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 H1 2020 H1 2019 FY 2019 • First PBSA provider to forgo summer term rents • Decisive actions have enhanced our reputation with EPRA Earnings £74.8 .8m £61.2m £110.6m Universities, creating new partnership opportunities  EPRA earnings s gro growth dr driven by by Libe Libert rty Livin Living acqu cquis isition, offs ffset EPRA EPS 20.5 .5p 23.2p 39.1p by im by impa pact of f Covi vid-19 19 • EPRA Earnings +22%, EPRA EPS down 12% Dividend per share 0.0 .0p 10.25p 10.25p  Su Succ ccess ssful in inte tegration of f Libe Libert rty Livi Living EPRA NAVps 833p 833p 820p 853p • Secured £15m p.a. of cost synergies from 2021 • Targeting additional synergies Total accounting return (2.3 .3)% 6.3% 11.7%  Gro rowing visi visibil ility ove ver r in inco come fo for r 2020/21 • 97% of Universities to provide in-person teaching Loan to value 1 33% 33% 29% 37% • Reservations at 84% (2019/20: 93%), of which half underpinned by nomination agreements EBIT margin 71.7 .7% 76.0% 71.7% • Targeting 90% occupancy Reservations 2 84% 84% 93% n/a • Anticipate reinstating dividend payments later in the year 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

Performance Highlights Int Interim Re Resu sults Six months ended 30 June 2020

Sector-leading platform  Hig igh-quality, well ll lo loca cated po port rtfolio Customer sati atisfaction an and Uni University enga ngagement • 88% aligned to strongest Universities 100 85 • 4% rise in applications to High-tariff Universities 83 83 82 81 81 80 80 79 79 75 80 69  Tru Trusted pa partner to to Univ iversitie ies 60 • Collected 97% of rent due from Universities in summer term 40 of 2019/20 20 • Reputation enhanced through our response to Covid-19 0 Customer satisfaction Higher Education trust  Be Best st-in in-cla lass ope opera rating plat platfo form 2014 2015 2016 2017 2018 2019 • Flexibility to rapidly adjust sales strategies and reduce costs Source: Unite, TRIM, Redbrick o Shift to target more domestic students and international students already in the UK Unive Un vers rsity ty al align gnment t by by tari ariff group o £12-15m of cost savings identified for 2020 (Unite share) 100% • First student provider to have its Covid secure status 80% accredited by the British Safety Council 43% 41% 50% 52% 57% 60%  £300m pla placing enabl bling continued in inve vestment at t enhanced 40% returns 45% 45% 20% 40% 36% • Pipeline of three schemes for a total development cost of 33% £250m, either contracted or under offer 0% 2016/17 2017/18 2018/19 2019/20 Post pipeline & • Further opportunities to add to University Partnership or disposals Medium High development pipeline Source: Unite, 2020 Times Rankings 5

Encouraging outlook for 2020/21  Un Univers rsities will ill be be ope pen fo for r bu busi siness this this Au Autumn Uni niversity pla lans for or the the 20 2020/21 Aut utumn ter term • 97% will offer face-to-face teaching (Universities UK survey) (% of of ‘Yes’ re resp sponses) ) • Campuses will be open offering a range of social opportunities 100% and student support 80% • Assuming no return to national lockdown 60% 97% 90% 87% 40%  Stu Student dem demand expe xpected to to be be robust 20% • 1% growth in UCAS acceptances as at 18 June deadline 0% In-person teaching In-person social Plans communicated to o Record participation rate for UK 18-year-olds opportunities students Source: Universities UK o YoY reduction in deferrals • Strong UK Postgraduate demand YoY oY cha hange in in ac accep eptances es by y dom omicil ile • Universities being proactive to secure and attract first year (18 18 Jun June deadline) international students, recognising additional risk Change in Cha  Se Seri ries of f Govern rnment su support measu sures announced fo for HE acc cceptances % YoY YoY UK 2,200 0.5% • £2.7bn in tuition fee payments and research funding brought forward to ensure the viability of all Universities EU (2,170) (5.9)% • Government will cover up to 80% of losses from international students Non-EU 5,770 11.6% • Committed to growth in international student numbers Tot otal 5,800 1.2% Source: UCAS 6

Continued structural demand for Higher Education  We exp xpect stro strong stu student dem demand in in 2021/22 Fo Forecast growth in n UK UK 18 18-year-old population an and • Enhanced campus experience number of f UK UK ac accepta tances to unive vers rsity ty 1 000s 1,000 • Significant recovery in international student numbers 800 • Return to growth in the 18-year-old population 529 600 456 893 423 • Rising participation rates as HE increasingly viewed as a 819 235 400 715 220 210 societal right 200 294 236 213 0 2010 2020 2030 2010 2020 2030  An Anticipate co continued flig flight to to qu quali lity by by stud students 18 year-old-population University Acceptances • Government policy focused on quality and value of courses, UK 18 year old Other UK Source: ONS, UCAS, Unite favouring High and Mid-ranked Universities 1. Based on 2019/20 participation rate o Consistent with our strategic positioning So Sourc rces of f de demand an and supp pply (20 2019/2 /20) o Very limited exposure to perceived low value courses 2,000,000  Outlook su supportive of f return to to rental gro growth Intl. Other, 225,000 Live at Home, 392,000 Intl. 1st year, 268,000 1,500,000 • High-quality, affordable accommodation UK PG, 163,000 • High income visibility through multi-year nomination HMO, 855,500 1,000,000 UK agreements (6 year avg. WAULT) Undergraduate, 500,000 1,241,000 • Anticipating a near-term slowdown in supply PBSA, 650,000 • Growing opportunity to capture market share from 855,000 0 Demand Supply beds in Houses of Multiple Occupancy (HMOs) Source: HESA, JLL, Unite 7

2020/21 sales update  Re Reser servations at at 84% 84% for or 202 2020/21 (20 2019/20: : 93% 93%) Cu Current bre reakdown of of re reser servations • Later sales cycle due to some students and Universities delaying (20 2020/21, tot otal gro group) their decision making % of f beds to o Gro ross rental Status St Beds • Targeting 90% occupancy, translating to a 10-20% YoY reduction sel sell inco ncome (£m) in income • Reservations to date show pricing increases vs 2019/20 Nominations, contracted 31,442 42% 218.9 o Guidance includes contingency for price reductions and customer Nominations, unsigned 7,412 10% 50.7 incentives 10,064 14% 61.8  Nom omination re rese servat ations for or 52% 52% of of bed eds (42% contracted) UK direct-let • Universities beginning to allocate students International direct-let 13,713 18% 112.8 • Expect unsigned agreements to complete in coming weeks Tot otal 62,631 84% 444.2 • Some Universities seeking flexibility around start dates Current dir Cu irect-let etre reser servationsby y dom omicile le an and yea year of of st study  Bro road-bas ased dem demand for dire direct-let bed eds (20 2020/21, tot otal gro group) • Healthy demand from UK undergraduate students o Expect to account for 60% of direct-let bookings vs 39% last year Other r • Encouraging reservations from international students 000s UK UK Ch China EU EU Tot otal int ntl. o Half of bookings from 2/3 rd year students First year 3.2 1.0 0.8 0.4 5.4  Hig igher er tha han usu usual risk risk of of can ancel ellations, par articularly for or int international 2 nd & 3 rd year 6.6 3.4 1.5 1.6 13.1 st students Postgraduate 0.3 4.3 0.2 0.5 5.3 • Guidance assumes some churn in bookings • Confirming bookings with students to improve income visibility Tot otal 10.1 8.7 2.5 2.5 23.8 % of f res eservations 42% 36% 11% 11% 100% 8

Successful integration of Liberty Living  Sig Signifi ficant pr progress du duri ring H1 Exp Expected sy synergy rea ealisation £m • Liberty Living city based employees and properties integrated 20 onto the Unite operating platform 15 • Liberty Living head office closed with all support functions integrated 10 • Unite customer offer extended to Liberty Living customers 5 • Integration to conclude by end of September 2020 0 2020 2021 2022  Confident in in co cost st syn synergies of f £15m p. p.a. fr from 2021 Operating expenses Overheads Source: Unite • £5-6m to be realised in 2020 • Opportunities to realise additional cost synergies over time o Reductions in water and electricity consumption o 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 9

Financial Review Int Interim Re Resu sults Six months ended 30 June 2020