StockMarketWire.com - Student accommodation group Unite has reported 'healthy' letting activity since August, but warned of reduced rental income as its occupancy target fell short due to cancellations from rising Covid-19 cases.

In a trading update, the group said it had 'achieved a strong performance', with 88% of bed spaces let across its whole portfolio in the final stages of the lettings cycle for the 2020-21 academic year, compared to 98% the previous year.

Unite confirmed that while letting activity since A-Level results in August had been 'healthy', completed lettings fell 'marginally short' of its 90% occupancy target as the recent increase in cases of Covid-19 had resulted in a higher-than-usual volume of cancellations.

It reported that in line with the expectation set out in its half-year results, there would be a 10% to 20% reduction in rental income for 2020-21 compared to 2019/20.

Unite reported that all of its buildings are open, with nomination agreements accounting for 57% of 2020-21 bookings, with the remaining 43% sold on a direct-let basis.

UK students account for a 45% share of its direct-let bookings, up from 38% in 2019-20, which it said reflected an increased focus on capturing market share from houses of multiple occupancy.

An offer to delay start dates has been taken up by around 10% of students leading to a 'modest' shortening in average tenancy lengths to 43 weeks for 2020-21.

Weekly prices have increased by 1.1% year-on-year on a like-for-like basis. But Unite said it was 'too early' to commit to the reinstatement of its dividend.

Unite reported an increase in the valuation of its USAF property portfolio and LSAV investment portfolio, which it attributed to the temporary reduction in stamp duty for residential properties.


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