Unite Group (UTG) H1 2026 earnings summary

Executive summary

• Accelerated strategy to align the portfolio with the UK's strongest universities, focusing on high-tariff institutions and robust student demand to drive sustainable growth and higher margins.

• Significant portfolio repositioning underway, targeting disposals of 15,000-20,000 beds (20-25% by beds, 15% by value) to fund reinvestment in high-quality assets and share buybacks.

• Reservations for 2026/27 are ahead of the market, with Unite Students at 89% reserved (+2ppts YoY) and Hello Student at 77% reserved (+9ppts YoY); operational performance remains strong.

• Integration of Hello Student progressing ahead of plan, with occupancy and income growth targets raised and synergies targeted at £18m p.a. by FY2027.

• Acquisition of Empiric Student Property completed, expanding the addressable market and supporting long-term growth.

Financial highlights

• Adjusted earnings down 2% year-over-year to £142.0m; adjusted EPS down 8% to 27.1p, mainly due to higher interest costs and property revaluations.

• Rental income up 11% to £262.3m, reflecting Empiric acquisition and rental growth; like-for-like rental income up 1.5%.

• EPRA NTA per share down 9% to 865p, reflecting a 6.4% revaluation deficit and a 29bps yield increase to 5.5%.

• Interim dividend maintained at 12.8p per share.

• NOI margin at 69.7% for H1 2026; EBIT margin reduced to 67.1% due to higher costs.

Outlook and guidance

• FY2026 adjusted EPS guidance reiterated at 41.5-43.0p.

• Occupancy guidance for 2026/27: Unite Students 94-96%, Hello Student 88-90%; expecting 1-2% rental growth and 0-2% like-for-like income growth.

• Majority of disposals to be completed within 12-24 months, supporting transition to a focused, higher-quality portfolio.

• Positive leasing momentum and robust demand support continued margin improvement.