Unite Share Price (UTG)

I think it's reasonable to expect SP to move back above 1300p in a few months time (if no more lockdowns).

UTG H1 Results - extremely solid. Covid has impacted income and thus also NAV so a double hit but UTG showing great resilience and this effect is starting to unwind. They also announced a new 1000 bed development in Stratford, London.

Whilst, market recovery is underway with a return to face-to-face teaching we're not out of the woods yet. We've still to see the return of a fresh intake of international students and UK clearing out-turn to determine the final level of demand. A few Universities are saying they will continue with remote teaching - but I can't see that lasting - it's not what students want and if that is what's on offer they will go elsewhere.

Just a couple of points I'll highlight.

UTG's revenue is 80% covered by nomination agreements or UK students. Of the remaining 20% exposure to international students - a third of these are already in the UK.

UTG have identified that student's top concern is climate change and are responding positively: UTG's development in Paddington is aiming for zero carbon rating. This green initiative will of course also enhance their ESG credentials.

Unite is having to absorb additional costs to remove HPL cladding on some of their properties. They are looking to recover costs from the developers but this will probably take some time.

University deals are under discussion - that should add additional NAV growth. The LSAV fund has capacity and are actively seeking more PBSA property in London. These deals take time to complete - so not expecting a rush of deals here.

Funding is looking rock solid and Unite has the prospect of further reducing the cost of its debt. LTV is a conservative 30% giving capacity to fund further deals and/or developments.

So we're on course for a full recovery and UTG are extremely well positioned for further growth - accepting that Covid may have further twists in its tail.

Regards Maddox

Is the student covid crisis distorting the vacancy rate? Or markets overreacting?

Methinks the latter and looking to top-up.

Government now confirmed May 17th for English Uni's to return according to BBC.
The article also confirms my anecdotal observations that many students have returned anyway-
'Even without in-person teaching, many students seem to have gone back to their university accommodation - with a survey from the Higher Education Policy Institute suggesting about two thirds of students had been in their term-time addresses.'

Positive update this morning, and optimistic outlook:

'2021/22 reservations

We have seen a strong sales performance since our preliminary results on 16 March, reflecting increased confidence from both UK and international students as lockdown restrictions begin to ease. Across the Group's total property portfolio, 73% of rooms are now reserved for the 2021/22 academic year with the deficit in sales to prior year continuing to narrow over recent weeks (2020/21: 80%).'

This is then reflected in the portfolio valuations. As at 31 Mar 2021 the two funds are:

USAF – Unite own 22% - like-for-like asset value increased 0.5% during the quarter; and

LSAV – Unite own 50% - like-for-like asset value increased 1.3% during the quarter.

Overall UTG are forecasting a "2-3% rental growth in 2021/22."

So looks like we're going in the right direction and back to normality.