Unite Group Shares Decline as Property Devaluation Drives Statutory Loss

Shares in Unite Group (UTG) fell on Tuesday after the UK's largest student accommodation provider reported a significant statutory loss for the first half of 2026, raising investor concerns about property valuations and balance sheet leverage.

Despite beating consensus estimates on an adjusted basis, the company's headline figures were weighed down by a £417 million IFRS pretax loss, according to its half-year report. This was primarily caused by a 6.4% decline in its portfolio property values as property yields rose by 29 basis points to an average of 5.5%.

Valuation and Leverage Concerns

The market appeared to focus on the underlying asset health and debt metrics rather than the operational performance. The drop in property valuations led to a 9% decrease in the EPRA net tangible asset (NTA) value per share, which fell to £8.65.

Several key factors fueled investor caution:

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• Adjusted net income fell 2% year-over-year to £142 million, impacted by higher interest costs and prior-year asset sales.
• Leverage increased, with pro-forma net debt to EBITDA climbing to 7.5 times.
• Management flagged a future 0.6p per share earnings headwind from the Renters’ Rights Act.

Adjusted Earnings Beat and Outlook

While the statutory loss dominated sentiment, Unite's adjusted earnings per share (EPS) of £0.271 came in slightly ahead of the consensus forecast of £0.2567. In a move to support the share price, the company also expanded its share buyback program from £100 million to £165 million.

Management maintained its full-year 2026 adjusted EPS guidance of 41.5p to 43p and set an occupancy target of 94% to 96% for its core portfolio. However, the company noted a cautious outlook regarding competitive university clearing conditions and uncertainty around international postgraduate student demand.