Unite Share Price (UTG)

Further info.
The Govt now is aiming to increase the number of International Students to 600k from the current 450k over the next 10 years.

https://www.theguardian.com/politics/2019/sep/11/uk-work-visas-for-foreign-students-all-you-need-to-know

On the basis that PBSA beds are being built at a rate of 25,000 per year - and UK demand is still rising - it appears that the under-supply that supports rental growth is likely to be maintained.

Regards, Maddox

Excellent news today for all UK Universities and Purpose-Built Student Accommodation (PBSA) providers. The Govt is to change the rules to now allow foreign students studying in the UK to work for a further two years unrestricted. There are currently 450k international students in the UK. This move will undoubtedly boost numbers as the UK has been far less attractive than other top destinations, specifically Australia and US, that already allow students to stay-on to work.

This thankfully reverses the disastrous bone-headed approach introduced by Theresa May as Home Secretary to require students to leave after 4 months. May saw students as a soft target to hit her hopeless immigration targets - despite the hard evidence that very few were over-stayers.

This move applies to all trusted higher education providers and will thus exclude the dodgy language schools that were flouting the immigration rules.

https://www.bbc.co.uk/news/uk-49655719

Regards, Maddox

A few select quotes from the Guardian today.....

'Applications from Chinese students to study at UK universities have gone up 30% since last year'

'The Ucas figures also revealed an increase in the number of British 18-year-olds applying for places, up 1% on last year to 275,520 despite a 1.9% fall in the overall 18-year-old population of the UK. EU applicants have also risen 1%, to 50,650 despite the Brexit uncertainty, and Ucas reported a record number of applicants from outside the EU at 81,340, an increase of 8%.'

hTTps://www.theguardian.com/education/2019/jul/11/chinese-students-applications-to-uk-universities-up-by-30

Market fundamentals appear strong, and this also highlights the defensive nature of this sub-sector of the property market.

Regards Maddox

As I said in my post on the 3 June I thought a large deal was in prospect - I didn't however think it was going to be this big! The news that Unite is in the late stages of taking over Liberty Life for c. £1.4bn is clearly a very significant deal.
We don't know the details but a few points to reflect upon:
aa) The price paid will around LL NAV so no premium;
bb) This significantly scales up the student property management arm of Unite; and
cc) Unite's unique structure gives it substantial financial deal capacity.
On this last point Unite's structure of a property development and management company supported by two own managed property funds distinguishes it strategically from it's competitors, the funds are:
USAF £2.26bn – Unite own c.23%; and
LSAV £1.26bn – Unite own 50%.
The financial firepower that this structure provides is a key strategic advantage in what is likely to be a consolidating sector.
Regards, Maddox

Marcus Phayre-Mudge, Fund Manager,TR PROPERTY INVESTMENT TRUST PLC on Unite:

'Student accommodation remains a core holding through Unite Group which returned 19% in the period. The sector has matured since Unite's first purpose built student building 28 years ago and the estimated sector value in the UK alone is now c.£50bn. Given the well flagged 3% fall in the number of UK 18-20 year olds this year ('the Millenium dip'), the drop of just -0.1% in university acceptances is encouraging.
Overseas student numbers from non-EU applicants are up strongly (+6.5%) but it was also encouraging to see EU numbers rise by 2.8% given the Brexit uncertainty. Looking forward the rapid reversal of the demographic dip from 2021 and the steady growth in university participation rates (35% in 2015 to 38% in 2018) remain key positive tailwinds. Unite is constantly improving its portfolio (focusing on 22 key markets) through its development pipeline alongside an exit strategy from subscale locations.'

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TRY/14091571.html