Slide 1: Positioned for growth
Positioned for growth Interim Results Six months ended 30 June 2021
Slide 2: Resilience through our people and platform
Resilience through our people and platform • Resilient financial performance H1 2021 H1 2020 FY 2020 • EPRA earnings up 18% despite ongoing disruption from Covid-19 • Further £15.7m (3.9p) recognised for LSAV performance fee in H1 EPRA Earnings £88.3m £74.8m £97.3m • Interim dividend of 6.5p, target
Slide 3: Contents
Contents • Performance highlights • Financial review • Property review • Outlook • Appendices
Slide 4: 1. Performance highlights
1. Performance highlights Interim Results Six months ended 30 June 2021 4
Slide 5: Operational delivery
Operational delivery • Resilient operating performance Occupancy and rental growth • All properties remained open through latest national lockdowns 95-98% 5% 99% 98% 98% 100% • 96% cash collection for 2020/211 88% 4% 80% • Significant headroom under ICR covenants 3% 2-3% 60% • Strong sales momentum
Slide 6: Current trading
Current trading • 4% growth in applicants for 2021/22 YoY growth in applicants (2021/22) • Applications from a record 43% of UK-18 year olds 100,000 7.5% • 14% growth from non-EU students, strong growth from China and India 80,000 • 43% decline in EU students reflecting Brexit and travel restriction
Slide 7: Positive outlook
Positive outlook • Strong outlook for student numbers Most useful learning methods for HE students • Return to growth in the 18-year-old population • Record participation rates Face-to-face • Target for at least 600,000 international students by 2030 Independently • Supportive of 95-98% occupancy an
Slide 8: Creating a responsible and resilient business
Creating a responsible and resilient business • Students are more concerned about climate change than any other issue in 2021 including Covid-19 • Increasing investment in energy and water initiatives to meet sustainability objectives • Reducing consumption, carbon and cost, while maintaining EPC co
Slide 9: 2. Financial review
2. Financial review 9
Slide 10: Resilient financial performance
Resilient financial performance % change H1 2021 H1 2020 FY2020 Income statement EPRA earnings 18% £88.3m £74.8m £97.3m EPRA EPS 8% 22.2p 20.5p 25.5p Dividend per share n/m 6.5p 0.0p 12.75p Cash flow Operations cash flow 189% £80.3m £27.8m £57.3m Balance sheet EPRA NTA per share 2% 837p 828p 818p Lo
Slide 11: Improving earnings performance
Improving earnings performance £m HY 2021 HY 2020 FY 2020 Rental income 152.9 154.9 263.2 Property operating expenses (41.8) (37.5) (82.9) Net operating income (NOI) 111.1 117.4 180.3 NOI margin 72.7% 75.9% 68.5% Management fees 8.2 7.7 14.0 Operating expenses (13.0) (14.1) (30.9) Finance costs (32.
Slide 12: Earnings bridge
Earnings bridge • Ongoing disruption to H1 rental income from Covid-19 • Reflecting lower occupancy for 2020/21 and 45% uptake of 10-week rent discount by students • £15.7m performance fee recognised for LSAV in H1 • £27.1m now recognised to date £100m £90m 15.7 (3.2) (2.5) £80m 7.5 £70m (2.0) £60m
Slide 13: 2021 earnings guidance
2021 earnings guidance • Guidance for 27-30p of EPRA EPS for FY2021, excluding LSAV performance fee • Dividend payout ratio of at least 65% of EPRA EPS excluding LSAV performance fee in FY2021 • Increasing to 80% as market conditions stabilise £m FY2020 FY2021 Comment Term 2 119 90 Impact of 10-week
Slide 14: Earnings growth outlook
Earnings growth outlook • High visibility over significant future earnings growth • Positive rental growth outlook • Pipeline de-risked by University partnerships • £18m annual cost synergies from Liberty Living • Pro forma LTV of 30-35% post pipeline and disposals • 74% EBIT margin target by end of
Slide 15: NAV bridge
NAV bridge • 2% increase in EPRA NTA • Reflecting £ for £ unwind of two thirds of the Covid-19 rental discount for 2020/21 • Modest yield compression for London portfolio • Recognition of £15.7m LSAV performance fee with further c.£10m anticipated in H2 • Further £16m provision for the replacement o
Slide 16: Cash and debt facilities
Cash and debt facilities • Robust balance sheet Key debt statistics (Unite share) • LTV of 30% (Dec-2020: 34%) 30 June 2021 30 June 2020 31 Dec 2020 • Investment credit rating maintained Net debt £1,501m £1,688m £1,742m • Debt markets open and supportive LTV 30% 33% 34% Net debt:EBITDA ratio1 • Oppo
Slide 17: LSAV extension and performance fee
LSAV extension and performance fee • Resilient performance by co-investment vehicles Summary financials • Slight reduction in management fees due to income USAF LSAV disruption from Covid-19 £m £m • Both vehicles reinstated distributions in H1 GAV 2,796 1,702 • £35m of USAF units traded in H1 at a s
Slide 18: 3. Property review
3. Property review 18
Slide 19: Market update
Market update • PBSA continues to attract significant investment volumes UK PBSA Investment Volumes • Increased transaction activity in H1 8 £bn • Driven by growth of larger operating platforms and an 6 increase in activity from private equity 4 • Expect strong investment activity in H2 following H2
Slide 20: Enhancing our portfolio
Enhancing our portfolio • £261m of disposals in H1 (Unite share) at book value Capital recycling (Unite share)1 £400m • Exiting a number of older and less operationally £300m efficient provincial assets £200m • Growing strategic alignment to the strongest £100m Universities 0m • Proceeds to be recyc
Slide 21: Secured development pipeline
Secured development pipeline Target Secured Total Total Forecast • Secured pipeline of c.5,000 beds to deliver by 2025 delivery beds completed development yield on cost value costs • £769m total development cost at 6.5% yield on cost (£m) (£m) • London represents c.75% by value Direct-let developmen
Slide 22: 4. Outlook
4. Outlook 22
Slide 23: Positioned for growth
Arch View House, London Positioned for growth • Growing income visibility for 2021/22 academic year • Anticipating record student demand and enhanced campus experience • Confident in delivering significant earnings growth and attractive total accounting returns • Return to c.3% p.a. rental growth fr
Slide 24: 5. Appendix
Artisan Heights, Manchester 5. Appendix 24
Slide 25: Home for Success
Home for Success • All-inclusive pricing • All utilities, insurance and services Of customers using • High-speed Wi-Fi (70 Mbps) 86% MyUnite app • MyUnite app • Maintenance teams on hand • Help when it’s needed • 24/7 customer support centre Of customers used • Dedicated welfare leads in all our cit
Slide 26: High quality, affordable accommodation
High quality, affordable accommodation • Value-for-money is the most important factor influencing students’ decisions on where to live • Our accommodation is now cheaper than HMO • Before allowing for the additional product and service features we provide • Covid-19 has demonstrated the value of a t
Slide 27: Our response to Covid-19
Our response to Covid-19 Over £100 million in financial support Financial support for students Proven operational resilience Health, safety and welfare • First PBSA provider to forgo 2020 • All properties open and • First PBSA provider to be summer term rents operational throughout the accredited wi
Slide 28: Proactive approach to cladding
Proactive approach to cladding • Fire safety is a critical part of our health and safety strategy • Linked to our Home for Success purpose • One of the first companies to remove ACM cladding from our properties and taking proactive approach to HPL • We have identified 22 high-rise properties with Hi
Slide 29: Portfolio overview
Portfolio overview Geographical breakdown of portfolio 2021 Completed beds Full-time student Aberdeen City Market share rank (20/21) numbers (19/20) 1 London 11,654 350,000 3.3% Edinburgh 2 Liverpool 6,469 53,495 12.1% Glasgow 3 Birmingham 5,919 77,255 7.7% 7 Newcastle 4 Manchester 5,620 67,295 8.4%
Slide 30: Portfolio and customer breakdown (2020/21)
Portfolio and customer breakdown (2020/21) Customers by domicile Customers by year of study Distribution of beds by weekly price 30% 2020/21 2019/20 Postgraduate, 25% 13% 20% UK 66% 60% 15% Returning 10% Undergrad., 1st year 5% Non-EU 25% 30% 23% Undergrad., 0% 64% Other EU 9% 10% London Provincial
Slide 31: EPRA performance measures
EPRA performance measures H1 2021 H1 2020 H1 2021 H1 2020 £m £m Pence per share Pence per share EPRA Earnings 88.3 74.8 22.2 20.5 EPRA NTA 3,357.0 3,309.9 837 828 EPRA NRV 3,622.1 3,595.0 906 902 EPRA NDV 3,299.7 3,207.1 823 805 H1 2021 FY2020 £m Wholly owned Share of JVs Group share Wholly owned Sh
Slide 32: Rental portfolio analysis
Rental portfolio analysis 30 June 2021 Wholly owned USAF LSAV Lease Total Unite share London Value (£m) 813 408 1,432 17 2,670 1,635 Beds 2,882 1,863 6,649 260 11,654 34% Properties 10 6 14 1 31 Prime provincial Value (£m) 958 657 - 24 1,640 1,127 Beds 7,645 5,337 - 618 13,600 23% Properties 17 18 -
Slide 33: Summary EPRA balance sheet and income statement
Summary EPRA balance sheet and income statement USAF LSAV Unite Group Unite Group £m Wholly owned (Unite share) (Unite share) Jun 2021 Dec 2020 Balance sheet Rental properties 3,249 616 851 4,716 4,893 Leased properties 100 - - 100 102 Properties under development 236 - - 236 187 Total property port
Slide 34: Debt facilities
Debt facilities On-balance sheet Co-investment vehicles Facility Drawn1 Maturity Facility Drawn1 Maturity £m £m £m £m Unsecured USAF HSBC/RBS 450 250 2022 Secured bond 775 775 2023-25 HSBC/RBC/RBS 400 250 2022 Wells Fargo 150 135 2024 Pricoa 150 150 2031 Total 925 910 Unsecured bond (Unite) 275 275
Slide 35: Secured development and partnerships pipeline
Secured development and partnerships pipeline Target Secured Total completed Total Capex in period Capex remaining Forecast NAV Forecast yield on delivery beds value development (£m) (£m) remaining cost (£m) costs (£m) (£m) Direct-let development Derby Road, Nottingham 2023 700 80 58 0 56 21 8.0% Ab