Unite Students sharpens focus on leading university cities

The Unite Group is accelerating plans to concentrate its student accommodation portfolio around the UK's strongest universities, unveiling an ambitious strategy that will see up to 20,000 beds disposed of as it refocuses investment on higher-performing university cities.

Announcing its interim results, the UK's largest purpose-built student accommodation (PBSA) operator said it intends to reduce its portfolio from around 72,000 beds across 29 cities to between 55,000 and 60,000 beds concentrated in approximately 20 locations. The strategy is designed to strengthen long-term occupancy, rental growth and profitability by increasing exposure to universities with the strongest and most resilient student demand.

The company has already identified between 15,000 and 20,000 beds for disposal, with the majority expected to come to market during the next 12 months. Unite said proceeds will be reinvested into university partnerships, committed developments and other opportunities offering stronger long-term returns.

Chief Executive Joe Lister said the company was "moving at pace" to increase alignment with the UK's strongest universities, where student demand continues to grow despite wider uncertainty across the higher education sector. He said the strategy would create a higher-quality business with stronger long-term growth prospects.

The decision reflects Unite's assessment that demand is becoming increasingly concentrated among high-tariff universities, where undergraduate student numbers have grown significantly faster than elsewhere over the past decade. Applications to these institutions have risen by 7% ahead of the 2026/27 academic year, compared with 5% growth across the university sector overall, reinforcing confidence that the strongest institutions will continue to capture a growing share of students.

Alongside portfolio disposals, Unite is shifting its development strategy towards university partnerships.

The company has almost 6,000 beds in its committed development pipeline, including major joint ventures with Newcastle University and Manchester Metropolitan University, and said it is in active discussions over further partnerships involving both new developments and the refurbishment of existing university accommodation. It now expects future university partnerships to deliver stronger risk-adjusted returns than conventional off-campus development.

The change in strategy also reflects the increasingly challenging economics of speculative PBSA development.

Unite said higher construction costs, increased regulation and weaker development viability mean new off-campus schemes are no longer commercially attractive in many locations. The company believes constrained new supply, alongside the gradual withdrawal of older university accommodation and private rented HMOs, will support occupancy and rental growth in its target markets over the coming years.

Despite softer property valuations and higher borrowing costs affecting the wider sector, leasing momentum has remained positive. Unite reported that 89% of its beds have already been reserved for the 2026/27 academic year and reaffirmed its full-year earnings guidance.

For the Operational Living sector, the strategy signals a broader shift in investor thinking. Rather than seeking national scale, operators are increasingly concentrating capital in locations where long-term student demand, university quality and constrained supply provide the strongest prospects for sustainable income growth. As development becomes more challenging and funding remains selective, portfolio quality is becoming just as important as portfolio size.