(Alliance News) - Unite Group PLC on Tuesday hailed a strong start to the new year sales cycle for Unite Students, as it raised rental growth guidance on promising performance levels.

Unite Group is a Bristol, England-based owner, manager and developer of purpose-built student accommodation.

Unite said that "higher than expected" rental income in the first term of the 2022-23 academic year had "more than offset" the impact of higher interest costs towards the end of the financial year.

It subsequently reiterated adjusted earnings per share guidance for 2022 at the top end of the 40 to 41 pence range. Adjusted EPS was 27.6p in 2021, so will be up nearly 50%.

Unite Students also emphasised a "strong start" to the new sales cycle, with 70% of beds sold compared to 60% a year prior.

As a result, it raised rental growth guidance to at least 5%, from 4.5% to 5.0%.

Looking ahead, Unite highlighted a committed development pipeline of two schemes, totalling 1,421 beds and GBP200 million in future capex, fully funded from existing facilities.

There has, however, been a "slight easing" in funding market conditions.

Over the fourth quarter, Unite saw like-for-like valuation decreases of 1.4% and 2.8% in USAF and LSAV respectively.

USAF is the Unite UK Student Accommodation Fund, while LSAV is the London Student Accommodation Joint Venture.

However, in the year as a whole, valuations for LSAV increased by 5.6%, and valuations for USAF 4.6%.

"Despite the challenging economic environment, the business remains well positioned thanks to increasing student numbers and growing demand for high-quality, purpose-built student accommodation across our markets," said Richard Smith, chief executive of Unite Students.

"Moreover, our alignment to the strongest universities and the capabilities of our best-in-class operating platform mean we remain confident of continuing to deliver strong operational results."

Unite Group share were trading 0.2% lower at 938.00 pence each in London on Tuesday morning.

By Holly Beveridge; Alliance News reporter

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