213800BBUUWVDH9YI8272023-01-012023-12-31iso4217:GBP213800BBUUWVDH9YI8272022-01-012022-12-31iso4217:GBPxbrli:shares213800BBUUWVDH9YI8272023-12-31213800BBUUWVDH9YI8272022-12-31213800BBUUWVDH9YI8272022-12-31ifrs-full:IssuedCapitalMember213800BBUUWVDH9YI8272022-12-31ifrs-full:SharePremiumMember213800BBUUWVDH9YI8272022-12-31ifrs-full:MergerReserveMember213800BBUUWVDH9YI8272022-12-31ifrs-full:RetainedEarningsMember213800BBUUWVDH9YI8272022-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800BBUUWVDH9YI8272022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800BBUUWVDH9YI8272022-12-31ifrs-full:NoncontrollingInterestsMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:IssuedCapitalMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:SharePremiumMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:MergerReserveMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:RetainedEarningsMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800BBUUWVDH9YI8272023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember213800BBUUWVDH9YI8272023-12-31ifrs-full:IssuedCapitalMember213800BBUUWVDH9YI8272023-12-31ifrs-full:SharePremiumMember213800BBUUWVDH9YI8272023-12-31ifrs-full:MergerReserveMember213800BBUUWVDH9YI8272023-12-31ifrs-full:RetainedEarningsMember213800BBUUWVDH9YI8272023-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800BBUUWVDH9YI8272023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800BBUUWVDH9YI8272023-12-31ifrs-full:NoncontrollingInterestsMember213800BBUUWVDH9YI8272021-12-31ifrs-full:IssuedCapitalMember213800BBUUWVDH9YI8272021-12-31ifrs-full:SharePremiumMember213800BBUUWVDH9YI8272021-12-31ifrs-full:MergerReserveMember213800BBUUWVDH9YI8272021-12-31ifrs-full:RetainedEarningsMember213800BBUUWVDH9YI8272021-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800BBUUWVDH9YI8272021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800BBUUWVDH9YI8272021-12-31ifrs-full:NoncontrollingInterestsMember213800BBUUWVDH9YI8272021-12-31213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:IssuedCapitalMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:SharePremiumMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:MergerReserveMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:RetainedEarningsMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800BBUUWVDH9YI8272022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
14
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
15
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
16
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
17
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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.
22
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
23
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
24
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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.”
25
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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
26
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
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.
27
THE UNITE GROUP PLCAnnual Report and Financial Statements 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION