Vacancy Rates At Regional Unite Group Sites A Warning Shot For PBSA Sector
There were stark warning signs of a slowdown in the UK’s previously buoyant purpose-built student accommodation market after the latest results from listed student housing landlord Unite Group revealed ongoing weakness in future bookings
The PBSA giant said it had sold 95.2% of beds for the next academic year by the end of December, compared with 97.5% a year prior, while 68% of beds had been reserved for 2026/2027, down from 71% and 79%, respectively, at the end of the previous two years.
The news saw the company's share price down around 11% on Tuesday. It has lost approaching 40% of its stock value over the past 12 months.
However, there was a clear divide between regional and top-tier university demand. Unite’s portfolio delivered rental growth of 4% for 2025/2026, cooling from 8.2% a year prior, with vacancies concentrated in Leicester, Nottingham and Sheffield, where softer demand had combined with high levels of existing and new supply.
But Unite said the increased vacancy rates had been partially offset by resilient demand at top-tier universities, where applications rose by 6%. As a result, Unite said it plans to pivot its portfolio mix towards these institutions from 67% to 80%.
Unite also pointed to a 5% increase in UK 18-year-old applicants for the 2026/27 academic year, with international undergraduate applications also up 5% and the lucrative Chinese market up 10%.
The news had been foreshadowed when Unite flagged write-downs on its student accommodation funds in January as demand for its accommodation had continued to show signs of a slowdown.
The student accommodation developer reported a 9% increase in adjusted earnings to £232M for 2025, but its statutory profit plunged by 78% because of a decline in the valuation of its property portfolio. The results also follow Unite’s £100M share buyback programme launched in January, designed to return surplus capital to shareholders.
Unite finalised the £530M acquisition of Empiric Student Property in January, adding 7,700 beds, although this portfolio is currently underperforming compared with the existing portfolio at 89% occupancy.
Unite Students also announced it has agreed the sale of St Pancras Way, a 571-bed property in London, to the Unite UK Student Accommodation Fund for £186M.
St Pancras Way was developed by Unite in 2014 and is fully nominated to University College London for the 2026/27 academic year. The disposal represents a circa 1% discount to December 2025 book value, with a net operating income yield of 4.7%.
“The group delivered a robust performance in 2025, with strong trading across the majority of our portfolio offset by weaker demand in a small number of cities for the 2025/26 academic year,” Unite Chief Executive Joe Lister said in a statement.
“Growing domestic demand for higher education, improving international mobility and constrained housing supply underpin the long-term prospects for the sector,” he added.
