Student housing provider hit by international travel restrictions

Britain’s biggest provider of student housing warned that international Covid travel restrictions had hit demand from Chinese undergraduates.

Unite Students said while its occupancy rates had rebounded as scholars flocked back to university campuses, numbers were still below its expectations for the current year and lower than pre-pandemic levels.

About 94 per cent of its bed spaces had been let for the 2021/2022 academic year, up from 88 per cent during the previous cycle, the company said on Friday.

Management had forecast 95-98 per cent occupancy for the coming academic year. The company expected that reduced occupancy would result in rental income coming in £8m-£10m lower than previous expectations, and at the lower end of management guidance.

“We have seen record demand for UK universities from UK school leavers and non-EU students, particularly for the strongest universities to which we are strategically aligned, although higher grade attainment and restrictions around international travel as a result of the pandemic have impacted occupancy in a small number of cities,” said chief executive, Richard Smith.

The company added that travel restrictions “continue to have an effect on demand from China, where record numbers of new undergraduate students have not yet translated into bookings.” 

Unite’s share price dropped 3 per cent as markets opened on Friday.

The pandemic has hurt many areas of the commercial property market, particularly retail and office space, although some providers are now experiencing a rebound.

Property manager Helical on Friday said it had collected just under 93 per cent of all rents for the quarter to September, boosted by the return to work and the reopening of restaurants and hospitality venues.

The London-focused property manager said 93.5 per cent of rents for the quarter to June had now been collected, and 92 per cent for the quarter ending in March.

The company, which specialises in managing and developing office spaces, was hit hard in the early stages of the pandemic, which rapidly shuttered offices and entertainment venues. However, its share price has ticked back up, gaining 23 per cent so far this year, as backdated rent payments have trickled in.

“It is encouraging to see people returning to central London for both work and pleasure; this is reflected in the increased occupancy of our buildings, success in new lettings and a high level of rent collection,” chief executive Gerald Kaye said in a statement.

“Sentiment has moved away from [work from home] as companies appreciate the importance of the office in motivating teams, as well as working collaboratively and with far greater effectiveness.”

The British Property Federation had estimated that rent arrears for commercial property investors would hit an estimated £7bn between March 2020 and June 2021. However those pressures have eased as lockdown restrictions have lifted and vaccination rollouts have allowed a cautious return to workplaces.

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