Slide 1: Preliminary results for the year ended 31 December 2023
Preliminary results For the year ended 31 December 2023 27 February 2024 Partner for Growth
Slide 2: Contents
Contents 1. Performance highlights 2. Financial review 3. Property review 4. Operations review 5. Outlook 6. Q&A 7. Appendices 2
Slide 3: Performance highlights
1 Performance highlights Joe Lister, Chief Executive
Slide 4: Strategy delivering growth
PERFORMANCE HIGHLIGHTS Strategy delivering growth HOME FOR SUCCESS Delivering for our Attractive returns A responsible and customers and universities for shareholders resilient business First university JV agreed Adjusted EPS +8% Continued progress towards 2030 net zero targets Record university and
Slide 5: Strong performance
PERFORMANCE HIGHLIGHTS Strong performance 2023 2022 % Change • Sustained growth in earnings and dividends • Record earnings Adjusted Earnings £184.3m £163.4m +13% • 99.8% occupancy and 7.4% rental growth for 2023/24 • Dividend at 80% of adjusted earnings Adjusted EPS 44.3p 40.9p + 8% • Robust studen
Slide 6: New partnership model
PERFORMANCE HIGHLIGHTS New partnership model • JV with Newcastle University for 2,000 new beds in 2027/2028 • c.£250m total development cost (Unite share: £128m) • Long term strategic partnership • Returns in-line with regional developments • Unite role as developer and operator • High-quality partn
Slide 7: Growing demand for quality universities
PERFORMANCE HIGHLIGHTS Growing demand for quality universities Unite sales mix (2023/24) • Positive long-term outlook for UK student numbers 53% 60% • 16% growth in UK 18-year-olds by 2030 40% • High and mid-ranking universities continue to grow 24% • Applications stable for 2024/25, up 6% vs. 2020
Slide 8: Growing need for student accommodation
PERFORMANCE HIGHLIGHTS Growing need for student accommodation • Many cities facing housing shortages, particularly acute for strongest universities • New PBSA supply 60% below pre-pandemic levels • Private housing supply unable to keep pace with demand, exacerbated by landlords leaving the sector •
Slide 9: Financial review
2 Financial review Mike Burt, Chief Financial Officer
Slide 10: Strong financial performance
FINANCIAL REVIEW Strong financial performance 31 Dec 2023 31 Dec 2022 % Change Income statement Adjusted earnings £184.3m £163.4m +13% Adjusted EPS 44.3p 40.9p +8% Dividend per share 35.4p 32.7p +8% Balance sheet EPRA NTA per share 920p 927p -1% Loan to value 28% 31% Other financial KPIs Total accou
Slide 11: Rental growth offsetting cost increases
FINANCIAL REVIEW Rental growth offsetting cost increases • Like-for-like rental income +7%, reflecting full occupancy and strong rental growth for 2023/24 • Opex increases driven by utilities, staff and other property operating costs • Total cost growth including overheads in line with rental income
Slide 12: 8% EPS growth
FINANCIAL REVIEW 8% EPS growth • Growth driven by rental increases, full occupancy and investment activity • Lower interest costs reflecting reduced borrowings • 8% dividend growth, 80% payout of adjusted earnings £190m 7.9 9.6 (4.9) £180m (8.2) 2.4 5.9 £170m 184.3 176.1 £160m 163.4 £150m 2022 adjus
Slide 13: Driving margin expansion
FINANCIAL REVIEW Driving margin expansion • EBIT margins impacted by inflationary cost pressures, particularly for staff costs and utilities • Targeting c.50-100bps margin improvement in 2024 • Impact of 2023/24 and 2024/25 rental increases • Inflation moderating for staff costs and utilities in 202
Slide 14: Technology upgrade programme
FINANCIAL REVIEW Technology upgrade programme • £26m investment underway for re-platforming of PRISM. £12.8m incurred to date with balance in 2024 and 2025 • Targeting <5-year payback through cost efficiencies and year-round utilisation • New accounting treatment for cloud-based software, implementa
Slide 15: Resilient NTA
FINANCIAL REVIEW Resilient NTA • 1% reduction in EPRA NTA to 920p, translating to 2.9% total accounting return • 7.4% rental growth offset by 31bps yield expansion, average yield now 5.0% • Surpluses on completed projects offset by reduced values for projects in construction • Completion of 16 fire
Slide 16: Fire safety
FINANCIAL REVIEW Fire safety • All properties safe to operate with risk-based approach to cladding remediation works • New provision for works on a further 10 properties in 2023, to be incurred over next 12-18 months • Expect to recover 50-75% of total costs through claims from contractors • £13.6m
Slide 17: Robust balance sheet
FINANCIAL REVIEW Robust balance sheet Weighted average cost of debt 5.0% portfolio yield 6% • Significant investment capacity 4.3% • £407m committed capex 4% 3.4% 3.6% 3.2% • £300m new debt secured in Q1 2024 2% • Gradually increasing cost of debt • 15% of see-through debt to refinance in 2024 - 202
Slide 18: Financial outlook for 2024
FINANCIAL REVIEW Financial outlook for 2024 Rental growth Costs Earnings & dividend 7.4% for AY2023/24 EBIT margin Adjusted EPS of 45.5-46.5p 99.8% occupancy +50-100bps YoY +3-5% YoY At least 6% for AY2024/25 3.6% cost of debt 80% dividend 98-99% occupancy +(40)bps YoY payout Total accounting return
Slide 19: Property review
3 Property review Mike Burt, Chief Financial Officer
Slide 20: Rental growth supporting valuations
PROPERTY REVIEW Rental growth supporting valuations £bn UK PBSA investment volumes 12 Student • Resilient investment activity for PBSA iQ Roost 10 Liberty • £2.8bn of transactions in 2023 8 Living • Pick-up in activity in Q4 6 • Private equity and institutional buyers active 4 2 • 1.2% like-for-like
Slide 21: Value-enhancing investment activity
PROPERTY REVIEW Value-enhancing investment activity • Continued focus on portfolio quality and ability to deliver sustainable rental growth • Portfolio 93% aligned to Russell Group cities by value • Recycling capital into stronger assets across development and refurbishment pipeline Development Asse
Slide 22: Accelerating development activity
PROPERTY REVIEW Accelerating development activity • Development pipeline now totals £1.3bn and 6.8% yield on cost • Committed pipeline of £569m • Further £701m in university JV and future projects • Expect to make further development commitments in 2024 • New addition of 500-bed scheme in Elephant &
Slide 23: A responsible and resilient business
PROPERTY REVIEW A responsible and resilient business EPC ratings by floorspace • Significant improvement in EPC ratings 100% 92% • Now >99% A-C rated (2022: 80%) 75% 61% • Energy intensity reduced 8% from 2019 baseline 50% • Further £11m investment planned for 2024 35% 22% 19% 25% 7% • Continued pro
Slide 24: Operations review
4 Operations review Karan Khanna, Chief Operating Officer
Slide 25: Sector-leading brand and platform
OPERATIONS REVIEW Sector-leading brand and platform Partnerships 24/7/365 model Student welfare PRISM platform • Trusted partner • Passionate teams • Industry leading offer • End-to-end technology platform • 40% market share of • There when you need us • Support to Stay nominations with • Growing us
Slide 26: Strong outlook for 2024/25
OPERATIONS REVIEW Strong outlook for 2024/25 Occupancy and rental growth 99% 99% 98-99% 8% 100% • Excellent operating performance 6% 94% 95% • 99.8% of beds let for 2023/24 4% 88% 7.4% 90% 6.0%+ • 53% let to universities (2022/23: 52%) 2% 85% 3.5% 2.3% - 80% • Good progress with reservations for 202
Slide 27: Providing value-for-money to customers
OPERATIONS REVIEW Providing value-for-money to customers Rental growth vs. incomes and inflation (Sept-19 to Sept-23) • Unite rents 7% more affordable in real terms than 2019 30% 24% 22% • Rent increases in line with maintenance loan 20% • Focused on sustainable long-term growth 12% 13% • Pricing af
Slide 28: Delivering for our customers
OPERATIONS REVIEW Delivering for our customers Net promoter scores • Increasing customer advocacy +50 +42 +38 +40 +33 +35 • 24/7 operating model +32 +30 • Peer support from Resident Ambassadors +20 +20 +10 +7 • Best-in-class student support N/A - • Flagship Support to Stay programme 2020/21 2021/22
Slide 29: Accelerating product innovation
OPERATIONS REVIEW Accelerating product innovation Common rooms Bedrooms & kitchens New room types Elevating common rooms to Upgrading ‘heart of the home’ Exploring new layouts to cater better meet student needs for core ensuite product to non-1st year students 29
Slide 30: Upgrading our technology platforms
OPERATIONS REVIEW Upgrading our technology platforms Digital Commercial Service • Website • Booking engine • Maintenance scheduling • Student app • Property management • Case management • CRM • Agent booking system • Safety systems <5-year payback supporting 100bps margin improvement 30
Slide 31: Leveraging our platform
OPERATIONS REVIEW Leveraging our platform Build to Rent pilot • Testing our capabilities for young professionals • 319-bed pilot BTR acquisition in Stratford • 103-bed pilot as part of Abbey Lane development • Fully integrated into Unite platform from Q2 2023 • Increasing efficiency following insour
Slide 32: Outlook
5 Outlook Joe Lister, Chief Executive
Slide 33: My reflections
OUTLOOK My reflections An amazing High-quality Great business opportunities team 33
Slide 34: My priorities
OUTLOOK My priorities HOME FOR SUCCESS Great place to live Great place to work Great place to invest High quality, value-for- Engaged teams, delivering Sustainable earnings growth money homes for customers Sector-leading Total Trusted university partner Committed to our purpose Accounting Return Ali
Slide 35: Opportunities to grow our platform
OUTLOOK Opportunities to grow our platform Sector-leading platform Growth drivers Sustainable rental growth Structurally growing sector Track record of above inflation growth Supports margin improvement Best-in-class operating platform Development pipeline Record £1.3bn pipeline 6.8% yield on cost H
Slide 36: Positive outlook
OUTLOOK Positive outlook • Strong 2023 results • Record customer satisfaction • Record earnings • Robust valuations and balance sheet • Confident outlook for 2024 and beyond • Strong reservations • 3-5% EPS growth • Expect 10-12% TAR (before yield shift) • Platform for growth • Record development pi
Slide 37: Q&A
6 Q&A
Slide 38: Appendices
7 Appendices
Slide 39: Home for Success
APPENDICES Home for Success 82% of customers using MyUnite app • City-centre locations with range of price points • • Close to university campuses Shared living and studios 68% of customers used • Good transport links online check-in • Help when it’s needed • 24/7 customer support centre >4,000 stud
Slide 40: Making our buildings net zero carbon
APPENDICES Making our buildings net zero carbon 40
Slide 41: High quality, affordable accommodation
APPENDICES High quality, affordable accommodation • Value-for-money is the most important factor influencing students’ decisions on where to live • Our accommodation is comparable in cost to HMO, we provide valued product and service features not found in HMO • Higher mortgage costs and new EPC stan
Slide 42: 2023 asset management highlights
APPENDICES 2023 asset management highlights The Bridge House, Edinburgh Oak Brook Park, Birmingham • 319 beds in Edinburgh city centre • 656 beds adjacent to University of Birmingham campus • £8.7m investment delivering 8.7% yield on cost • £9.2m accretive investment delivering 9.3% yield on cost •
Slide 43: Portfolio overview
APPENDICES Portfolio overview Geographical breakdown of portfolio Aberdeen 2023 Completed beds Full-time student City rank (23/24) numbers (22/23) Edinburgh 1 London 12,574 382,635 Glasgow 2 Liverpool 5,975 55,325 7 Newcastle 3 Manchester 5,639 97,785 Durham 4 Birmingham 5,582 85,215 5 Leeds 5,533 6
Slide 44: Portfolio and customer breakdown
APPENDICES Portfolio and customer breakdown Customers by domicile Customers by year of study Distribution of beds by weekly price Post graduate, 2023/24 2022/23 2021/22 17% 30% 20% UK 72% 72% 70% 10% 1st year Non-EU 26% 25% 25% undergrad., 0% Returning undergrad., 55% 28% Other EU 2% 3% 5% London Ro
Slide 45: 2024 financial outlook
APPENDICES 2024 financial outlook AY2023/24 AY2024/25 FY2024 Comment Operating performance Rental growth 7.4% 6-7% One term of 2024/25 income in FY2024 Occupancy 99.8% 98-99% EBIT margin 68.5-69.0% +50-100bps YoY Property activity (Unite share) Development capex £250-300m Build costs and site purcha
Slide 46: Rental portfolio analysis December 2023
APPENDICES Rental portfolio analysis 31 December 2023 Wholly owned USAF LSAV Lease Total Unite share London Value (£m) 1,175 405 1,641 14 3,235 2,142 Beds 3,802 1,883 6,649 260 12,574 38% Properties 11 6 14 1 32 Prime regional Value (£m) 1,156 906 - 21 2,083 1,432 Beds 7,982 6,043 - 618 14,643 25% P
Slide 47: Operations result
APPENDICES Operations result 2023 2022 Change Wholly Share of Wholly Share of £m Total Total £m % Owned Fund/JV owned Fund/JV Rental income Like-for-like properties 224.7 94.4 319.1 209.0 88.8 297.8 21.3 7% Non Like-for-like properties 34.1 16.3 50.4 32.8 9.1 41.9 8.5 Total rental income 258.8 110.7
Slide 48: EPRA performance measures
APPENDICES EPRA performance measures 2023 2022 2023 2022 £m £m Pence per share Pence per share EPRA Earnings 176.1 155.8 42.4 39.4 Adjusted earnings 184.3 163.4 44.3 40.9 EPRA NTA 4,014.7 3,716.7 920 927 EPRA NRV 4,330.7 4,029.6 992 1005 EPRA NDV 4,116.0 3,960.3 943 988 EPRA net initial yield 4.8% 4
Slide 49: EPRA earnings statement
APPENDICES EPRA earnings statement USAF LSAV 31 Dec 2023 31 Dec 2022 Wholly owned (Unite share) (Unite share) £m £m Rental income 259.2 57.5 52.8 369.5 339.7 Property operating expenses (79.8) (20.0) (13.2) (113.0) (98.7) Net operating income (NOI) 179.4 37.5 39.6 256.5 241.0 NOI margin 69% 65% 75%
Slide 50: EPRA balance sheet
APPENDICES EPRA balance sheet USAF LSAV Unite Group Unite Group £m Wholly owned (Unite share) (Unite share) 2023 2022 Balance sheet Rental properties1 3,728 828 954 5,510 5,397 Leased properties 85 - - 85 90 Properties under development 175 - - 175 203 Total property portfolio/GAV 3,988 828 954 5,77
Slide 51: EPRA capital expenditure
APPENDICES EPRA capital expenditure 2023 2022 Wholly Share of Group Wholly Share of Group • Our portfolio investment plan £m owned JVs share owned JVs share includes £1,000/bed p.a. of Build to Rent 2.1 - 2.1 1.3 - 1.3 protective spend Developments 58.8 - 58.8 193.0 - 193.0 1. Sustainability (c.£200
Slide 52: Resilient performance by co-investment vehicles
APPENDICES Resilient performance by co-investment vehicles • Delivering attractive total returns Summary financials • Full occupancy and rental growth USAF LSAV 2023 £m £m • Robust performance in USAF 2,941 1,910 GAV • Strong rental growth in high-quality portfolio Net debt (800) (631) • Fully inves
Slide 53: LTV reconciliation December 2023
APPENDICES LTV reconciliation 31 December 2023 Net debt GAV LTV • Group maintains c.30% LTV target on See-through LTV (1,571) 5,685 27% see-through basis Net payables (100) - • EPRA LTV includes net payables reflecting: • Trade creditors (£74m) Intangibles - 9 • Fire safety provisions (£23m) EPRA LT
Slide 54: Debt information
APPENDICES Debt information 31 Dec 2023 31 Dec 2022 Facility Drawn Maturity £m £m Net debt £1,571m £1,734m On-balance sheet LTV 28% 31% Unsecured bond (LL 2024) 300 300 2024 Net debt:EBITDA ratio 6.1 7.3 Sustainable RCF 750 38 2026/27 Interest cover ratio 4.6 3.7 Unsecured term loan 150 150 2027 Ave
Slide 55: Secured development and partnerships pipeline
APPENDICES Secured development and partnerships pipeline Type1 Target Secured Total Total Capex in Capex Forecast NAV Forecast yield delivery beds completed development period (£m) remaining remaining on cost value costs (£m) (£m) (£m) (£m) Committed development Bromley Place, Nottingham DL 2024 271