Bristol-based UNITE, Britain’s leading developer and manager of student accommodation, has dismissed the impact of higher university tuition fees after reporting a strong first half performance.
He added that high occupancy for the current academic year and continued cost vigilance had led to significant improvement in its Net Portfolio Contribution, which includes all income from its investment and management business less all business costs except those relating to development activity.
Development schemes are all progressing well, on time and to budget. The 2012-14 London pipeline of 2,800 beds is on track and progress has been made in growing this pipeline further. Separately, a 477-bed scheme in Glasgow has been secured for delivery in 2012, in line with target returns
Meanwhile agreement with London Organising Committee of the Olympic Games (LOCOG) to provide accommodation for the London Olympic and Paralympic Games has been finalised.
Returning to the issue of higher student fees, Mr Allan said applications to study at UK Universities are 2.1% above 2010/11 levels indicating that, with no increase in funded places, 210,000 applicants will not obtain a place at university this year, underlining the continued strength of demand for places.
He added that with around 70% of universities indicating they will set their fees at or above £8,500 there is likely to be a reduction in applications next year. “However,” he said, ”due to the latent demand highlighted above, we do not anticipate a significant reduction in actual student numbers in the university cities in which we operate.”
He pointed out that international students, who will not be affected by the changes in tuition fees, now represent 46% of UNITE’s customer base (70% in Greater London) and this proportion is expected to rise as UK universities continue to be an attractive option for students around the world.
Elsewhere, the group’s modular construction business is trading in line with plan and has made progress against its target of securing contracts to manufacture, with 1,000 modules now contracted for production in 2011, including 400 modules for external companies. This represents more than 50% of target production for the year and further talks are underway relating to hotel, student and residential schemes.
“The current pipeline gives us confidence that we will achieve our target of 1,800 modules of production in the year, although production will be skewed towards the second half of the year,” said Mr Allan.
