Core Viewpoint - Unite Group is experiencing challenges in occupancy and rental growth, leading to a cautious outlook for the upcoming academic year, while also focusing on cost efficiencies and portfolio repositioning towards higher-tariff universities. Financial Performance - Net tangible assets per share decreased by 2% to 955p, with a 0.5% like-for-like revaluation deficit in the rental portfolio [1] - EBIT margin fell to 65.9% due to lower occupancy and inflationary cost increases, while adjusted earnings rose by 9% and adjusted EPS increased by 2% to 47.5p [2] - Like-for-like income growth was reported at 4.9% for 2025, driven by strong rate growth despite lower occupancy [3] Market Dynamics - Direct-let bookings are slightly ahead year-on-year, with a 25% increase in bookings for recently opened and refurbished properties [4] - For the next academic year, Unite is currently 68% sold, about three percentage points behind last year, primarily due to cautious university nominations [5] - The company noted a decline in international postgraduate demand and a trend of students opting to live at home [6] Strategic Initiatives - Unite is repositioning its portfolio towards higher-tariff universities, with a current alignment of 67% and a medium-term target of 80% [17] - The company announced the sale of St Pancras Way for £186 million, which will help recycle capital for partnerships and developments [18] - Unite is targeting £300 million to £400 million in disposals for 2026, with expected yields of around 5.5% to 6% [19] Cost Management - Overhead rationalization completed in December resulted in a 20% reduction in central staff costs, with £30 million in annual cost efficiencies identified [11] - A technology platform upgrade is expected to generate nearly £7 million in annual operating cost savings [12] Integration and Synergies - Integration of Empiric is underway, with an increased annual synergy target of £17 million, although near-term earnings are expected to be impacted [13][14] Brand Strategy - Unite will maintain "Hello Students" as a separate brand to cater to returners seeking independent living, leveraging its international sales network [15] Outlook - Adjusted EPS guidance for 2026 is set at 41.5p to 43p, with expectations for modest earnings upside from a £100 million share buyback [16] - The company anticipates lower occupancy and rent guidance for 2026, with a focus on achieving cost efficiencies [8][9]

Key Information - The discloser is Jupiter Fund Management Plc, with interests in relevant securities of The Unite Group and Empiric Student Property plc [1][1][1] - The disclosure date is January 12, 2026, with the latest dealing date being January 9, 2026 [1][1] Positions of the Discloser - Jupiter Fund Management Plc holds 2,492,381 ordinary shares, representing 0.50% of the relevant securities [3] - Additionally, there are cash-settled derivatives with a short position of 1,202,382, representing 0.24% [3] Dealings - A sale of 10,647 ordinary shares was executed at a price of £5.76 per unit [7] - No cash-settled or stock-settled derivative transactions were reported [6][8] Other Information - There are no indemnity or option arrangements related to the relevant securities [10] - No agreements or understandings regarding voting rights or future acquisition/disposal of relevant securities were disclosed [11]

Core Insights - The company remains cautious in the current sales cycle, with reservations at 64%, down from 67% last year, but expects to achieve 93% to 96% occupancy and 2% to 3% rental growth [4][7][5] Sales and Marketing - Direct sales are consistent with last year, accounting for 8% of total beds sold, with proactive sales and marketing efforts noted [2] - Upcoming UCAS applications data is anticipated to show positive trends, with applications up 7% as of the October deadline [3] Financial Performance - Fourth-quarter valuations indicated slightly weaker rental growth and mixed yield movements, with USAF down 0.6% in the quarter but up 0.8% for the year [6][22] - The company announced a share buyback program of up to £100 million, reflecting confidence in long-term returns and focusing on shareholder value [10][5] Capital Allocation and Disposals - The company plans to transition to being a net seller, targeting £300 million to £400 million in disposals by 2026, while deferring or canceling some developments [7][12] - Surplus capital will be allocated to university partnerships and share buybacks, with annual capital investment expected to be around £150 million to £200 million [14][9] Market Conditions and University Partnerships - The company works with over 60 universities, with some institutions delaying or pausing renewals due to financial pressures [1][17] - Discussions with universities regarding rent levels indicate a rental growth of around 3% to 4% for multi-year agreements, with no significant pressure to reduce prices [18][19] Future Outlook - The company will provide further updates in late February and early April, with a more proactive approach to guidance than in the previous year [8] - Management expects a stable financing environment, with healthy lender appetite for purpose-built student accommodation [20]

Group 1 - The core viewpoint is that Unite Group Plc, the largest student accommodation provider in Britain, has experienced a significant decline in its share price, reaching its lowest level in over ten years due to a bleak outlook for the upcoming year [1]

Core Viewpoint - The UK's competition authority has approved Unite Group's acquisition of Empiric Student Property for £634 million ($839.48 million) [1] Company Summary - Unite Group is a student accommodation developer that has successfully completed the acquisition of its smaller rival, Empiric Student Property [1] - The acquisition is valued at £634 million, which translates to approximately $839.48 million [1] Industry Summary - The approval from the competition authority indicates a positive regulatory environment for consolidation within the student accommodation sector in the UK [1] - This acquisition may lead to increased market share and operational efficiencies for Unite Group in the competitive landscape of student housing [1]

Transaction Overview - Unite Students is acquiring Empiric Student Property through a cash and share offer of 94.2 pence per Empiric share[6] - The offer consists of 0.085 new Unite shares and 32 pence in cash for each Empiric share[6] - The combined portfolio will have a value of £7.4 billion with 75,000 beds[6] - Empiric shareholders will own 10% of the enlarged Unite Group upon completion[34] Financial Benefits and Synergies - The acquisition is expected to be accretive to earnings and shareholder returns from the second year onwards[6] - £13.7 million in cost synergies are expected to be unlocked through Unite's operating platform[6] - The acquisition is expected to deliver a low double-digit unlevered IRR ahead of Unite's cost of capital, supporting total accounting returns of approximately 10% per annum[6] - Approximately 55% of the £13.7 million annual run-rate benefit is expected to be realized in the first full year following completion[21, 80] Portfolio and Market Expansion - The combined portfolio will include 75,000 beds across 30 cities[11] - The acquisition allows Unite to enter two new Russell Group cities: Exeter and York[11] - The acquisition provides immediate scale in the Returner market, acquiring approximately 20% below replacement cost[18] Financial Position - Pro forma loan to value (LTV) is expected to be 29%[23] - Empiric's H1 2025 EPRA earnings were £14.3 million[26]

Core Insights - The article highlights the increasing demand for student accommodation in Melbourne as international students prepare for their studies in Australia, emphasizing the importance of securing suitable housing before arrival [1][10]. Group 1: Accommodation Options - Iglu is a well-known student accommodation brand in Australia, offering four main projects in Melbourne: Iglu Melbourne Central, Iglu Melbourne City, Iglu Flagstaff Gardens, and Iglu South Yarra, catering to various universities and student needs [1][13]. - Iglu Melbourne Central is strategically located in the CBD, within walking distance to RMIT and Melbourne University, featuring modern amenities that support students' academic and social needs [3]. - Iglu Melbourne City is a mature project favored by upper-year students, providing a stable living environment with a focus on quietness and order, ideal for those facing academic pressures [5]. - Iglu Flagstaff Gardens offers a tranquil setting near Melbourne University, combining accessibility to public transport with a peaceful atmosphere, suitable for students prioritizing a conducive study environment [7]. - Iglu South Yarra is recommended for Monash University Caulfield students, providing a cost-effective option with convenient transport links and a vibrant local community [9]. Group 2: Booking and Services - As new students prepare to arrive, Iglu's properties are entering a peak booking period, with popular room types often fully booked in advance, highlighting the urgency for prospective tenants to secure accommodations [10]. - Iglu operates on an all-inclusive pricing model, covering utilities, internet, furniture, and maintenance, which simplifies the rental process for new arrivals [11]. - The accommodations feature 24-hour security, front desk management, and regular social and cultural events, facilitating a smooth transition for students into their new environment [13].

Group 1 - The core message emphasizes the importance of early booking for student accommodation in Australia, particularly for the second semester of 2025, as Iglu apartments have opened applications for this period [1][3]. - The competitive nature of the accommodation market in popular study cities like Sydney and Melbourne is highlighted, with a recommendation to apply early to secure preferred housing options and better pricing [3][6]. - Iglu offers a variety of room types to cater to different student needs, including private rooms for those seeking solitude and shared accommodations for budget-conscious students [6][8]. Group 2 - Iglu Central Park and Iglu Melbourne Central are noted as prime locations in the CBD areas of Sydney and Melbourne, providing easy access to major universities and urban amenities [5][6]. - Other Iglu properties, such as Iglu Summer Hill, Iglu Chatswood, and Iglu Mascot, are presented as high-value alternatives located in convenient areas with lower rental costs compared to CBD options, making them ideal for students looking to save money without compromising on quality [8][10]. - The overall message encourages students to take action now to secure their accommodation for a smooth transition into their study life in Australia, as the best options are likely to be taken quickly [10].