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Britain's largest purpose-built student accommodation operator, Unite Group, has warned that its annual income could decline by up to 13% in 2026, citing a sustained drop in international postgraduate enrolments amid rising UK education costs and tighter visa rules. The company said demand has been further affected by domestic students choosing to live at home to manage expenses. Unite now expects adjusted earnings per share of 41.5.3.0 pence in 2026, representing a sharper fall than previously guided, largely due to weaker performance at Empiric, the postgraduate-focused platform it acquired earlier this year. Occupancy levels have softened year-on-year, while universities are seeking to offset postgraduate declines by increasing undergraduate intake. The outlook prompted a sharp market reaction, with Unite's shares falling 8% in mid-day trading.
Britain's largest student housing provider, Unite Group, has cautioned that its annual income could fall by as much as 13% in 2026 after a decline in international postgraduate student numbers, driven by higher education costs and immigration policy changes, continued to weigh on demand. Advertisement
The company said on Tuesday that rising tuition fees and living expenses in the UK have made the market less competitive compared with alternative study destinations, particularly in parts of Asia. This has led to a reduction in international postgraduate enrolments, a segment that forms a significant component of Unite's premium accommodation portfolio. At the same time, recent visa policy changes aimed at reducing net migration have further constrained overseas student demand, while more UK students are choosing to live at home rather than rent accommodation to manage their costs.
Chief executive Joe Lister said the overall cost of education in the UK had increased relative to competing markets, resulting in fewer international postgraduates opting to study in the country. He added that this shift in student behaviour was being reflected in Unite's forward income expectations.
Unite now expects adjusted earnings per share of between 41.5 pence and 43.0 pence in 2026, representing a decline of between 9.5% and 12.6% from 2025 levels. This compares with a previous forecast, issued in the past year, that had anticipated a smaller reduction of 7-10%. The company said the downgrade primarily reflects lower income from its Empiric business, which it acquired in January and which has a strong exposure to postgraduate accommodation.
Occupancy across Unite's portfolio for the 2025-26 academic year stood at 95.2%, down from 97.5% in the previous year, signalling a softening in demand conditions. The company noted that universities are increasingly seeking to expand recruitment for three-year undergraduate courses to offset the decline in international postgraduate numbers, a move that could provide some support to accommodation demand over time.
However, market analysts expressed caution over the pace of any recovery. Analysts at Barclays said they believed the weaker operating environment would make it difficult for Unite to return to its previously guided growth trajectory in the 2027-28 academic year.
The outlook weighed heavily on investor sentiment, with Unite's shares falling 8% in morning trading, putting the stock on course for its sharpest single-day decline since October, if losses were sustained.
Alongside its earnings update, Unite said it continued to dispose of non-core assets as part of its portfolio optimisation strategy. The company announced the sale of a London property for GBP 186 million, equivalent to approximately USD 250.9 million, underscoring its focus on streamlining operations and strengthening its balance sheet amid a more challenging student housing market.
Source - Reuters
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