Unite shares rise as Q1 lettings meet guidance, buyback in focus

Investing.com - Unite Group Plc (LON:UTG) shares rose on Friday after Britain’s largest student accommodation owner reported first-quarter lettings broadly in line with guidance and Morgan Stanley maintained its rating, with a price target of 675p against a 52-week low of 442p.The London-listed real estate investment trust said 74% of beds across its portfolio were reserved for the 2026/27 academic year, 2 percentage points behind the prior year’s comparable period, with nomination agreements covering 54% of beds against 58% a year earlier. Direct-let reservations, at 20%, ran 2pp ahead of last year, aided by what the company described as "pricing adjustments and promotional activity."[[pro_promotion |Track breaking market moves with live headlines and analyst notes - up to 50% off]]Unite reiterated guidance for occupancy at the lower end of a 93-96% range and rental growth of 2-3% for 2026/27. Morgan Stanley said the results were in line with consensus and left its thesis unchanged."Our strategy is focused on increasing our alignment to the UK’s leading universities," Chief Executive Joe Lister said. "The Board is exploring options to further accelerate our transformation of the portfolio, which would release surplus capital for reinvestment into share buybacks."Unite said it had completed or placed under offer £130 million of asset disposals and was marketing a further £500 million, including a portfolio of around 7,000 beds in exit cities and lower-growth markets. The company said it remained on track to deliver £300-400 million of disposals in 2026 and had deployed £85 million of a £100 million share buyback programme across 17 million shares.On quarterly valuations, the Unite UK Student Accommodation Fund recorded a like-for-like capital decline of 1.7% in the three months to 31 March 2026, with its portfolio valued at £2,798 million. The London Student Accommodation Joint Venture fell 2.4% on the same basis to £2,034 million. Both declines were driven by yield expansion, 9 basis points for USAF and 13 basis points for LSAV, partially offset by rental growth of 0.1% and 0.4% respectively.On its Empiric acquisition, Unite said Hello Student bookings stood at 33% for 2026/27, against 48% at the same stage last year, following what it called "a delayed start to the sales cycle" after a technology upgrade in late 2025.Unite said it had intervened in Empiric’s sales plan and expected Hello Student to reach around 85% occupancy for the year, with £9 million in annual cost synergies targeted from 2027.Unite said 100% of group debt carried fixed or capped interest rates as of 31 March and that forward hedges and Power Purchase Agreements covered utility costs through 2027.