Unite Group PLC on Monday said reservations for the 2023/24 academic year remained at ‘record levels’, while its property portfolio increased 1.2% in value from the previous quarter.

The Bristol-based owner, manager and developer of purpose-built student accommodation said 98% of rooms for the Unite UK Student Accommodation Fund and London Student Accommodation Joint Venture were now sold, up from 91% in 2022/23, as demand remained strong from both university partners and students booking accommodation on a direct-let basis.

Unite said nominations agreements covered 56% of total beds from a year earlier, representing a rise of around 2,000 beds as universities ‘increasingly rely on partners to meet their accommodation needs’.

Meanwhile, USAF’s property portfolio was independently valued at £2.92 billion on June 30, up 1.2% during the second quarter on a like-for-like basis.

Unite said the valuation increase was driven by quarterly rental growth of 2.2% and a 5 basis point increase in property yields. The portfolio comprises 27,924 beds in 71 properties across 19 university towns and cities in the UK, Unite said.

LSAV’s investment portfolio was independently valued at £1.94 Billion, a 1.1% increase on a like-for-like basis during the quarter.

Unite said the valuation increase in LSAV was driven by quarterly rental growth of 2.0% and a 4 basis point increase in property yields. LSAV’s investment portfolio comprises 9,716 beds across 14 properties in London and Aston Student Village in Birmingham, Unite said.

‘Our strong leasing performance will continue to support our property valuations as the market adjusts to an environment of higher interest rates,’ said Unite Students Chief Executive Officer Richard Smith.

‘The supply of purpose-built student accommodation cannot keep pace with growing student demand at the same time as [house in multiple occupation] landlords are leaving the sector. Unite is uniquely positioned to address this housing need through our best-in-class operating platform, university relationships development and asset management capabilities.’

Unite added that both portfolios were now valued at weighted average yields of 5.1% and 4.3% respectively, and that the wider group expects valuations for its wholly-owned portfolio on June 30 to be ‘broadly consistent’ with USAF and LSAV valuation movements over the first half of the year.

Meanwhile, the company said it was committed to four development schemes with a total development cost of £339 million and blended yield on cost of 6.7% for the student accommodation elements.

The remaining costs of £179 million to complete these projects will be funded through the group’s cash and committed debt headroom of £393 million at June 30, Unite said.

During the second quarter, Unite completed a new £400 million secured loan, refinancing its £380 million bond which matured in June. The company said the seven-year loan has a fixed rate of 5.4% and is consistent with its previous guidance for a 3.6% overall cost of debt in 2023 on a see-though basis.

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