Leading the sector Int Interim im Res esult lts Six months - - PowerPoint PPT Presentation

Leading the sector

Int Interim im Res esult lts Six months ended 30 June 2020

Leading the sector

 Foc

Focuse sed on do doin ing the the rig ight thin thing fo for all ll stak stakeholders

• First PBSA provider to forgo summer term rents
• Decisive actions have enhanced our reputation with

Universities, creating new partnership opportunities

 EPRA earnings

s gro growth dr driven by by Libe Libert rty Livin Living acqu cquis isition, offs ffset by by im impa pact of f Covi vid-19 19

• EPRA Earnings +22%, EPRA EPS down 12%

 Su

Succ ccess ssful in inte tegration of f Libe Libert rty Livi Living

• Secured £15m p.a. of cost synergies from 2021
• Targeting additional synergies

 Gro

rowing visi visibil ility ove ver r in inco come fo for r 2020/21

• 97% of Universities to provide in-person teaching
• Reservations at 84% (2019/20: 93%), of which half underpinned

by nomination agreements

• Targeting 90% occupancy
• Anticipate reinstating dividend payments later in the year

H1 2020 H1 2019 FY 2019 EPRA Earnings £74.8 .8m £61.2m £110.6m EPRA EPS 20.5 .5p 23.2p 39.1p Dividend per share 0.0 .0p 10.25p 10.25p EPRA NAVps 833p 833p 820p 853p Total accounting return (2.3 .3)% 6.3% 11.7% Loan to value1 33% 33% 29% 37% EBIT margin 71.7 .7% 76.0% 71.7% Reservations2 84% 84% 93% n/a

• 1. Excludes leased asset and corresponding lease liability recognised in respect of leased properties under IFRS 16
• 2. Reservations as at 27 July 2020 and 2019. Combined Unite and Liberty Living portfolio for 2020/21

2

Content

 Performance Highlights  Financial Review  Property Review  Outlook  Appendices

3

Int Interim Re Resu sults Six months ended 30 June 2020

Performance Highlights

75 69 83 79 80 79 81 80 83 81 85 82 20 40 60 80 100 Customer satisfaction Higher Education trust

Customer sati atisfaction an and Uni University enga ngagement

2014 2015 2016 2017 2018 2019

Sector-leading platform

 Hig

igh-quality, well ll lo loca cated po port rtfolio

• 88% aligned to strongest Universities
• 4% rise in applications to High-tariff Universities

 Tru

Trusted pa partner to to Univ iversitie ies

• Collected 97% of rent due from Universities in summer term
• f 2019/20
• Reputation enhanced through our response to Covid-19

 Be

Best st-in in-cla lass ope

• pera

rating plat platfo form

• Flexibility to rapidly adjust sales strategies and reduce costs
• Shift to target more domestic students and international students

already in the UK

• £12-15m of cost savings identified for 2020 (Unite share)
• First student provider to have its Covid secure status

accredited by the British Safety Council

 £300m pla

placing enabl bling continued in inve vestment at t enhanced returns

• Pipeline of three schemes for a total development cost of

£250m, either contracted or under offer

• Further opportunities to add to University Partnership or

development pipeline

45% 45% 40% 36% 33% 41% 43% 50% 52% 57%

0% 20% 40% 60% 80% 100% 2016/17 2017/18 2018/19 2019/20 Post pipeline & disposals

Un Unive vers rsity ty al align gnment t by by tari ariff group

Medium High

Source: Unite, TRIM, Redbrick Source: Unite, 2020 Times Rankings

5

YoY

• Y cha

hange in in ac accep eptances es by y dom

• micil

ile (18 18 Jun June deadline)

Cha Change in acc cceptances % YoY YoY UK 2,200 0.5% EU (2,170) (5.9)% Non-EU 5,770 11.6% Tot

• tal

5,800 1.2%

Encouraging outlook for 2020/21

6

 Un

Univers rsities will ill be be ope pen fo for r bu busi siness this this Au Autumn

• 97% will offer face-to-face teaching (Universities UK survey)
• Campuses will be open offering a range of social opportunities

and student support

• Assuming no return to national lockdown

 Stu

Student dem demand expe xpected to to be be robust

• 1% growth in UCAS acceptances as at 18 June deadline
• Record participation rate for UK 18-year-olds
• YoY reduction in deferrals
• Strong UK Postgraduate demand
• Universities being proactive to secure and attract first year

international students, recognising additional risk

 Se

Seri ries of f Govern rnment su support measu sures announced fo for HE

• £2.7bn in tuition fee payments and research funding brought

forward to ensure the viability of all Universities

• Government will cover up to 80% of losses from international

students

• Committed to growth in international student numbers

97% 87% 90% 0% 20% 40% 60% 80% 100% In-person teaching In-person social

• pportunities

Plans communicated to students

Uni niversity pla lans for

• r the

the 20 2020/21 Aut utumn ter term (% of

• f ‘Yes’ re

resp sponses) )

Source: Universities UK Source: UCAS

819 715 893 213 236 294 210 220 235 423 456 529 200 400 600 800 1,000 2010 2020 2030 2010 2020 2030 000s

Fo Forecast growth in n UK UK 18 18-year-old population an and number of f UK UK ac accepta tances to unive vers rsity ty1

UK 18 year old Other UK

University Acceptances 18 year-old-population

Source: ONS, UCAS, Unite

Continued structural demand for Higher Education

7

UK Undergraduate, 1,241,000 PBSA, 650,000 UK PG, 163,000 HMO, 855,500

• Intl. 1st year, 268,000

Live at Home, 392,000

• Intl. Other, 225,000

500,000 1,000,000 1,500,000 2,000,000 Demand Supply

So Sourc rces of f de demand an and supp pply (20 2019/2 /20)

Source: HESA, JLL, Unite

 We exp

xpect stro strong stu student dem demand in in 2021/22

• Enhanced campus experience
• Significant recovery in international student numbers
• Return to growth in the 18-year-old population
• Rising participation rates as HE increasingly viewed as a

societal right

 An

Anticipate co continued flig flight to to qu quali lity by by stud students

• Government policy focused on quality and value of courses,

favouring High and Mid-ranked Universities

• Consistent with our strategic positioning
• Very limited exposure to perceived low value courses

 Outlook su

supportive of f return to to rental gro growth

• High-quality, affordable accommodation
• High income visibility through multi-year nomination

agreements (6 year avg. WAULT)

• Anticipating a near-term slowdown in supply
• Growing opportunity to capture market share from 855,000

beds in Houses of Multiple Occupancy (HMOs)

• 1. Based on 2019/20 participation rate

2020/21 sales update

8

 Re

Reser servations at at 84% 84% for

• r 202

2020/21 (20 2019/20: : 93% 93%)

• Later sales cycle due to some students and Universities delaying

their decision making

• Targeting 90% occupancy, translating to a 10-20% YoY reduction

in income

• Reservations to date show pricing increases vs 2019/20
• Guidance includes contingency for price reductions and customer

incentives

 Nom

• mination re

rese servat ations for

• r 52%

52% of

• f bed

eds (42% contracted)

• Universities beginning to allocate students
• Expect unsigned agreements to complete in coming weeks
• Some Universities seeking flexibility around start dates

 Bro

road-bas ased dem demand for dire direct-let bed eds

• Healthy demand from UK undergraduate students
• Expect to account for 60% of direct-let bookings vs 39% last year
• Encouraging reservations from international students
• Half of bookings from 2/3rd year students

 Hig

igher er tha han usu usual risk risk of

• f can

ancel ellations, par articularly for

• r int

international st students

• Guidance assumes some churn in bookings
• Confirming bookings with students to improve income visibility

Cu Current bre reakdown of

• f re

reser servations (20 2020/21, tot

• tal gro

group)

St Status Beds % of f beds to

• sel

sell Gro ross rental inco ncome (£m) Nominations, contracted 31,442 42% 218.9 Nominations, unsigned 7,412 10% 50.7 UK direct-let 10,064 14% 61.8 International direct-let 13,713 18% 112.8 Tot

• tal

62,631 84% 444.2

Cu Current dir irect-let etre reser servationsby y dom

• micile

le an and yea year of

• f st

study (20 2020/21, tot

• tal gro

group)

000s UK UK Ch China EU EU Other r int ntl. Tot

• tal

First year 3.2 1.0 0.8 0.4 5.4 2nd & 3rd year 6.6 3.4 1.5 1.6 13.1 Postgraduate 0.3 4.3 0.2 0.5 5.3 Tot

• tal

10.1 8.7 2.5 2.5 23.8 % of f res eservations 42% 36% 11% 11% 100%

Successful integration of Liberty Living

9

 Sig

Signifi ficant pr progress du duri ring H1

• Liberty Living city based employees and properties integrated
• nto the Unite operating platform
• Liberty Living head office closed with all support functions

integrated

• Unite customer offer extended to Liberty Living customers
• Integration to conclude by end of September 2020

 Confident in

in co cost st syn synergies of f £15m p. p.a. fr from 2021

• £5-6m to be realised in 2020
• Opportunities to realise additional cost synergies over time
• Reductions in water and electricity consumption
• More efficient procurement around internet, waste and maintenance

 Operational learnings from the ‘best of both'

• Improved allocation and communication process for our

University partners

• Established virtual sales and service centre
• Optimised marketing and social media campaigns

5 10 15 20 2020 2021 2022 £m

Exp Expected sy synergy rea ealisation

Operating expenses Overheads

Source: Unite

Int Interim Re Resu sults Six months ended 30 June 2020

Financial Review

Resilient financial performance

11

% chang hange H1 2020 H1 2019 FY FY 2019 Inc ncome st state tement EPRA earnings +22%  £74.8 .8m £61.2m £110.6m EPRA EPS (12)%  20.5 .5p 23.2p 39.1p Dividend per share (100)%  0.0 .0p 10.25p 10.25p Ba Balance nce she sheet EPRA NAVps1 (2)%  833p 833p 820p 853p EPRA NTAps1 (2)%  828p 828p 812p 847p Loan to value 33% 33% 29% 37% Ca Cash sh flow

• w

Operations cash flow (41)%  £27.8 .8m £47.0m £85.4m Ot Other fin inanc ncial KPIs Is Total accounting return (2.3 .3)% 6.3% 11.7% EPRA EPS yield 2.4 .4% 2.9% 4.9%

• 1. Reconciliation of NAV measures in appendix

Earnings impacted by summer term refunds

12

H1 2020 £m £m H1 2019 £m FY 2019 £m Rental income 154.9 108.3 213.9 Property operating expenses (37.5) (23.9) (53.1) Ne Net op

• perating

ng inc ncom

• me (NOI)

I) 117.4 .4 84.4 .4 160.8 .8 NOI margin 75.9% 78.0% 75.2% Management fees 7.7 7.2 14.4 Operating expenses (14.1) (9.3) (21.8) Finance costs (33.5) (20.7) (43.9) Acquisition and net performance fees

• 6.8

Development and other costs (2.7) (0.4) (5.7) EPRA EPRA ear arni nings 74.8 .8 61.2 .2 110.6 .6 EPRA EPRA EPS EPS 20.5 .5p 23.2 .2p 39.1 .1p EBIT margin 71.7% 76.0% 71.7%

Earnings bridge

13

 EPRA earnings

s im impa pacted by by Covid-19 19

• Growth driven by acquisition of 24,000 bed Liberty Living portfolio in November 2019
• 15% reduction in income for 2019/20, reflecting our decision to forgo summer term rents for students returning home
• Loss of £27m of contracted rent in H1 (Unite share)
• Small reduction in management fees linked to NOI and GAV
• Lost income partially mitigated by cost savings
• Lower opex driven by savings in utility and broadband costs and in-sourcing of summer work
• Overhead savings from reductions to senior pay and lower discretionary spend

74.8

Earnings and cashflow guidance

14

 We

e antic nticip ipate EP EPRA EP EPS of

• f 22

22-25 25p in n 20 2020 20, , re refle lectin ing:

• 10-20% YoY reduction in rental income for Autumn term of 2020/21
• Targeting 90% occupancy
• Includes contingency for a reduction in pricing and shorter tenancy lengths
• £12-15m of P&L cost savings, in addition to £5-6m of cost synergies from Liberty Living
• Additional Covid-19 operating costs offset by efficiency savings in other areas

 Ea

Earnin ings heav heavily ly H1 1 weig eighted giv given zero ero sum summer inc ncome and nd ant ntic icip ipated impact on

• n Aut

utumn te term

 Targetin

ing fur further annu nnual l cost cost savin savings s fr from 202 2021

• Further efficiencies in our operating model, procurement and utility costs
• £15m p.a. of Liberty Living cost synergies from 2021

 Guid

uidance ass ssumes no no ret eturn to to mor more st strin ingent loc

• ckdown meas

measures and nd Univ Universit ity ca camp mpuses ope

• pen in

n th the Aut utumn, , ref efle lecting socia social l di dista stancin ing req equir irements

 Furt

Further guid guidance for for 202 2021 to to be be provid ided follo following st start of

• f th

the e 202 2020/21 aca cade demic c year year

853 833 (26) (3) (1) (3) 1 12 790p 800p 810p 820p 830p 840p 850p 860p 31-Dec-19 Covid-19 income deductions Yield movement Development portfolio June share placing Cladding provision Retained profits/Other 30-Jun-20

NAV bridge

15

 2%

% reduction in in EPRA NAV in in H1

• 2.6% reduction in property values in H1 on a like-for-like basis
• Reflecting impact of rental income deductions relating to Covid-19 disruption
• Yields unchanged
• 9.5% placing in June at 870p

 Sw

Swap br breakage co cost sts s of f £24m/6p to to be be in incu curred on repayment of f Gro roup se secu cure red debt debt in in H2

Cash and debt facilities

16

 Ro

Robust bala alance e shee sheet an and liq liquidity posi

• sition
• £541m of unrestricted cash
• Eligible for CCFF but no plans to draw
• Significant headroom to withstand material Covid-19 related

interruption to income

• Average cash consumption of c.£11-13m per month
• Credit approval for £100m extension of Group RCF

 Co

Continued bala alance shee sheet dis iscipline

• LTV of 33% with medium-term target of 35%
• Targeting disposals in 2020 and 2021 to enhance portfolio quality

 Re

Repay ayment of

• f £20

£207m of

• f sec

secured deb ebt at at a a 4.8 4.8% ble lended coupon

• Swap breakage costs of £24m for £7m annual interest saving
• Reduces average cost of debt to 2.8%
• Resulting in a fully unsecured debt platform
• Earliest Group debt maturity of November 2022

 Sig

Significant he head adroom in in ICR ICR covenants

• Occupancy would need to fall to c.55% for the 2020/21 academic

year to breach tightest covenants

• Contracted nomination agreements already secured for 42% of

beds, providing visibility over income collection

UPDATE

Ke Keyde debt t stati tisti tics (Unite te share)

30 Ju Jun 2020 2020 30 Ju Jun 2019 2019 31 Dec c 2019 19 Net debt £1,688m £897m £1,884m LTV 33% 29% 37% Net debt:EBITDA ratio1 7.3 6.1 6.8 Interest cover ratio 3.3 4.1 3.5 Average debt maturity 4.6 years 5.4 years 5.4 years Average cost of debt 3.0% 3.8% 3.3% % investment debt fixed or capped 77% 100% 93%

• 1. Based on 12m historical average net debt, pro rata for completion of Liberty Living acquisition in late November 2019

£0m £100m £200m £300m £400m £500m £600m 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

De Debt maturi rity pro rofile le2

Group Funds

Source: Unite

• 2. Shaded areas represent secured debt to be repaid in July 2020

Resilient performance by co-investment vehicles

 Performance of

f US USAF and d LS LSAV im impa pacted by by dis disru ruption ca cause sed by by Covi vid-19 19

• Consistent with the performance of the wider business
• Property valuations reduced by 2.2% and 1.5% for USAF and

LSAV in Q1 but flat in Q2

 Gro

rowth in in management fe fees s dr driven by by in incre reases in in GAV ove ver r the the pa past st 12 mon

• nths
• £489m of acquisitions by USAF in 2019

 No fu

further LS LSAV pe performance fe fee realis ised in in pe period

• Confident in realising at least the £5.7m recognised in the

2019 results

• Reflecting conservative valuation assumptions and valuation

evidence post-Covid-19

Source: Unite

17

UPDATE

Su Summary fi financials USA USAF £m £m LSA SAV £m £m GAV 2,789 1,316 Net debt (854) (478) Other assets/(liabilities) (16) (33) NAV 1, 1,919 919 805 805 Unite share of NAV 423 402 LTV 31% 36% Unite stake 22% 50% Maturity Infinite 2022/2027 Un Unite fe fees in peri riod Asset/property management 6.0 1.7 Acquisition fees

• Performance fees
• To

Tota tal 6. 6.0 1. 1.7

Int Interim Re Resu sults Six months ended 30 June 2020

Property Review

Horizon Heights SkelhorneStreet, Liverpool

• 15.3%
• 12.4%
• 9.0%
• 6.2%
• 3.7%
• 2.6%
• 2.5%
• 20%
• 16%
• 12%
• 8%
• 4%

0% Leisure Retail Hotel All Property Office Unite portfolio Industrial

Ca Capital va valu lue gro growth (6m 6m to to Jun Jun-2020)

Source: Unite, MSCI

0% 1% 2% 3% 4% 5% 6% 7% 8% 2006 2008 2010 2012 2014 2016 2018

Va Valuation yields

Unite ite Com

• mple

leted P Portf tfol

• lio

io IPD All Property NIY 10Yr Swap Rate Prime Regional PRS NIY

Source: Unite, MSCI, CBRE

Valuations well supported

 St

Stro rong va valu luation pe perf rformance rela lative to to wide ider UK UK real estat state se secto ctor in in H1

• Acquisition of iQ by Blackstone for £4.7 billion
• Underlines willingness of investors to attribute value to brand,
• perating and development capabilities
• Following a slowdown in activity, portfolios now beginning to

transact at pricing in line with pre-Covid-19 levels

• Pricing supported by one-year income guarantees

 Un

Unite va valu luations: -2.6% in in H1

• £ for £ reduction for lost income arising from Covid-19
• Average yield of 5.0%, unchanged over H1
• Modest yield compression in London and super prime markets
• Further increase in yields in more fully-supplied markets

 Removal

l of f mate terial uncertainty cla lause fo for va valu luations s of f stu student acc ccommodation by by RICS po post-period end end

 Ta

Targ rgeting £100-150m of f dis disposals in in 2020 (Un Unite sh share re)

• Higher levels of disposals planned for 2021 and 2022
• Capital recycling to provide funding for growth initiatives

19

2020

Development progress

20

Horizon Heights Skelhorne Street, Liverpool L35GH

 2,2

2,257 beds to to be deli livered acr cross thr three sc schemes for

• r 202

2020/21

 Whi

hite Ro Rose se View iew in in Le Leed eds will ill be e com

• mpleted on
• n tim

ime an and bud udget

• 30-year nomination agreement for 559 beds with the

University of Leeds

 Co

Completion of

• f Fir

First Way, y, Lo London and nd Arti rtisan Heights, Man anchester dela elayed un until il Q4 4 202 2020

• Not liable for any cost overruns
• Expect to generate income through usual January intake

 Exp

Expect to

• rest

restart con

• nstruction on
• n 20

2022 deli deliveries es in in Q1 Q1 20 2021

• Following the start of the 2020/21 academic year
• Cost of delays expected to be £2 million

 Plan

lanning ap appro roval al sec secured for 416 416-bed Old ld BRI RI dev evelopment in in Bris ristol dur uring H1

White Rose View Leeds

Significant investment opportunities

21 

Cur Current t se secured pipeline of

• f 5,3

,370 beds s to

• delive

ver by y 2024

• £693m total development cost at 6.6% yield on cost



Pl Placi acing to

• fund

und ac acqui uisiti tion n of

• f thr

hree ne new si sites tes excha hang nged or

• r und

under of

• ffer for
• r

2023/2 /2024 delivery at at a a tot

• tal devel

velopment t cos

• st

t of

• f c.£

.£250m1

• All aligned to top 40 Universities
• Yield on cost 50-75bp above pre-Covid-19 levels
• Edinburgh site already exchanged (TDC of £24m)
• One Zone 1 central London site and one prime regional site under offer



Ta Targe geting ng enhan nhanced retu turns ns on

• n ne

new devel velopments ts

• Anticipating reductions in total development costs
• 7.5% yield on cost in London and 8.5% in provincial markets
• 100bp lower for University Partnership schemes
• New London Plan favours University anchored schemes



Cap Capita talising ng on

• n our
• ur bran

and and and reputa tati tion

• n to
• add

add to

• Unive

niversity y Part Partne nerships pipeline ne

• Growing appetite for partnerships with leading operators
• Increasing pressures on University finances and operations
• Wide range of transaction structures being considered, including longer

nomination agreements



New op

• pportun

uniti ties for

• r for
• rward fund

unded ac acqui uisition

• ns
• Regional developers facing funding pressures

Curr rrent t Un University Part Partnerships pipe peline Typ Type Beds Executi tion risk Multi-year nominations Existing 11,400 Low/Medium Off-campus development New 3,100 Medium On-campus development New 7,500 High Stock transfer/outsourcing New 8,000 High To Tota tal 30, 30,00 000 Curr rrent t secure red de deve velopmentpipe peline Beds To Tota tal Development Cost(£m) Yi Yield d on co cost Traditional development 2,469 312 6.9% University Partnerships 2,901 381 6.4% To Tota tal 5, 5,370 370 693 693 6. 6.6%

• /w London

1,861 370 6.0%

• /w Provincial

3,509 323 7.2%

• 1. Subject to planning consent

Int Interim Re Resu sults Six months ended 30 June 2020

Outlook

Well positioned for growth

 A sec

sector-lea eading bus usines ess wit ith an an en enha hanced re reputation

• Committed to delivering long-term growth in earnings

and cashflow

• Continued balance sheet and investment discipline

 Inc

Increas ased vis visibility fol

• llowing st

start of

• f the

he 202 2020/21 aca academ emic yea year

• Intention to re-instate dividend in 2020

 Co

Continued st structural al dem emand for

• r Hig

igher Ed Education

• Anticipating strong student demand for 2021/22
• Record participation rates, reflecting growing awareness
• f the opportunities provided by HE
• Demographics and international growth support positive
• utlook for the next decade
• Well positioned given increasing alignment to High and

Mid-ranked Universities

 Sig

Significant gro growth op

• pportunities

es

• High-quality development opportunities at returns

above pre-Covid levels

• Increasing demand for University Partnerships
• Market share gains from HMOs

23

Horizon Heights Skelhorne Street, Liverpool

Int Interim Re Resu sults Six months ended 30 June 2020

Appendices

• 300
• 200
• 100

100 200 300 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(000s)

Cu Cumulative cha change in in appli lications by Uni niversity tar ariff

Higher tariff Medium tariff Lower tariff

Source: UCAS

Student numbers remain strong

25

 A

A UK UK Un Univers rsity edu duca cation is is hig ighly va valu lued

• Unite works with 21 of 28 UK Universities ranked in

top 200 globally (Source: QS World Rankings)

 St

Strong stu student de demand fo for 2020/21

• Material growth for High-tariff Universities
• Reduction in deferrals vs 2019/20
• Risk remains around international intake despite

strong growth in acceptances

 Record appli

pplication rate fo for UK K stu students

• Over 40% of 18-year-olds applied this year
• Growing awareness of the opportunities and life

experience provided by University

 Government tar

targeting 115k (25%) in incre rease in in in inte ternational stu student numbers rs by by 2030

• Benefit from new two-year post-study visa reflected

in growth in applications for 2020/21

 Confident in

in our r abili bility to to abso bsorb Bre Brexit im impa pact

• 30% forecast reduction in EU demand by 2023/24,

equates to 3% of our customer base

34.7% 33.3% 34.1% 35.3% 36.0% 37.0% 37.5% 37.8% 38.9% 40.5% 20% 25% 30% 35% 40% 45% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Par articipation ra rate e by y UK 18 18-year-olds (30 Jun June dea eadline)

Source: UCAS

Home for Success

 All

All-incl clusive pr pricing

• All utilities, insurance and services
• High-speed Wi-Fi (70 Mbps)
• MyUnite app
• Maintenance teams on hand

 Help when it’s needed

• 24/7 customer support centre
• Customer service teams trained in active listening
• Peer support from 160 Student Ambassadors

 City

ity-centre lo loca cations wit ith range of f pr price po points

• Close to University campuses
• Shared living and studios
• Good transport links

 Dir

Direct ct-le let an and d Uni Universi sity co cont ntracts

• Strong relationships with Universities
• Direct sales through customer website
• Unique online, mobile-optimised booking system

26

Of customers used

• nline check-in at

available properties

75%

Staff trained in studentwelfare

1,000

Of maintenance fixes by the end of the working day

80%

Of customers using MyUnite app

90%

High-quality, affordable accommodation

27

 Valu

alue-for-money is the most important factor influencing students’ decisions on where to live

 The

The cost of

• f our
• ur ac

accommodation is is onl

• nly 8%

8% mor

• re

e exp expen ensive e tha han HMO

• Equivalent to an extra £10 per week for all the additional product and service features we provide

 We

e allo allow st students to

• focus on
• n wha

hat is is im important 136 113 13 10

£60 £80 £100 £120 £140 Rent Bills Service premium

Hass ssle le fr free se serv rvice ces

All-inclusive pricing for utilities, insurance & services High-speed Wi-Fi MyUnite app 80% of maintenance fixes by end of working day

Help when it’s needed

24/7 customer support centre with on-site security Customer service teams trained in active listening Peer support from 160 Student Ambassadors

Bu Buildings des designed around stud student needs

Close to university campuses Shared living with ensuite bathrooms Spaces to study and relax

* Includes ensuite and non-ensuite rooms for Unite, adjusted to 43-week average tenancy length Source: Unite, Rightmove, Save the Student

Aver verage e wee eekly ac accommodation cost (UK exc excluding Lon London)*

Unite HMO sector

Unite as a responsible business

28

 De

Demonstrating se secto ctor le leade ders rship around Covid-19 19

• First student accommodation provider to forgo summer

term rents for students who chose to return home

• Students able to extend their stay at no extra cost

 Add

Addressi sing the the ch chall llenge of f mental l healt lth and d wellb llbeing

• Peer-to-peer support through our Student Ambassadors
• Collaborated on new PBSA wellbeing guide with the BPF
• Staff trained to identify potential welfare issues

 Commitment to

to pro provide the the sa safe fest st and d most st se secu cure envi vironment fo for r stu students s and d our r pe people le

• Five Star BSC Occupational Health & Safety audit (out of 5)
• First PBSA provider to have its Covid-secure status

accredited by the BSC  Wide

idening HE acc ccess ss and d im impro roving stu student outcomes

• Unite Foundation supporting 189 students in 2019/20
• National roll-out of Leap Skills for school leavers

 Investing to

to im impro rove our r envi vironmental l im impa pact

• Committed to 100% renewable energy
• Award-winning engagement programme with the NUS
• Targeting BREEAM Excellent ratings on all new developments

 New su

sust stainabil ility st strategy to to be be la launched by by end d of f 2020

• Providing greater transparency and accountability
• Recently signed up as a TCFD supporter

 Improving pe

perf rformance in in ext xtern rnal ben benchmark rks

• European sector leader for GRESB (listed residential)
• AA rating from MSCI

Portfolio overview

29

1 London 7 Newcastle

Aberdeen Glasgow Edinburgh Durham

5 Leeds 4

Manchester

3

Liverpool

6 Sheffield

Leicester

Loughborough Nottingham

2

Birmingham

Wolverhampton Coventry Medway Exeter

8

Bristol

9

Cardiff

Bath Southampton Bournemouth Portsmouth Reading Oxford Bedford

Geo eograp aphical al bre reak akdown of

• f port
• rtfolio

2020 rank nk Ci City Com Completed bed eds (20/21) Ful ull-timestudent num umbers (18/19) Market sha hare 1 London 11,591 327,840 3.5% 2 Birmingham 6,498 73,845 8.8% 3 Liverpool 6,469 51,980 12.4% 4 Manchester 5,620 66,195 8.5% 5 Leeds 5,610 59,525 9.4% 6 Sheffield 4,498 53,150 8.5% 7 Newcastle 3,763 47,845 7.9% 8 Bristol 3,753 47,345 7.9% 9 Cardiff 3,480 40,065 8.7% 10 Leicester 3,251 38,680 8.4% Top

• p 10

54,533 806 06,470 6.8% Tot

• tal

76,354

Source: Unite, HESA

10

Rental portfolio analysis

30 30 June 2020 Wholly

• wned

USAF LSAV Lease Total Unite share

London Value (£m) 1,015 397 1,046 17 2,475 1,641 Beds 3,499 1,863 5,291 260 10,913 35% Properties 11 6 12 1 30 Prime provincial Value (£m) 867 638

• 28

1,533 1,037 Beds 7,042 5,337

• 618

12,997 22% Properties 16 18

• 2

36 Major provincial Value (£m) 1,151 1,470 270 29 2,920 1,639 Beds 17,324 19,506 3,067 753 40,650 35% Properties 37 48 1 2 88 Provincial Value (£m) 284 283

• 33

600 379 Beds 4,958 3,520

• 1,059

9,537 8% Properties 11 10

• 3

24 Total Value (£m) 3,317 2,788 1,316 107 7,528 4,696 Beds 32,823 30,226 8,358 2,690 74,097 100% Properties 75 82 13 8 178 Unite ownership share 100% 22% 50% 100% Value (£m) 3,317 614 658 107 4,696

Summary EPRA balance sheet and income statement

31

£m £m Whol

• lly

ly owne ned USA SAF (Uni nite shar hare) LSA SAV (Uni nite shar hare) Unit ite Group up Ju Jun 2020 20 Unite Group Dec 2019 Bala lanc nce sheet Rental properties 3,317 614 658 4,589 4,702 Leased properties 107

• 107

110 Properties under development 458

• 458

412 To Total tal pr property po portf tfoli lio/

• /GAV

3,882 82 614 614 658 658 5,154 54 5,225 25 Net debt (1,261) (188) (239) (1,688) (1,885) Lease liability (97)

• (97)

(99) Other assets/(liabilities) (24) (3) (17) (44) (132) EPRA net t asse sets ts 2,500 00 423 423 402 402 3,325 25 3,109 LTV TV1 33% 33% 31% 31% 36% 36% 33% 33% 37% Incom come stat tatement H1 H1 2020 H1 H1 2019 Net operating income 87.4 14.6 15.4 117.4 84.4 Overheads less management fees (2.8) (1.7) (1.9) (6.4) (2.1) Finance costs (25.7) (3.3) (4.5) (33.5) (20.7) Development/other (2.5) (0.1) (0.1) (2.7) (0.4) EPRA earni ning ngs 56.4 9.5 8.9 74.8 61.2

• 1. Excludes leased asset and corresponding lease liability recognised in respect of leased properties under IFRS 16

Debt facilities

32

Faci cility £m £m Dra rawn £m £m Maturi rity Sec Secure red Legal + General1 107 107 2022 Mass Mutual2 100 100 2024 Un Unsecured HSBC/RBS3 350 350 2022 HSBC/RBC/RBS 400 400 2022 Unsecured bond (Unite) 275 275 2028 Unsecured bond (LL) 600 600 2024-29 Tot

• tal

1,832 1,832 Faci cility £m £m Dra rawn £m £m Maturi rity USA USAF Secured bond 775 775 2023-25 Wells Fargo 150 135 2024 Tot

• tal

925 910 LSAV Wells Fargo 250 250 2022 L&G 149 149 2022 Teachers RE 140 140 2027 Tot

• tal

539 539

Co Co-investment vehicles On On-balance sheet

1. To be repaid on 29 July 2020 2. Repaid in full on 20 July 2020 3. Credit approval received for a further £100m extension

Reconciliation of NAV measures

33 Jun 2020 2020 £m £m Jun 2020 2020 p Dec 2019 2019 £m £m Dec ec 20 2019 19 p Net et as asset et val alue repo eporte ted under r IF IFRS RS 3, 3,27 273 822 822 3, 3,072 072 845 845 Mark to market interest rate swaps 25 8 Unamortised swap gain (2) (2) Unamortised fair value of debt recognised on acquisition 30 32 Current/deferred tax (1)

• Real estate transfer taxes

265 280 EPR PRA Net Net Reinstatement Val Value (NRV) 3, 3,590 590 899 899 3, 3,390 390 930 930 Real estate transfer taxes (265) (280) EPRA PRA NAV 3, 3,32 325 833 833 3, 3,110 110 853 853 Intangible assets (20) (23) EPRA PRA Net etTa Tangibl ble As Assets(NTA) 3, 3,30 305 828 828 3, 3,087 087 847 847 Intangible assets 20 23 Mark to market of fixed rate debt (98) (94) Mark to market interest rate swaps (25) (8) Current/deferred tax 1

• EPRA

PRA NNNAV /NetDisposal Va Value (NDV) 3, 3,20 203 803 803 3, 3,008 008 826 826

Secured development and University Partnerships pipeline

Ta Target deli livery Se Secu cured beds To Total tal co comp mple lete ted valu lue (£m) m) To Total tal develo lopment nt co costs sts (£m) Ca Capex x in pe perio iod (£m) m) Ca Capex x remai aini ning (£m) m) Fo Forecas ast t NAV remai aini ning ng (£m) m) Fo Forecas ast t yield ld on co cost st Tr Tradit itio ional naldevelo lopment nt First Way, London 2020 678 132 103 10 22 12 6.0% Artisan Heights, Manchester 2020 603 82 57 12 6 11 7.8% Derby Road, Nottingham1 2023 620 64 48 1 46 16 8.0% Wyvil Road, London1 2023 270 100 80

• 62

21 6.2% Abbey Lane, Edinburgh1 2023 298 33 24 1 23 9 8.3% To Total tal trad aditional development 2,469 411 411 312 312 24 24 159 159 69 69 6.9% Univ iversi sity Partne tnershi ships White Rose View, Leeds 2020 976 122 84 17 8 14 7.4% Middlesex Street, London 2022 913 277 187 57 86 52 6.0% Old BRI, Bristol 2022 416 57 43 3 19 7 6.2% Temple Quarter, Bristol1 2023 596 85 67 1 65 18 6.2% To Total tal Univ iversi sity Partne tnershi ships 2,901 01 541 541 381 381 78 78 178 178 91 91 6.4% To Total tal pi pipeli line ne 5,370 70 952 952 693 693 102 102 337 337 160 160 6.6%

• 1. Subject to planning consent

34