Unite Regulatory News (UTG)

THE UNITE GROUP PLC

('Unite Students', 'Unite', the 'Group', or the 'Company')

QUARTERLY VALUATION UPDATE FOR THE UNITE UK STUDENT ACCOMMODATION FUND AND THE LONDON STUDENT ACCOMMODATION JOINT VENTURE

Unite Students, the UK's leading owner, manager and developer of student accommodation, announces the quarterly property valuation of the Unite UK Student Accommodation Fund ('USAF') and the London Student Accommodation Joint Venture ('LSAV') as at 31 March 2020.

At 31 March 2020, USAF's property portfolio was independently valued at £2,788 million, representing a like-for-like decrease of 2.2% during the quarter. The portfolio comprises 30,209 beds in 79 properties across 22 University towns and cities in the UK.

LSAV's investment portfolio was independently valued at £1,315 million, down 1.5% in the quarter on a like-for-like basis. LSAV's investment portfolio comprises 8,354 beds across 12 properties in London and Aston Student Village in Birmingham.

The like-for-like valuation decrease for both USAF and LSAV is driven by the impact of Coronavirus, which has led to an anticipated reduction in income resulting from the Company's previously announced decision to forgo rent for students who choose to return home for the remainder of the 2019/20 academic year. The valuations include no rental growth during the quarter. Overall, the USAF portfolio is valued at an average yield of 5.3% and the LSAV portfolio at an average yield of 4.4%, both of which are broadly unchanged over the quarter.

In light of current market uncertainty created by Coronavirus, the valuations have been reported on the basis of 'material valuation uncertainty' in line with recent RICS guidance.

Current trading

Requests by students wishing to cancel the remainder of their contracts for the 2019/20 academic year are currently being processed. We are also working closely with our university partners and will continue to provide accommodation through our nomination agreements and to all those students who are staying with us. As previously guided, we expect a reduction in Group cashflow of £90-125 million in 2020, which includes reduced income for the summer semester of 2019/20, a significant reduction in summer business and an allowance for an impact to the start of the 2020/21 academic year. We currently expect that the 2020/21 academic year will commence on broadly the same timetable as prior years, reflecting the Government's proactive decision to cancel A-Level exams this year.

Reservations across the Group for the 2020/21 academic year are currently at 79%, in line with the same time last year (79%). However, we recognise there is a risk that travel restrictions imposed to combat Coronavirus result in a reduced intake of international students for 2020/21. We are shifting the emphasis of our marketing to target the c.1.2 million students who we know have an accommodation requirement for the new academic year. This includes international students studying multi-year courses and domestic students living away from home, including those who might otherwise stay in houses of multiple occupancy (HMOs). We will also maintain a close dialogue with our university partners as their accommodation requirements for 2020/21 become clearer.

Joe Lister, Unite Students Chief Financial Officer, commented:

"Our decision to forgo rent for students who choose to return home for the remainder of the current academic year as a result of the Coronavirus crisis has impacted valuations for the period. However, we are confident that our actions will ensure that we emerge from this uniquely challenging period with our reputation with students and Universities, not only protected but enhanced.

Over the coming weeks we will have greater visibility over the income we expect to receive for the summer semester of 2019/20. Our operating platform provides us with the flexibility to rapidly implement new marketing strategies for 2020/21 and reduce costs where appropriate."

ENDS

For further information, please contact:

Unite Students

Richard Smith / Joe Lister / Michael Burt Tel: +44 117 302 7005

Powerscourt

Justin Griffiths / Victoria Heslop Tel: +44 20 7250 1446

About Unite Students

Unite Students is the UK's largest owner, manager and developer of purpose-built student accommodation serving the country's world-leading Higher Education sector.

Following our successful £1.4bn acquisition of Liberty Living's UK assets in November 2019, we now provide homes to 74,000 students across 177 properties in 27 leading university towns and cities.

Our people are driven by a common purpose: to provide a 'Home for Success' for the students who live with us and to be the most trusted brand in the sector. We do this through quality service, quality people and quality properties, all designed on the basis of an excellent insight into students' needs and preferences.

Unite's accommodation is high quality, affordable, safe and secure, and located where students want to live. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.

We hold a five-star British Safety Council audit rating (out of five) following an Occupational Health and Safety audit. The audit measured our performance against a number of key safety management indicators, providing an international benchmark for safety management systems and indicating best practice for continual improvement.

Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.

Our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure. A key part of this strategy is growing the number of beds let through partnerships with the strongest UK universities, which are experiencing record levels of student demand. We currently partner with 45 universities across the UK, guaranteeing that 56% of our rooms are let under 'nomination agreements' providing high visibility of forward occupancy and rental growth.

Unite Students has spent years helping young people thrive in new situations and help them manage the big 'Leap' to university life. Our insight has identified a significant gap between student expectations and reality. To support this leap, we have developed the Leapskills programme, helping to prepare prospective students for independent living. The programme introduces students to a number of student life scenarios to provoke group discussion on conflict resolution, problem solving and gives a general insight into shared living to help closer match expectations to reality.

Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation scholarships. The Foundation has so far provided scholarships for 434 young people working in close collaboration with 27 partner universities.

Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £3 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).

Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.

For more information, please visit Unite's corporate website www.unite-group.co.uk, the student site www.unite-students.com or the Unite Foundation www.unitefoundation.co.uk