Bellwether Of UK Student Housing Flashes An Orange Warning Signal

Unite, the UK’s largest owner of student accommodation, issued a trading update Friday that highlighted the cautious outlook for the sector in 2026. 

Unite cancelled two developments, marked down valuations in two of its funds and flagged that occupancy for the upcoming academic year could be lower than this year. 

Despite this, Unite said it expects rents to grow in 2026, and it sugared the news for shareholders with a £100M share buyback. 

The company’s shares stayed broadly flat after the trading update on Friday, rising 0.4%.

Unite has a market capitalisation of £2.8B and is one of only two listed pure-play student accommodation companies in the UK. It is in the process of taking over the other, Empiric Student Property. 

The 500-bed Freestone Island project in Bristol has been paused while Unite explores “options to secure best value from the project.” This deferral releases approximately £55M of capital previously allocated to the development.

In London, it has cancelled its TP Paddington project, for which it received planning permission in December after three years of trying.

“The 605-bed project is not financially viable based on our target return requirements and an extended delivery programme,” the company said.

It will take a £10M one-off planning charge as a result of the cancellation. 

Unite has preleased 64% of its portfolio for the 2026-2027 academic year, slightly behind the prior year, when the figure was 67% at this point.

It expects occupancy to be 93% to 96% for the 2026-2027 academic year, compared to 95% for the 2025-2026 year, and rents to grow a still-healthy 2% to 3% next year, down from 4% growth this year. 

The value of the 22,361-bed Unite Student Accommodation Fund that Unite manages dropped 0.7% in the last quarter to £2.8B. Rents in the fund are up 0.5%, but the yield on the portfolio rose by 4 basis points.

The value of the 9,710-bed LSAV joint venture with GIC fell 1.4% to £2.8B. Rents in that portfolio rose 2.4%, but yields rose by 16 basis points.