ventures
5.2
49.4
46.9
121.7
116.7
NOTES TO THE FINANCIAL STATEMENTS continued
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
5.3a) Cash
The Group operates investment guidelines with respect to surplus cash. Counterparty limits for cash deposits are largely based
upon long-term ratings published by credit rating agencies and credit default swap rates. Deposits are placed with financial
institutions with A- or better credit ratings.
5.3b) Trade receivables
The Group’s customers can be split into two groups – (i) students (individuals) and (ii) commercial organisations including
universities. The Group’s exposure to credit risk is influenced by the characteristics of each customer.
5.3c) Joint ventures
Amounts receivable from joint ventures fall into two categories – working capital balances and investment loans. The Group has
strong working relationships with its joint venture partners, and the joint ventures themselves have strong financial performance,
retain net asset positions and are cash generative, and therefore the Group views this as a low credit risk balance. No impairment
has therefore been recognised in 2023 or 2022.
5.4 Trade and other payables
Accounting policies
Trade payables are initially recognised at the value of the invoice received from a supplier (fair value) and subsequently at
amortised cost. The carrying value of trade payables is considered approximate to fair value.
Group amounts are payable on demand.
Trade and other payables due within one year can be analysed as follows:
Group
Company
2023 2022 2023 2022
£m £m £m £m
Trade payables
42.3
33.2
Retentions on construction contracts for properties
6.3
5.4
Amounts due to Group undertakings
66.7
70.3
Other payables and accrued expenses
85.4
84.9
9.1
9.5
Deferred income
73.8
68.0
Trade and other payables
207.8
191.5
75.8
79.8
Deferred income relates to rental income that has been collected in advance of it being recognised as income.
Included within accrued expenses is £nil of capital commitments, relating to investment properties under development
(2022: £nil).
5.5 Provisions
Accounting policies
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group
will be required to settle that obligation, and a reliable estimate can be made of the amount of that obligation. Provisions are
measured at the Directors’ best estimate of the expenditure required to settle the obligation and are discounted to present
value where the effect is material.
During 2020, and in accordance with the Government’s Building Safety Advice of 20 January 2020, the Group undertook a thorough
review of the use of High-Pressure Laminate (‘HPL’) cladding on its properties. This identified 27 properties with HPL cladding that
needed replacing across the estate, due to legal or contractual obligations.
The Group continue to carry out replacement works for properties with HPL cladding and those where there is a legal obligation to do
so, with activity prioritised according to risk assessments, starting with those over 18 metres in height. The remaining cost of the works
is expected to be £42.3 million (Unite Group Share: £22.3 million), of which £5.2 million is in respect of wholly-owned properties. Whilst
the overall timetable for these works is uncertain, management anticipate this will be incurred over the next 12–24 months.
NOTES TO THE FINANCIAL STATEMENTS continued
2 23
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 5: Working capital continued
5.5 Provisions continued
The Government’s Building Safety Bill, covering building standards, was passed in April 2022 and has introduced more stringent fire
safety regulations. The Group will ensure it remains aligned to fire safety regulations as they evolve and continue to make any required
investment to ensure its buildings remain safe to occupy. The Group has provided for the costs of remedial work where there is a legal
obligation to do so.
The amounts provided reflect the current best estimate of the extent and future cost of the remedial works required and are
based on known costs and quotations where possible, and reflect the most likely outcome. However, these estimates may be
updated as work progresses or if Government legislation and regulation changes.
The regulations continue to evolve in this area and Unite will ensure that its buildings are safe for occupation and compliant with
laws and regulations.
The Group has transferred the 2023 addition in respect of committed spend on fire safety and façade works taking place in 2024/
2025 to property valuations, which is presented as a deduction to fair value, see note 3.
The Group has not recognised any assets in respect of future claims, but expect to recover 50–75% of remediation costs through
claims from contractors.
Management has performed a sensitivity analysis to assess the impact of a change in their estimate of total costs. A 20% increase
in the estimated remaining costs would affect net valuation gains/losses on property in the IFRS P&L and would reduce the
Group’s NTA by 1.0 pence on a Unite Group share basis. Whilst provisions are expected to be utilised within the next year, there is
uncertainty over this timing.
The Group has recognised provisions for the cost of these cladding works as follows:
Gross Unite Group Share
£m £m
Wholly- Wholly-
owned
USAF
LSAV
Total
owned
USAF
LSAV
Total
At 31 December 2021
33.5
56.3
2.2
92.0
33.5
12.3
1.1
46.9
Additions
1.9
40.1
29.8
71.8
1.9
11.4
14.9
28.2
Utilisation
(5.9)
(40.8)
(3.8)
(50.5)
(5.9)
(11.5)
(1.9)
(19.4)
Changes to ownership %
3.5
3.5
At 31 December 2022
29.5
55.6
28.2
113.3
29.5
15.6
14.1
59.2
Releases
(3.6)
(3.3)
(6.9)
(3.6)
(0.9)
(4.5)
Additions
21.3
51.5
22.2
95.0
21.3
14.5
11.1
46.9
Utilisation
(21.8)
(49.7)
(6.9)
(78.4)
(21.8)
(14.0)
(3.5)
(39.3)
Transferred to valuations
(20.2)
(48.2)
(12.3)
(80.7)
(20.2)
(13.6)
(6.2)
(40.0)
At 31 December 2023
5.2
5.9
31.2
42.3
5.2
1.6
15.5
22.3
5.6 Transactions with other Group companies
During the year, the Company entered into various interest-free, repayable on demand loans with its subsidiaries, the aggregate
of which are disclosed in the cash flow statement. In addition, the Company was charged by Unite Integrated Solutions plc for
corporate costs of £4.8 million (2022: £4.5 million). As a result of these intercompany transactions, the following amounts were
due from/to the Company’s subsidiaries at the year-end.
2023 2022
£m £m
Unite Holdings Limited
126.6
131.1
LDC (Holdings) Limited
1,112.0
1,072.3
Liberty Living Group plc
891.4
873.5
Amounts due from Group undertakings
2,130.0
2,076.9
Unite Integrated Solutions plc
62.0
70.3
Amounts due to Group undertakings
62.0
70.3
The Company has had a number of transactions with its joint ventures, which are disclosed in note 3.4c.
NOTES TO THE FINANCIAL STATEMENTS continued
224
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THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Section 6: Key management and employee benefits
The Group’s greatest resource is its staff and it works hard to develop and retain its people. The remuneration
policies in place are aimed to help recognise the contribution that Unite Group’s people make to the performance
ofthe Group.
On the following pages you will find disclosures around wages and salaries and share option schemes which allow
employees of the Group to take an equity interest in the Group.
Accounting policies
The Group operates a defined contribution pension scheme. Obligations for contributions to defined contribution pension
plans are recognised as an expense in the income statement as incurred.
6.1 Staff numbers and costs
The average number of persons employed by the Group (including Directors) and the Company during the year (calculated on
a monthly basis), analysed by category, was as follows:
Number of employees
2023
2022
Managerial and administrative
580
569
Site operatives
1,241
1,206
1,821
1,775
The aggregate payroll costs of these persons were as follows:
2023 2022
£m £m
Wages and salaries
72.1
64.2
Social security costs
6.8
6.5
Pension costs
3.3
2.7
Fair value of share-based payments
3.4
1.6
85.6
75.0
The wages and salaries costs include redundancy costs of £0.2 million (2022: £0.8 million) and costs due to senior leadership
changes of £2.9 million (2022: £nil).
The total number of persons employed by the Group (including Directors) and Company as at 31 December 2023 was 528
managerial and administrative and 1,273 site operatives.
6.2 Key management personnel
The remuneration of the Directors, including Non-Executive Directors, who are the key management personnel of the Group and
Company, is set out below in aggregate for each of the applicable categories specified in IAS 24 Related Party Disclosures. Further
information about the remuneration of individual Directors is provided in the audited part of the Directors’ Remuneration Report
on pages 146–162 which covers the requirements of schedule 5 of the relevant legislation.
2023 2022
£m £m
Short-term employee benefits
2.4
2.0
Post-employment benefits
0.1
0.1
Share-based payment benefits
1.2
3.7
2.1
NOTES TO THE FINANCIAL STATEMENTS continued
225
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 6: Key management and employee benefits continued
6.3 Share-based compensation
A transaction is classified as a share-based transaction where the Group receives services from employees and pays for these in
shares or similar equity instruments. The Group operates a number of share-based compensation schemes allowing employees
to acquire shares in the Company.
6.3a) Share schemes
The Group operates the following schemes:
Long-Term Incentive Plan (LTIP), comprising the:
Performance Share Plan (PSP); and
HMRC Approved Employee Share Option Scheme (ESOS)
Details can be found in the Directors’ Remuneration Report
Save As You Earn Scheme (SAYE) Open to employees, vesting periods of three years,
service condition
6.3b) Outstanding share options
The table below summarises the movements in the number of share options outstanding for the Group and their average
exercise price:
Weighted Weighted
average Number average Number
exercise of options exercise of options
price (thousands) price (thousands)
2023 2023 2022 2022
Outstanding at 1 January
£0.19
2,083
£0.57
2,372
Forfeited during the year
£2.01
(765)
£3.09
(538)
Exercised during the year
£4.91
(176)
£2.52
(428)
Granted during the year
£2.95
800
£2.65
677
Outstanding at 31 December
£0.18
1,942
£0.19
2,083
Exercisable at 31 December
£5.80
78
£8.42
63
For those options exercised in the year, the average share price during 2023 was £9.40 (2022: £10.34).
For those options still outstanding, the range of exercise prices at the year-end was 0p to 1,121p (2022: 0p to 1,121p) and the
weighted average remaining contractual life of these options was 2.9 years (2022: 3.8 years).
The Group funds the purchase of its own shares by the Employee Share Ownership Trust to meet the obligations of the LTIP
and executive bonus scheme. The purchases are shown as Own shares acquired in retained earnings.
As at 31 December 2023 the number of shares held by the ESOT was 209,954 (2022: 205,084).
The accounting is in accordance with the relevant standards. No further information is given as the amounts for
share-based payments are immaterial.
Section 7: Post balance sheet events
On 19 February 2024 Unite Students announced that it had entered into a joint venture (‘JV’) framework agreement with Newcastle
University for the development of 2,000 new student beds, subject to planning approval. Unite will act as development and asset
manager to the JV with 51% ownership share. Total development costs are expected to be c.£250 million (Unite share: £128 million).
On 20 February 2024 Unite increased its debt capacity by an additional £150 million revolving credit facility and a further
£150 million term loan. Both are on similar terms to the existing revolving credit facility and mature in 2027. The new facilities
provide liquidity to satisfy the redemption of the £300 million Liberty Living bond, which matures in November 2024 and
increases investment capacity.
NOTES TO THE FINANCIAL STATEMENTS continued
226
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Section 8: Alternative performance measures
The Group uses alternative performance measures (APMs), which are not defined or specified under IFRS. These APMs, which
are not considered to be a substitute for IFRS measures, provide additional helpful information. APMs are consistent with how
business performance is planned, reported and assessed internally by management and the Board. The APMs below have been
calculated on a see through/Unite Group share basis, as referenced to the notes to the financial statements. Reconciliations to
equivalent IFRS measures are included in notes 2.2b and 2.2c. Definitions can also be found in the glossary.
Adjusted earnings of the Group excludes the non-recurring impact of one-off transactions, improving comparability between
reporting periods.
Non-EPRA measures may not have comparable calculation bases between companies and therefore may not provide meaningful
industry-wide comparability.
2023 2022
Note £m £m
EBIT
Net operating income
2.2a
256.5
241.0
Management fees
2.2a
16.9
17.4
Overheads
2.2a
(22.1)
(27.7)
251.3
230.7
EBIT margin %
Rental income
2.2a
369.5
339.7
EBIT
8
251.3
230.7
68.0%
67.9%
EBITDA
Net operating income
2.2a
256.5
241.0
Management fees
2.2a
16.9
17.4
Overheads
2.2a
(22.1)
(27.7)
Depreciation and amortisation
6.3
7. 8
257.6
238.5
Net debt
Cash
2.3a
77.2
139.2
Debt
2.3a
(1,6 48.1)
(1,872.8)
(1,570.9)
(1,733.6)
EBITDA: Net debt
EBITDA
8
257.6
238.5
Net debt
8
(1,570.9)
(1,733.6)
Ratio
6.1
7.5
Interest cover (Unite Group share)
EBIT
8
251.3
230.7
Net financing costs
2.2a
(47.4)
(54.9)
Interest on lease liabilities
2.2a
(7.7)
(8.1)
Total interest
(55.1)
(63.0)
Ratio
4.6
3.7
NOTES TO THE FINANCIAL STATEMENTS continued
227
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 8: Alternative performance measures continued
Reconciliation: IFRS profit before tax to EPRA earnings and adjusted earnings
2023 2022
Note £m £m
IFRS profit before tax
102.5
351.8
Net valuation (gains)/losses on investment property (owned)
2.2b
59.1
(145.0)
Property disposals (owned)
2.2b
(8.3)
16.5
Net valuation losses on investment property (leased)
2.2b
10.4
9.3
Amortisation of fair value of debt recognised on acquisition
2.2b
(4.3)
(4.3)
Changes in valuation of interest rate swaps
2.2b
17.2
(70.7)
Non-controlling interest, tax and other items
(0.4)
(1.9)
EPRA earnings
176.1
155.8
Software as a service costs
8.2
6.1
Abortive costs
1.5
Adjusted earnings
184.3
163.4
Adjusted EPS yield
2023
2022
Adjusted earnings (A)
44.3
40.9p
EPRA NTA at 1 January (B)
927p
882p
Adjusted EPS yield (A/B)
4.8%
4.6%
Total accounting return
Note
2023
2022
Opening EPRA NTA (A)
2.3d
927p
882p
Closing EPRA NTA
2.3d
920p
927p
Movement
(7p)
45p
H1 dividend paid
4.9
21.7p
15.6p
H2 dividend paid
4.9
11.8p
11.0p
Total movement in NTA (B)
25.9p
71.6p
Total accounting return (B/A)
2.9%
8.1%
EPRA performance measures
Summary of EPRA performance measures
2023 2022
2023
2022
Note £m £m
EPRA earnings
176.1
155.8
42.4p
39.4p
Adjusted earnings
*
184.3
163.4
44.3p
40.9p
EPRA NTA (diluted)
4,014.7
3,716.7
920p
927p
EPRA NRV (diluted)
4,330.7
4,029.6
992p
1005p
EPRA NDV (diluted)
4,116.0
3,960.3
943p
988p
EPRA net initial yield
4.8%
4.6%
EPRA topped up net initial yield
4.8%
4.6%
EPRA like-for-like gross rental income
2.6%
23.0%
EPRA vacancy rate
0.3%
0.8%
EPRA cost ratio (including vacancy costs)
35.2%
33.4%
EPRA cost ratio (excluding vacancy costs)
34.9%
32.3%
* Adjusted earnings calculated as EPRA earnings less software as a service costs (in 2023 and 2022) and abortive costs (in 2022 only).
NOTES TO THE FINANCIAL STATEMENTS continued
228
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
EPRA performance measures continued
EPRA like-for-like rental income (calculated based on total portfolio value of £8.7 billion)
Like-for-like Development Other Total EPRA
£m properties property properties* Earnings
2023
Rental income
319.0
18.7
31.8
369.5
Property operating expenses
(100.0)
(3.9)
(9.1)
(113.0)
Net rental income
219.0
14.8
22.7
256.5
2022
Rental income
298.2
5.2
36.3
339.7
Property operating expenses
(86.3)
(1.0)
(11.4)
(98.7)
Net rental income
211.9
4.2
24.9
241.0
Like-for-like net rental income (£m)
7.1
Like-for-like net rental income (%)
3.4%
Like-for-like gross rental income (£m)
20.8
Like-for-like gross rental income (%)
7.0%
* Other properties includes acquisitions, disposals, major refurbishments and changes in ownership.
EPRA vacancy rate
2023 2022
£m £m
Estimated rental value of vacant space
0.9
2.0
Estimated rental value of the whole portfolio
283.9
262.9
EPRA vacancy rate
0.3%
0.8%
EPRA net initial yield
2023
2022
Annualised net operating income (£m)
278.3
256.9
Property market value (£m)
5,510.4
5,325.6
Notional acquisition costs (£m)
288.6
285.7
5,799.0
5,611. 3
EPRA net initial yield (%)
*
4.8%
4.6%
Difference in projected versus historical GOI
0.2%
0.1%
Unite Group net initial yield (%)
5.0%
4.7%
* No lease incentives are provided by the Group and accordingly the Topped Up Net Initial Yield measure is also 4.8% (2022: 4.6%).
NOTES TO THE FINANCIAL STATEMENTS continued
229
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FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 8: Alternative performance measures continued
EPRA Performance Measures continued
EPRA cost ratio
2023 2022
£m £m
Property operating expenses
79.8
72.0
Overheads
*
21.2
26.4
Development/pre-contract costs
2.7
1.2
Unallocated expenses
*
8.8
2.8
112.5
102.4
Share of JV property operating expenses
33.2
26.7
Share of JV overheads
0.9
1.3
Share of JV unallocated expenses
0.4
0.3
147.0
130.7
Less: Joint venture management fees
(16.9)
(17.4)
Total costs (A)
130.1
113.3
Group vacant property costs
(0.8)
(2.5)
Share of JV vacant property costs
(0.3)
(0.9)
Total costs excluding vacant property costs (B)
129.0
109.9
Rental income
259.2
241.7
Share of JV rental income
110.3
98.0
Total gross rental income (C)
369.5
339.7
Total EPRA cost ratio (including vacant property costs) (A)/(C)
35.2%
33.4%
Total EPRA cost ratio (excluding vacant property costs) (B)/(C)
34.9%
32.4%
**
**
* Excludes software as a service cost net of deferred tax (in 2023 and 2022) and abortive costs (in 2022 only).
** Vacant property costs reflect the per bed share of operating expenses allocated to vacant beds.
Unite Group’s EBIT margin excludes non-operational expenses which are included within the EPRA cost ratio above.
Unite Group capitalises costs in relation to staff costs and professional fees associated with property development activity.
EPRA valuation movement (Unite Group share)
NOTES TO THE FINANCIAL STATEMENTS continued
Valuation Change
£m
£m
%
Wholly-owned
3,639.1
15.8
0.4%
USAF
827.8
14.9
1.8%
LSAV
954.7
(5.7)
(0.6%)
Rental properties
5,421.6
25.0
0.5%
Leased properties
84.7
Development completions for AY23/24
88.7
Properties under development
174.7
Properties held throughout the year
5,769.7
Acquisitions
Total property portfolio
5,769.7
230
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
EPRA performance measures continued
EPRA yield movement
NOI yield
Yield movement (bps)
%
H1
H2
FY
Wholly-owned
5.1
14
17
31
USAF
5.3
10
11
21
LSAV
4.5
14
25
39
Rental properties (Unite Group share)
5.0
13
18
31
Property-related capital expenditure
2023
2022
Wholly- Share of Group Wholly- Share of Group
owned JVs share owned JVs share
London
4.3
20.5
24.8
3.3
10.5
13.8
Prime regional
19.3
4.8
24.1
31.6
7.3
38.9
Major regional
24.6
3.0
27.6
16.5
11.2
27.7
Provincial
5.2
1.3
6.5
8.1
1.0
9.1
Total rental properties
53.4
29.6
83.0
59.5
30.0
89.5
Increase in beds
2.1
2.0
4.1
Acquisitions
2 .1
2 .1
1.3
1.3
Developments
58.8
58.8
193.0
193.0
Capitalised interest
8.4
8.4
6.3
6.3
Total property-related capex
122.7
29.6
152.3
262.2
32.0
294.2
EPRA loan to value
2023 2022
£m £m
Investment property (owned)
5,510.4
5,396.8
Investment property (under development)
174.7
202.7
Intangibles
9.3
18.3
Total property value and other eligible assets
5,694.4
5,617.8
Cash at bank and in hand
77.2
139.2
Borrowings
(1,64
8.1)
(1,872.8)
Net other payables
(100.3)
(150.6)
EPRA net debt
(1,671.2)
(1,884.2)
EPRA loan to value
29.3%
33.5%
NOTES TO THE FINANCIAL STATEMENTS continued
231
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Section 9: Company subsidiaries and joint ventures
In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries and equity accounted investments as at
31 December 2023 is disclosed below. Unless otherwise stated, the Group’s ownership interest represents 100% of the ordinary
shares, units or partnership capital held indirectly by Unite Group PLC. No subsidiary undertakings have been excluded from the
consolidation. The Unite Foundation has a year-end of 30 September to facilitate academic year reporting. All other subsidiaries
have a year-end of 31 December.
Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL
Filbert Village GP Limited (06016554)
(20.2%)
LDC (Gt Suffolk St) GP1 Limited (07274156)
Filbert Village Student Accommodation Limited Partnership (28.1%)
LDC (Gt Suffolk St) GP2 Limited (07274000)
LDC (180 Stratford) Limited (14254727) LDC (Gt Suffolk St) Holdings Limited (07353946)
LDC (AIB Warehouse) Limited (04872419) LDC (Gt Suffolk St) Limited Partnership
LDC (Alscot Road) Limited (06176428) LDC (Gt Suffolk St) Management GP1 Limited (07354719)
LDC (Brunel House) Limited (09760628) LDC (Gt Suffolk St) Management GP2 Limited (07354728)
LDC (Camden Court Leasehold) Limited (05140620) LDC (Gt Suffolk St) Management Limited Partnership
LDC (Camden Court) Limited (05082671) LDC (Hampton Street) Limited (06415998)
LDC (Capital Cities Nominee No.1) Limited (05347228) (50.%) LDC (Hillhead) Limited (06176554)
LDC (Capital Cities Nominee No.2) Limited (05359457) (50.%)
LDC (Holdings) Limited (02625007)
*
LDC (Capital Cities Nominee No.3) Limited (08792780) (50.%) LDC (Imperial Wharf) Limited (04541678)
LDC (Capital Cities Nominee No.4) Limited (08792688) (50.%) LDC (International House) Limited (10131352)
LDC (Capital Cities) Limited (05347220) (50.%) LDC (Kelham Island) Limited (05152229)
LDC (Causewayend) Limited (08895966) LDC (Leasehold A) Limited (04066933)
LDC (Chantry Court Leasehold) Limited (05140258) LDC (Leasehold B) Limited (05978242)
LDC (Chaucer House) Limited (09898020) LDC (Loughborough) Limited (04207522)
LDC (Constitution Street) Limited (09210998) LDC (Magnet Court Leasehold) Limited (05140255)
LDC (Construction Two) Limited (04847268) LDC (Millennium View) Limited (09890375)
LDC (Euro Loan) Limited (06623603) LDC (MTF Portfolio) Limited (05530557)
LDC (Ferry Lane 2) GP1 Limited (07359448) (50.%) LDC (Nairn Street) GP1 Limited (07580262) (20.2%)
LDC (Ferry Lane 2) GP2 Limited (07359481) (50.%) LDC (Nairn Street) GP2 Limited (07580257) (20.2%)
LDC (Ferry Lane 2) GP3 Limited (07503842) LDC (Nairn Street) GP3 Limited (07808933)
LDC (Ferry Lane 2) GP4 Limited (07503913) LDC (Nairn Street) GP4 Limited (07808919)
LDC (Ferry Lane 2) Holdings Limited (07504099) (50.%) LDC (Nairn Street) Holdings Limited (07579402)
LDC (Ferry Lane 2) Limited Partnership (50.0%) LDC (Nairn Street) Limited Partnership (28.1%)
LDC (Ferry Lane 2) Management Limited Partnership (50.0%) LDC (Nairn Street) Management Limited Partnership (28.1%)
LDC (Finance) Limited (09760806) LDC (New Wakefield Street) Limited (10436455)
LDC (Greetham Street) Limited (08895825)
LDC (Newgate) Limited (08895869)
*
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
* Held directly by the Company.
** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s479A for
the financial year ended 31 December 2023 .
NOTES TO THE FINANCIAL STATEMENTS continued
232
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL
LDC (Old Hospital) Limited (09702143) Liberty Living (LQ Newcastle) Limited (04302869)
LDC (Oxford Road Bournemouth) Limited (04407309)
Liberty Living (LQ2 Newcastle) Limited (07298853)
**
LDC (Portfolio 100) Limited (07989369)
Liberty Living Finance PLC (10979349)
**
LDC (Portfolio 20) Limited (08803996)
Liberty Living Group Limited (BR020813)
*
/
**
LDC (Portfolio Five) Limited (06079581)
Liberty Living Investments 1 Limited Partnership
**
LDC (Portfolio Four) Limited (04985603)
Liberty Living Investments 2 Limited Partnership
**
LDC (Portfolio One) Limited (03005262)
Liberty Living Investments 3 Limited Partnership
**
LDC (Portfolio) Limited (08419375)
Liberty Living Investments GP1 Limited (09375866)
**
LDC (Project 110) Limited (05083580)
Liberty Living Investments GP2 Limited (09375868)
**
LDC (Project 111) Limited (05791650)
Liberty Living Investments GP3 Limited (10518849)
**
LDC (Radmarsh Road) Limited (05435290)
Liberty Living Investments II Holdco 2 Limited (09574059)
**
LDC (Skelhorne) Limited (09898132)
Liberty Living Investments II Holdco Limited (08929431)
**
LDC (Smithfield) Limited (03373096)
Liberty Living Investments II Limited (09680931)
**
LDC (St Leonards) Limited (08895830)
Liberty Living Investments Limited (09375870)
**
LDC (St Pancras Way) GP1 Limited (07359501)
Liberty Living Investments Nominee 1 Limited (09375846)
**
LDC (St Pancras Way) GP2 Limited (07359428)
Liberty Living Investments Nominee 2 Limited (09375849)
**
LDC (St Pancras Way) GP3 Limited (07503268)
Liberty Living Investments Nominee 3 Limited (10519085)
**
LDC (St Pancras Way) GP4 Limited (07503251)
Liberty Living Limited (04055891)
**
LDC (St Pancras Way) Holdings Limited (07360734) Liberty Living SpareCo Limited (04616115)
LDC (St Pancras Way) Limited Partnership
Liberty Living UK Limited (06064187)
**
LDC (St Pancras Way) Management Limited Partnership Liberty Park (Bedford) Limited
LDC (St Vincent's) Limited (10218310) Liberty Park (Bristol) Limited (07615601)
LDC (Stratford) GP1 Limited (07547911) (50.%)
Liberty Park (US Bristol) Limited (07615619)
**
LDC (Stratford) GP2 Limited (07547994) (50.%) Liberty Plaza (London) Limited (07745097)
LDC (Stratford) Limited Partnership (50.%) Liberty Plaza (Newcastle) Limited
LDC (Swindon NHS) Limited (04207502)
Liberty Point (Coventry) Limited (04992358)
**
LDC (Tara House) Limited (09214177) Liberty Point (Manchester) Limited (04828083)
LDC (Thurso Street) GP1 Limited (07199022)
Liberty Point Southampton (Block A) Limited (10314954)
**
LDC (Thurso Street) GP2 Limited (07198979) Liberty Prospect Point (Liverpool) Limited (04637570)
LDC (Thurso Street) GP3 Limited (07434001)
Liberty Quay (Newcastle) Limited (05234174)
**
LDC (Thurso Street) GP4 Limited (07434133) Liberty Quay 2 (Newcastle) Limited (07376627)
LDC (Thurso Street) Limited Partnership Liberty Severn Point (Cardiff) Limited (04313995)
LDC (Thurso Street) Management Limited Partnership Liberty Village (Edinburgh) Limited (10323566)
LDC (Ventura) Limited (04444628) LL Midco 2 Limited (08998308)
LDC (Vernon Square) Limited (06444132)
LSAV (Angel Lane) GP1 Limited (08593689) (50.%)
**
LDC (William Morris II) Limited (05999281)
LSAV (Angel Lane) GP2 Limited (08593692) (50.%)
**
LDC Capital Cities Two (GP) Limited (08790742) (50.%)
LSAV (Angel Lane) GP3 Limited (08646359)
Liberty Atlantic Point (Liverpool) Limited (03885187)
LSAV (Angel Lane) GP4 Limited (08646929)
**
Liberty Heights (Manchester) Limited (07399622)
LSAV (Angel Lane) Limited Partnership (50.%)
**
Liberty Living (HE) Holdings Ltd – Company Only (10977869)
LSAV (Angel Lane) Management Limited Partnership (50.%)
**
Liberty Living (LH Manchester) Limited (07120141)
LSAV (Arch View) GP1 Limited (13210709) (50.%)
**
Liberty Living (Liberty AP) Limited (03633307)
LSAV (Arch View) GP3 Limited (13210526)
**
Liberty Living (Liberty PP) Limited (03991475) LSAV (Arch View) LP (50.%)
Liberty Living (LP Bristol) Limited (07242607)
LSAV (Arch View) Management LP (50.%)
**
Liberty Living (LP Coventry) Limited (04330729) LSAV (Arch View) Nominee 1 Limited (13210518) (50.%)
Liberty Living (LP Manchester) Limited (04314013)
LSAV (Arch View) Nominee 3 Limited (13210553)
*
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
**
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* Held directly by the Company.
** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s479A for
the financial year ended 31 December 2023 .
NOTES TO THE FINANCIAL STATEMENTS continued
233
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL
LSAV (Aston Student Village) GP1 Limited (10498478) (50.%)
Unite (Capital Cities) Jersey Ltd
LSAV (Aston Student Village) GP2 Limited (10498481) (50.%)
Unite Accommodation Management 16 Limited (07061314)
LSAV (Aston Student Village) GP3 Limited (10498217) Unite Accommodation Management 18 Limited (08328484)
LSAV (Aston Student Village) GP4 Limited (10498484)
Unite Accommodation Management 19 Limited (08790504)
(50.%)
LSAV (Aston Student Village) Limited Partnership (50.%)
Unite Accommodation Management 2 Limited (05193166)
LSAV (Aston Student Village) Management Limited Partnership
Unite Accommodation Management 20 Limited (08790642)
(50.%)
(50.%)
LSAV (Drapery Plaza) GP1 Limited (13209904) (50.%) Unite Accommodation Management 6 Limited (05077346)
LSAV (Drapery Plaza) GP3 Limited (13210206) Unite Accommodation Management 9 Limited (06190863)
LSAV (Drapery Plaza) LP (50.%) Unite Accommodation Management Limited (06190905)
LSAV (Drapery Plaza) Management LP (50.%) Unite Accommodation Management One Hundred Limited (07989080)
LSAV (Drapery Plaza) Nominee 1 Limited (13209909) (50.%)
Unite Capital Cities 3 GP1 Limited (13913884)
(50.%)
LSAV (Drapery Plaza) Nominee 3 Limited (13209979) UNITE CAPITAL CITIES 3 LIMITED PARTNERSHIP (50.%)
LSAV (GP) Limited (50.%)
Unite Capital Cities 3 Management Limited (13913891)
(50.%)
LSAV (Holdings) Limited (50.%)
(50.%)
Unite Capital Cities 3 Nominee 1 Limited (13913890)
LSAV (Jersey Manager) Limited
UNITE Capital Cities Holdings Limited (08801242)
(50.%)
LSAV (No.1) GP1 Limited (13184531) (50.%) Unite Capital Cities Limited Partnership (50.%)
LSAV (No.1) GP3 Limited (13184662) Unite Capital Cities Two Limited Partnership (50.%)
LSAV (No.1) LP (50.%)
UNITE Construction (Angel Lane) Limited (08792704)
**
LSAV (No.1) Management LP (50.%) UNITE Construction (Stapleton) Limited (09023406)
LSAV (No.1) Nominee 1 Limited (13184589) (50.%) UNITE Construction (Wembley) Limited (09023474)
LSAV (No.1) Nominee 3 Limited (13184656)
Unite Finance Limited (04353305)
*
/
LSAV (Property Holdings) LP (50.%)
Unite Finance One (Accommodation Services) Limited (04332937)
LSAV (Stapleton) GP1 Limited (08593695) (50.%) Unite Finance One (Holdings) Limited (04316207)
LSAV (Stapleton) GP2 Limited (08593699) (50.%) Unite Finance One (Property) Limited (04303331)
LSAV (Stapleton) GP3 Limited (08646819) Unite FM Limited (06807562)
LSAV (Stapleton) GP4 Limited (08647019) UNITE For Success Limited (05157263)
LSAV (Stapleton) Limited Partnership (50.%)
Unite Holdings Limited (03148468)
*
/
LSAV (Stapleton) Management Limited Partnership (50.%)
UNITE Homes Limited (05140262)
**
LSAV (Stratford) GP3 Limited (08751654) Unite Integrated Solutions plc (02402714)
LSAV (Stratford) GP4 Limited (08751629) Unite Modular Solutions Limited (05140259)
LSAV (Stratford) Management Limited Partnership (50.%) Unite Rent Collection Limited (05982935)
LSAV (Trustee) Limited (50.%)
UNITE Student Living Limited (06204135)
LSAV (Wembley) GP1 Limited (08635735) (50.%) Unite Students Accommodation (Beijing) Business Service
Company Limited
**
LSAV (Wembley) GP2 Limited (08636051) (50.%)
USAF Finance II Limited (08526474)
(20.2%)
LSAV (Wembley) GP3 Limited (08725127)
USAF GP No 1 Limited (05897875)
(20.2%)
LSAV (Wembley) GP4 Limited (08725235)
USAF GP No 10 Limited (06714734)
(20.2%)
LSAV (Wembley) Limited Partnership (50.%)
USAF GP No 11 Limited (07075210)
(20.2%)
LSAV (Wembley) Management Limited Partnership (50.%) USAF GP No 11 Management Limited (07351883)
LSAV FACILITY 1 HOLDINGS LIMITED (13913388)
(50.%)
USAF GP No 12 Limited (07368735)
(20.2%)
LSAV FACILITY 1 MANAGEMENT HOLDINGS LIMITED (13913371)
USAF GP No 14 Limited (09089977)
(20.2%)
LSAV Management Holdings Limited (13305327)
USAF GP No 15 Limited (09585201)
(20.2%)
LSAV Rent Collection Limited (08496230)
USAF GP No 18 Limited (10219336)
(20.2%)
Stardesert Limited (04437102)
USAF GP No 6 Limited (05897755)
(20.2%)
The UNITE Foundation
USAF GP No 8 Limited (06381914)
(20.2%)
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**
**
* Held directly by the Company.
** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s479A for
the financial year ended 31 December 2022 .
NOTES TO THE FINANCIAL STATEMENTS continued
Section 9: Company subsidiaries and joint ventures continued
234
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL
USAF GP No.15A Limited (12644211)
(28.1%)
USAF No.12 Limited Partnership (28.1%)
USAF GP No.16A Limited (12644210)
(28.1%)
USAF No.14 Limited Partnership (28.1%)
USAF GP No.16B Limited (14707370)
(28.1%)
USAF No.15 Limited Partnership (28.1%)
USAF GP No.17A Limited (12644208)
(28.1%)
USAF No.15A Limited Partnership (28.1%)
USAF GP No.17B Limited (14707101)
(28.1%)
USAF No.16A Limited Partnership (28.1%)
USAF GP No.19 Limited (14707096)
(20.2%)
USAF No.16B Limited Partnership (28.1%)
USAF Holdings K Limited (14700139)
(20.2%)
USAF No.16B Nominee 1 Limited (14707400)
(20.2%)
USAF Holdings B Limited (06324325)
(20.2%)
USAF No.16B Nominee 2 Limited (14707390)
(20.2%)
USAF Holdings C Limited (06381882)
(20.2%)
USAF No.17A Limited Partnership (28.1%)
USAF Holdings H Limited (09089805)
(20.2%)
USAF No.17B Limited Partnership (28.1%)
USAF Holdings I Limited (09581882)
(20.2%)
USAF No.17B Nominee 1 Limited (14707108)
(20.2%)
USAF Holdings J Limited (10215997)
(20.2%)
USAF No.17B Nominee 2 Limited (14707114)
(20.2%)
USAF Holdings Limited (05870107)
(20.2%)
USAF No.18 Limited Partnership (28.1%)
USAF Jersey Investments Ltd USAF No.19 Limited Partnership (28.1%)
USAF Jersey Manager Ltd
USAF No.6 Limited Partnership (28.1%)
USAF LP Limited (05860874) USAF No.8 Limited Partnership (28.1%)
USAF Management 10 Limited (06714695)
USAF Nominee No.1 Limited (05855598)
(20.2%)
USAF Management 11 Limited (07082782)
USAF Nominee No.10 Limited (06714690)
(20.2%)
USAF Management 12 Limited (07365681)
USAF Nominee No.10A Limited (06714615)
(20.2%)
USAF Management 14 Limited (09232206)
USAF Nominee No.11 Limited (07075251)
(20.2%)
USAF Management 16 Ltd (07735741)
(28.1%)
USAF Nominee No.11A Limited (07075213)
(20.2%)
USAF Management 17 Ltd (05591986)
(28.1%)
USAF Nominee No.12 Limited (07368733)
(20.2%)
USAF Management 18 Limited (10219775)
USAF Nominee No.12A Limited (07368755)
(20.2%)
USAF Management 6 Limited (06225945)
USAF Nominee No.14 Limited (09231609)
(20.2%)
USAF Management 8 Limited (06387597)
USAF Nominee No.14A Limited (09231604)
(20.2%)
USAF Management GP No.14 Limited (09130985)
USAF Nominee No.15 Limited (12644205)
(20.2%)
USAF Management GP No.15 Limited (09749946)
USAF Nominee No.15A Limited (12644204)
(20.2%)
USAF Management GP No.16 Limited (09750068)
USAF Nominee No.16 Limited (12644201)
(20.2%)
USAF Management GP No.17 Limited (09750061)
USAF Nominee No.16A Limited (12644197)
(20.2%)
USAF Management GP No.18 Limited (12410758)
USAF Nominee No.17 Limited (12644192)
(20.2%)
USAF Management Limited (05862721)
USAF Nominee No.17A Limited (12644187)
(20.2%)
USAF Management No. 14 Limited Partnership (28.1%)
USAF Nominee No.18 Limited (10218595)
(20.2%)
USAF Management No. 15 Limited Partnership (28.1%)
USAF Nominee No.18A Limited (10219339)
(20.2%)
USAF Management No. 16 Limited Partnership (28.1%)
USAF Nominee No.19 Limited (14706129)
(20.2%)
USAF Management No. 17 Limited Partnership (28.1%)
USAF Nominee No.19A Limited (14706126)
(20.2%)
USAF Management No. 18 Limited Partnership (28.1%)
USAF Nominee No.1A Limited (05835512)
(20.2%)
USAF Management No.19 Limited (14707093)
(28.1%)
USAF Nominee No.6 Limited (05855599)
(20.2%)
USAF No.1 Limited Partnership (28.1%)
USAF Nominee No.6A Limited (05885802)
(20.2%)
USAF No.10 Limited Partnership (28.1%)
USAF Nominee No.8 Limited (06381861)
(20.2%)
USAF No.11 Limited Partnership (28.1%)
USAF Nominee No.8A Limited (06381869)
(20.2%)
USAF No.11 Management Limited Partnership (28.1%)
USAF RCC Limited (05983554)
(20.2%)
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**
* Held directly by the Company.
** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s479A for
the financial year ended 31 December 2023 .
NOTES TO THE FINANCIAL STATEMENTS continued
235
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
Registered office and principal place of business: 13 Castle Street, St Helier, Jersey, JE4 5UT
LDC (Gt Suffolk St) Unit Trust
LSAV (Aston Student Village) Unit Trust (50.0%)
LDC (St Pancras Way) Unit Trust
LSAV (Holdings) Limited (50.0%)
LDC (Thurso Street) Unit Trust
LSAV (Trustee) Limited (50.0%)
LSAV (Jersey Manager) Limited
LSAV Unit Trust (50.0%)
Unite (Capital Cities) Jersey Limited
Unite Capital Cities Unit Trust (50.0%)
USAF Jersey Investments Limited
USAF Portfolio 18 Unit Trust (28.1%)
USAF Jersey Manager Limited
LDC (Nairn Street) Unit Trust (28.1%)
LDC (Ferry Lane 2) Unit Trust (50.0%)
Unite UK Student Accommodation Fund (20.2%)
LDC (Stratford) Unit Trust (50.0%)
LSAV (Arch View) Unit Trust (50.0%)
LSAV (Drapery Plaza) Unit Trust (50.0%)
Registered office and principal place of business: Third Floor, La Plaiderie Chambers, St Peter Port, Guernsey, GY1 1WG
USAF Feeder Guernsey Limited (45.5%)
USAF Portfolio 16 Unit Trust (28.1%)
USAF Portfolio 15 Unit Trust (28.1%)
USAF Portfolio 17 Unit Trust (28.1%)
Registered office and principal place of business: Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN
LSAV (GP) Limited (SC431844) (50.0%)
LSAV (Property Holdings) Limited Partnership (50.0%)
Registered office and principal place of business: Trident Chambers, Wickhams Cay, P.O. Box 146, Road Town, Tortola,
British Virgin Islands
Liberty Park (Bedford) Limited
Liberty Plaza (Newcastle) Limited
NOTES TO THE FINANCIAL STATEMENTS continued
Section 9: Company subsidiaries and joint ventures continued
236
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OTHER INFORMATION
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
FINANCIAL RECORD (unaudited)
2023 2022 2021 2020 2019
EPRA earnings (£m) 176 157 152 97 111
EPRA earnings per share (pence) 42 39 38 26 39
Adjusted earnings (£m) 184 163 110 93 105
Adjusted earnings per share (pence) 44 41 28 24 37
IFRS profit/(loss) before tax (£m) 103 351 342 (120) (101)
IFRS profit/(loss) per share (pence) 25 88 86 (32) (32)
EPRA net tangible assets (NTA) (£m) 4,015 3,717 3,532 3,266 3,087
EPRA NTA per share (pence) 920 927 882 818 847
IFRS net assets (£m) 4,067 3,788 3,528 3,235 3,072
IFRS NAV per share (pence) 931 944 880 809 845
LTV (%) 28% 31% 29% 34% 37%
Managed portfolio value (£m) 8,663 8,522 8,108 7,838 7,702
Total accounting return (TAR) 2.9% 8.1% 10.2% (3.4%) 11.7%
237
OTHER INFORMATIONFINANCIAL STATEMENTS
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT
GLOSSARY
Adjusted earnings An alternative performance measure based on EPRA earnings, adjusted to remove the impact of abortive
acquisition costs and the LSAV performance fee which was settled in 2021. The items have beenexcluded
from adjusted earnings to improve the comparability of results year-on-year.
Adjusted earnings
pershare/EPS
The earnings per share based on adjusted earnings and weighted average number of shares
inissue(basic).
Adjusted EPS yield Adjusted EPS as a percentage of opening EPRA NTA (diluted).
Adjusted net debt Net debt per the balance sheet, adjusted to remove IFRS 16 lease liabilities and the unamortised
fairvalue of debt recognised on the acquisition of Liberty Living.
Basis points (BPS) A basis point is a term used to describe a small percentage, usually in the context of change,
andequatesto 0.01%.
Diluted earnings/EPS Where earnings values per share are used basic measures divide the earnings by the weighted average
number of issued shares in issue throughout the period, whilst the diluted measure also takes into
account the effect of share options which have been granted and which are expected to be converted
into shares in the future.
Diluted NTA/NAV Where NTA/NAV per share is used, basic measures divide the NTA/NAV by the number of shares issued
at the reporting date, whilst the diluted measure also takes into account the effect of share options
which have been granted and which are expected to be converted into shares in the future (both for
the additional number of shares that will be issued and the value of additional consideration that will
bereceived in issuing them).
Direct-let Properties where short-hold tenancy agreements are made directly between Unite Students and
thestudent.
EBITDA The Group’s adjusted EBIT, adding back depreciation and amortisation.
EPRA The European Public Real Estate Association, who produce best practice recommendations
forfinancialreporting.
EPRA cost ratio The ratio of property operating expenses, overheads and management fees, against rental income,
calculated on an EPRA basis.
EPRA earnings EPRA earnings exclude movements relating to changes in values of investment properties, profits/losses
from the disposal of properties, swap/debt break costs, interest rate swaps and the related tax effects.
EPRA earnings per
share/EPS
The earnings per share based on EPRA earnings and weighted average number of shares in issue (basic).
EPRA like-for-like
rentalgrowth
The growth in rental income measured by reference to the part of the portfolio of the Group that
has been consistently in operation, and not under development nor subject to disposal, and which
accordingly enables more meaningful comparison in underlying rental income levels.
EPRA net tangible
assets (NTA)
EPRA NTA includes all property at market value but excludes the mark to market of financial
instruments,deferred tax and intangible assets. EPRA NTA provides a consistent measure of NAV
onagoing concern basis.
EPRA net tangible assets
per share
The diluted NTA per share figure based on EPRA NTA.
EPRA net
reinstatement value(NRV)
EPRA NRV includes all property at market value but excludes the mark to market of financial instruments,
deferred tax and real estate transfer tax. EPRA NRV assumes that entities never sell assets and represents
the value required to rebuild the entity.
EPRA net disposal
value(NDV)
EPRA NDV includes all property at market value, excludes the mark to market of financial instruments but
includes the fair value of fixed interest rate debt and the carrying value of intangible assets. EPRA NDV
represents the shareholders’ value in a disposal scenario.
EPRA net initial yield (NIY) Annualised NOI generated by the Group’s rental properties expressed as a percentage of their fair value,
taking into account notional acquisition costs.
238
OTHER INFORMATIONFINANCIAL STATEMENTS
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT
GLOSSARY continued
EPRA topped up netinitial
yield (NIY)
EPRA Net Initial Yield adjusted to include the effect of the expiration of rent free periods (or other
unexpired lease incentives such as discounted rent periods or step rents).
EPRA vacancy rate The ratio of the estimated market rental value of vacant spaces against the estimated market rental value
of the entire property portfolio (including vacant spaces).
ESG Environmental, Social and Governance.
Full occupancy Full occupancy is defined as occupancy in excess of 97%.
GRESB GRESB is a benchmark of the Environmental, Social and Governance (ESG) performance of real assets.
Gross asset
value (GAV)
The fair value of rental properties, leased properties and development properties.
The Group Wholly-owned balances plus Unite Group’s interests relating to USAF and LSAV.
Group debt Wholly-owned borrowings plus Unite Group’s share of borrowings attributable to USAF and LSAV.
HMO Houses in multiple occupation, where buildings or flats are shared by multiple tenants who rent their
own rooms and the property’s communal spaces on an individual basis.
IFRS NAV per share IFRS equity attributable to the owners of the Parent Company from the consolidated balance sheet
divided by the total number of shares of the Parent Company in issue at the reporting date.
Interest cover ratio (ICR) Calculated as EBIT divided by the sum of net financing costs and IFRS 16 lease liability interest costs.
Lease Properties which are leased to universities for a number of years.
Like-for-like metrics Like-for-like is the change in metric, on a gross basis, calculated using properties owned throughout
thecurrent and previous period.
Loan to value (LTV) Net debt as a proportion of the value of the rental properties, excluding balances in respect of leased
properties under IFRS 16. Prepared on a see-through basis. In the opinion of the Directors, this measure
enables an appraisal of the indebtedness of the business, which closely aligns with key covenants in
theGroup’s agreements.
Loan to value post IFRS16 Net debt as a proportion of the value of the rental properties, including balances in respect of leased
properties under IFRS 16. Prepared on a see-through basis.
LTV (EPRA) Net debt as a proportion of the value of the rental properties including balances in respect of leased
properties and all other assets and liabilities.
LSAV The London Student Accommodation Joint Venture (LSAV) is a joint venture between Unite Group and
GIC, inwhich both hold a 50% stake. LSAV has a maturity date of September 2032.
Major regional Properties located in Aberdeen, Birmingham, Cardiff, Glasgow, Leeds, Leicester, Liverpool, Newcastle,
Nottingham, Sheffield and Southampton.
Net asset value (NAV) The total of all assets less the value of all liabilities at each reporting date.
Net debt (EPRA) Borrowings net of cash. IFRS 16 lease liabilities are excluded from net debt on an EPRA basis. In the
opinion of the Directors, net debt is a useful measure to monitor the overall cash position of the Group.
Net debt per balancesheet Borrowings, IFRS 16 lease liabilities and the mark to market of interest rate swaps, net of cash.
Net debt to EBITDA Net debt as a proportion of EBITDA.
Net financing costs (EPRA) Interest payable on borrowings less interest capitalised into developments and finance income.
239
OTHER INFORMATIONFINANCIAL STATEMENTS
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT
Net operating
income(NOI)
The Group’s rental income less property operating expenses.
NOI margin The Group’s NOI expressed as a percentage of rental income.
Nomination agreements Agreements at properties where universities have entered into a contract to reserve rooms for their
students, usually guaranteeing occupancy. The universities usually either nominate students to live inthe
building and Unite Students enters into short-hold tenancies with the students or the university enters
into a contract with Unite Students and makes payment directly to Unite Students.
Provincial Properties located in Bournemouth, Coventry, Loughborough, Medway, Portsmouth and Swindon.
Prime regional Properties located in Bath, Bristol, Durham, Edinburgh, Manchester and Oxford.
Property operating
expenses
Operating costs directly related to rental properties, therefore excluding central overheads.
Rental growth Calculated as the year-on-year change in the average annual price for sold beds. In the opinion of
theDirectors, this measure enables a more meaningful comparison in rental income as it excludes
theimpact of changes in occupancy.
Rental income Income generated by the Group from rental properties.
Rental properties Investment properties (owned and leased) whose construction has been completed and are used
bytheOperations segment to generate NOI.
Rental properties (leased)/
Sale and leaseback
Properties that have been sold to a third-party investor then leased back to the Group.
Unite Group is also responsible for the management of these assets on behalf of the owner.
Resident ambassadors Student representatives who engage with students living in the property to create a community
andsense of belonging.
SaaS Software-as-a-Service is a licensing and distribution model used to deliver cloud-based software
applications to users over the Internet.
See-through
(also Unite Group share)
Wholly-owned balances plus Unite Group’s share of balances relating to USAF and LSAV.
TCFD The Task Force on Climate-related Financial Disclosures develops voluntary, consistent climate-related
financial risk disclosures for use by companies in providing information to investors, lenders, insurers
and other stakeholders.
Total accounting
return
Growth in diluted EPRA NTA per share plus dividends paid, expressed as a percentage of diluted EPRA
NTA per share at the beginning of the period. In the opinion of the Directors, this measure enables an
appraisal of the return generated by the business for shareholders during the year.
Total shareholder return The growth in value of a shareholding over a specified period, assuming dividends are reinvested
topurchase additional shares.
USAF/the fund The Unite UK Student Accommodation Fund (USAF) is Europe’s largest fund focused purely on income-
producing student accommodation investment assets.
The fund is an open-ended infinite life vehicle with unique access to Unite Group’s development pipeline.
Unite Group acts as fund manager for the fund, as well as owning a significant minority stake.
WAULT Weighted average unexpired lease term to expiry.
Wholly-owned Balances relating to properties that are 100% owned by The Unite Group PLC or its 100% subsidiaries.
GLOSSARY continued
240
OTHER INFORMATIONFINANCIAL STATEMENTS
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
GOVERNANCESTRATEGIC REPORT
THE UNITE GROUP PLC
Executive Team
Joe Lister
Chief Executive Officer
Mike Burt
Chief Financial Officer
Registered Office
South Quay House, Temple Back, Bristol BS1 6FL
Registered Number in England
03199160
Company Secretary
Christopher Szpojnarowicz
Auditor
Deloitte LLP
1 New Street Square, London EC4A 3HQ
Financial Advisers
J.P. Morgan Cazenove
25 Bank Street, London E14 5JP
Deutsche Numis
45 Gresham Street, London EC2V 7BF
Registrars
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Financial PR Consultants
Powerscourt
1 Tudor Street, London EC4Y OAH
COMPANY INFORMATION
Find out more online at
www.unitegroup.com
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
OTHER INFORMATIONFINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
241
THE UNITE GROUP PLC Annual Report & Accounts 2023
The Unite Group PLC
South Quay House
Temple Back
Bristol BS1 6FL
+44 (0) 117 302 7000
www.unitegroup.com
www.unitestudents.com