UNITE STUDENTS # Home for Success THE UNITE GROUP PLC Annual Report and Accounts 2024 ![img-0.jpeg](img-0.jpeg) ![img-1.jpeg](img-1.jpeg) ![img-2.jpeg](img-2.jpeg) --- ![img-3.jpeg](img-3.jpeg) # Financial highlights Adjusted earnings per share 46.6p (2023: 44.3p) Dividend per share 37.3p (2023: 35.4p) EPRA NTA per share 972p (2023: 920p) IFRS diluted earnings per share 96.1p (2023: 24.6p) Total accounting return 9.6% (2023: 2.9%) IFRS NAV per share 982p (2023: 931p) # Operational highlights Record customer satisfaction score of +50 Record Higher Education trust score of +37 Opened our lowest embodied carbon new build Invested £32m refurbishing 11 properties Launch of a new student app and website Awarded Investors in People gold Our reporting suite Sustainability Report https://www.unitegroup.com/sustainability Investor site https://www.unitegroup.com/investors --- STRATEGIC REPORT # Building a brighter future We create communities where young people thrive. ## STRATEGIC REPORT 04 Who we are 06 Market overview 10 Business model 14 Investment case 16 Key performance indicators 18 Chief Executive's review 24 Performance review 52 Risk management ## CORPORATE GOVERNANCE 74 Chair's introduction to governance 76 Board of Directors 80 Board statements 83 Board leadership and purpose 88 Division of responsibilities 90 Section 172 93 Board activities 98 Nomination Committee 101 Audit & Risk Committee 106 Sustainability Committee 108 Health & Safety Committee 112 Remuneration Committee 138 Directors' Report 141 Statement of Directors' responsibilities ## FINANCIAL STATEMENTS 144 Independent auditor's report 153 Consolidated income statement 153 Consolidated statement of comprehensive income 154 Consolidated balance sheet 155 Company balance sheet 156 Consolidated statement of changes in shareholders' equity 157 Company statement of changes in shareholders' equity 157 Consolidated statement of cash flows 158 Notes to the financial statements 213 Financial record ## OTHER INFORMATION 216 Glossary Cover Company information THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT ![img-4.jpeg](img-4.jpeg) ![img-5.jpeg](img-5.jpeg) ![img-6.jpeg](img-6.jpeg) # Strategic report THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-7.jpeg](img-7.jpeg) # STRATEGIC REPORT 04 Who we are 06 Market overview 10 Business model 14 Investment case 16 Key performance indicators 18 Chief Executive's review 24 Performance review 52 Risk management ![img-8.jpeg](img-8.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 03 --- STRATEGIC REPORT # WHO WE ARE Our purpose: # Home for Success We believe in helping young people get the best out of life. The place where they study and live together should be a home where they can grow, belong and be themselves. As a trusted member of the Higher Education (HE) community, we support the universities we partner with to build a brighter future for students everywhere. We offer original insights, champion student wellbeing and raise standards together. We're passionate about making a positive and lasting impact on our neighbourhoods, society and the planet. Always working for the long term, we're proud to contribute to local housing needs. ![img-9.jpeg](img-9.jpeg) 2024 Ranking by number of beds THE UNITE GROUP PLC Annual Report and Accounts 2024 GO TO FIND OUT MORE ABOUT OUR STRATEGY READ THE Q&A WITH DIRECTOR OF STRATEGY, TOM ELLIS ON PAGE 39. --- Strategic objectives: focusing on customers, our people and shareholders. ![img-10.jpeg](img-10.jpeg) ## Great Place to Live Net Promoter Score Consistent performance will come from high levels of student and university satisfaction and advocacy. High occupancy Activity driving preference for our brand and buildings across all years of study will help us to consistently outperform the competition. Partnership Positive customer sentiment builds university partner trust, laying the foundations for the joint ventures that support our long-term growth. ![img-11.jpeg](img-11.jpeg) ## Great Place to Work Belonging Building togetherness around our culture boosts engagement and performance of our teams, as well as higher customer care. Growth With everyone clear on their performance and aligned to clear goals and with the right support, we can grow together. Impact Focusing on making a difference by staying curious, flexible and true to our values, we can make a positive mark on the future. ![img-12.jpeg](img-12.jpeg) ## Great Place to Invest Returns The strength and consistency of our financial performance is a key driver of returns for our investors, helping to sustainably grow value. University alignment A portfolio aligned to the strongest universities with the best prospects for student recruitment and the ability to support sustainable rental growth. Capital discipline Focus on maintaining a strong balance sheet through disciplined capital allocation. ## Guided by our values ![img-13.jpeg](img-13.jpeg) Challenge the Ordinary ![img-14.jpeg](img-14.jpeg) Lead with Heart ![img-15.jpeg](img-15.jpeg) Unite as One ![img-16.jpeg](img-16.jpeg) Stay on Point THE UNITE GROUP PLC Annual Report and Accounts 2024 05 --- STRATEGIC REPORT # MARKET OVERVIEW # Market trends The outlook for our business is influenced by structural trends in Higher Education and student accommodation, which determine the size of our market. Cyclical factors also have an impact on the economic conditions we face, the cost and availability of funding for the business and the level of investment in student accommodation. Together these factors influence our strategy and the long-term growth prospects of the Group. ## STRUCTURAL TRENDS Demand for purpose-built student accommodation (PBSA) is underpinned by a range of structural drivers, which support growth in student numbers for UK Higher Education, explored in more detail in the following tables. ## 1 Growing demand for Higher Education ![img-17.jpeg](img-17.jpeg) A record number of UK 18-year-olds started university in September 2024, reflecting the continued value young adults place on a higher level of education and the life experience and opportunities it offers. The number of 18-year-olds will increase through demographic growth and this supports continued growth in demand for university places to 2030. The outlook for international recruitment is improving following a c.15% reduction in visas issued to international students in 2024. The new government is more supportive of both the Higher Education sector and international recruitment, supporting future growth in student numbers. Other leading HE destinations, including Canada and Australia, are introducing caps to reduce the number of international students, which we expect to increase the attractiveness of UK universities. ## WHAT IT MEANS FOR UNITE STUDENTS - Increased demand for PBSA from students and university partners. - Opportunities for new development in cities benefiting from the strongest growth in student numbers. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 2 Government more supportive of Higher Education ![img-18.jpeg](img-18.jpeg) UK Higher Education policy recognises the global standing of the UK's universities who attract students from all over the world, conduct vital research, and contribute £42 billion to the UK economy and benefits our society. The Government has announced a 3% increase to tuition fees for the 2025/26 academic year, the first increase since 2017/18. This increase will help universities balance budgets in the face of rising national insurance contributions for staff and other costs. With universities increasingly focused on efficiency and academic delivery, this creates increased demand for third-party accommodation through nomination agreements and strategic partnerships. The Migration Advisory Committee review of the Graduate Route recommended no further changes to student visas, which the Government has accepted, and we do not expect any further tightening of rules. We expect a new International Education Strategy to be introduced in 2025. ## WHAT IT MEANS FOR UNITE STUDENTS - Potential for stronger growth in student numbers for those universities and cities delivering high-quality teaching, strong employment prospects for graduates and internationally recognised research. - We will continue to grow our alignment to high- and mid-ranked universities which have the strongest outlook for student recruitment and demand for accommodation. - Opportunities for strategic university partnerships for on- and off-campus development, as well as the transfer of existing accommodation stock, requiring investment and repositioning. # 3 Focus on quality, sustainable housing ![img-19.jpeg](img-19.jpeg) The Government has a target to deliver 1.5 million new homes during this Parliament, built to the highest sustainability standards, and PBSA can make a contribution to this target. They will also strengthen renters' rights and reform and streamline planning regulation, with increased funding for local authorities, which could reduce the time to deliver new housing, including PBSA. The Renters' Rights Bill will increase tenants' rights and aims to improve the standard of privately rented housing. The draft Bill excludes PBSA from almost all of the new protections. The Building Safety Act (BSA), which addresses the safety of new residential accommodation, came into effect in 2024, adding three approval gateways to the design, construction and occupation of new high-rise residential buildings. This will add around six months to delivery timelines. The UK's commitment to achieve net zero carbon by 2050 will require significant reductions in energy use from domestic properties. This includes potentially increasing Minimum Energy Efficiency Standards (MEES), requiring rental properties to achieve EPC ratings of at least B by 2030. ## WHAT IT MEANS FOR UNITE STUDENTS - Growing regulation and taxation of the houses of multiple occupation (HMO) sector may result in more private landlords seeking to exit, creating the opportunity for the PBSA sector to capture a growing share of students requiring accommodation. - Increasing likelihood of a green premium or brown discount for PBSA assets as sustainability considerations grow in importance for stakeholders. - The growing number of long-term renters in the UK supports the growth of the build-to-rent (BTR) sector. We believe there is opportunity to grow our platform by catering to the growing number of young professionals living in major UK cities. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # MARKET OVERVIEW continued ## CURRENT TRENDS Economic and financial conditions have remained challenging over the past year. Demand for Higher Education and student accommodation has historically proven to be non-current and the business able to mitigate the impact of rising costs through rental growth and its risk management approach. ## 4 Economic outlook ![img-20.jpeg](img-20.jpeg) Inflation has returned to close to target levels and interest rates have begun to gradually reduce. The outlook is encouraging with inflation trending towards central bank targets, interest rates reducing and growth generally proving resilient. Unemployment increased modestly late in 2024, with weaker employment opportunities potentially encouraging more people to study at university. ## WHAT IT MEANS FOR UNITE STUDENTS - Lower funding costs increase the attractiveness of real estate investment and may result in increased PBSA transaction volumes and valuations. - Slowing inflation will be reflected in lower annual uplifts in multi-year nomination agreements and a moderating rate of overall rent and cost growth. - We will monitor the affordability of accommodation to ensure we continue to offer value-for-money. - We expect increases in operating costs and overheads to moderate in 2025, supporting a c.50bps increase in EBIT margin. ## 5 University recruitment ![img-21.jpeg](img-21.jpeg) Universities have responded to lower international demand during 2024 by increasing recruitment of UK students. This is most stark at higher tariff universities where UCAS acceptances increased by 8% for the 2024/25 academic year, compared to reductions of 1% and 4% for medium and low tariff providers. This change in student recruitment translated to a normalisation in demand for our accommodation with occupancy of 97.5% representing a return to pre-pandemic levels. ## WHAT IT MEANS FOR UNITE STUDENTS - We align our portfolio to the strongest universities with the best prospects for student recruitment and demand for accommodation. - Shifting demand underlines the value of nomination agreements and relationships with universities. - Universities needing new accommodation to grow are seeking to partner with the private sector through nomination agreements and joint ventures. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # 6 Competing supply ![img-22.jpeg](img-22.jpeg) There has been a steady slowdown in new supply of PBSA from a peak of 30,000 to 35,000 beds p.a. in 2017-2019 to around 11,000 beds delivered in 2024. This reflects delays to development deliveries resulting from planning backlogs as well as more restrictive funding conditions for developers. Universities are focusing on their academic estates and deferring investment in the face of tighter funding. To meet their accommodation guarantees to UK first year and international students, universities need new accommodation to replace obsolete stock and grow their student numbers. They increasingly see availability of accommodation as a barrier to growth. The stock of student housing in the HMO sector is also expected to reduce as a result of increasing regulation for private landlords. This includes increasing MEES, which will potentially require rental properties to achieve EPC ratings of at least C by 2030, and proposed changes in regulation through the Renters' Rights Bill. Rising mortgage interest costs, which are no longer fully deductible tax expenses, together with rising stamp duty land tax and capital gains taxes, will also reduce financial returns for landlords. This will result in additional costs for HMO landlords and may see many choose to exit the market, which we expect to be reflected in higher rents in HMOs. ## WHAT IT MEANS FOR UNITE STUDENTS - Tight supply conditions and healthy student demand are supportive of 97-98% occupancy for the 2025/26 academic year. - Universities are increasingly looking to partners, including Unite Students, to meet their accommodation needs. - Lower supply of HMO properties and increasing costs for tenants in the HMO sector create an opportunity to retain more non-first year customers who might otherwise move into the HMO sector. # 7 Development viability ![img-23.jpeg](img-23.jpeg) Construction costs have risen significantly over the last five years due to higher material costs, rising energy costs and availability of skilled labour. We are seeing a moderation in price rises as supply chains stabilise coupled with a broader slowdown in construction. The rise in development costs has created viability challenges for new PBSA development in a number of our markets, where the minimum rents required to justify new development (c.£200 per week) are unaffordable relative to alternative options in the local market. The Building Safety Act has introduced gateways prior to the start of construction and occupation of high-risk buildings; these gateways are expected to add around six months to development programmes. These factors are contributing to lower volumes of new supply and a reduction in land values. ## WHAT IT MEANS FOR UNITE STUDENTS - We are developing in the strongest markets with the greatest supply/demand imbalance. - We are mitigating cost pressures to protect development returns through reduction in land values, build costs efficiencies and potentially increased rents. - We are managing the impact of the Building Safety Act on our pipeline by building more time into our development programmes. 09 --- STRATEGIC REPORT # BUSINESS MODEL # How we do it ## Our best-in-class operating platform ### Serve We provide a Home for Success for the students who live with us, where they can study, live together, grow, belong and be themselves. Our best-in-class welfare support and colleagues working in our properties are dedicated to delivering on this promise. ### Partner We partner with leading UK universities through nomination agreements. Partnerships enable us to support universities in delivering their accommodation guarantee to first year and international students and provide a significant level of income visibility each year. We are seeing increasing demand from universities for beds under nomination agreements and we are also progressing strategic partnership opportunities for on-campus development or stock transfer. ### Improve We drive superior rental growth and improve the environmental performance of our buildings through targeted refurbishments, which enhance the customer experience and support our value-for-money proposition. We have a range of refurbishment options available, which are tailored for each property according to the needs of the relevant customer segment and demand levels within each city. ### Manage We manage co-investment vehicles, including USAF and LSAV, which provide recurring fee income and access to additional capital. We adopt a consistent sales and operating model adopted across our entire portfolio, regardless of fund ownership. ## Continual portfolio enhancement ### Develop We develop high-quality PBSA in the strongest university markets where the supply/demand imbalance is most acute. We are focused on delivering our secured pipeline and adding new schemes in the 8-10 strongest markets. We aim to invest where our expertise and university relationships give us a significant edge in delivering schemes. ### Acquire We appraise and selectively acquire single assets and portfolios which enhance portfolio quality, where there is clear alignment to the strongest universities. Assets with refurbishment potential offer the opportunity to enhance returns through our asset management initiatives. ### Recycle We aim to dispose of £150-200m p.a. of weaker assets to improve the quality of our portfolio, increase alignment to the strongest universities and strengthen the future rental growth outlook. This provides funding to invest in new development opportunities and make improvements to our existing portfolio, while maintaining the strength of our balance sheet. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Creating value for our stakeholders ## Students ### Key issues - Value-for-money - Customer service - Safety and welfare support ### How we engage Our frontline property teams engage with students on a day-to-day basis, supplemented by peer-to-peer engagement and social activities provided by our resident ambassadors. We partner with Endsleigh Insurance to provide 24/7 access to counsellors and other support services. We also engage with students using our upgraded MyUnite app and social media channels, including pre-arrival support and networking opportunities. Throughout their stay we promote campaigns, such as Personal Safety Week and Winter Wellbeing, and we signpost to our Support for You web page. This is complemented by our customer research programme which includes surveys on specific issues. ### Value created in 2024 - Provided access to a 24/7 student wellbeing helpline and digital therapy services. - Upgraded 11 buildings, including new bedrooms, kitchens and amenity spaces. - Supported the award of accommodation scholarships to 95 students through the Unite Foundation. - Launched our new student app and website to further enhance customer service. - Research with the Social Market Foundation on care leavers. ### Priorities for 2025 Upgrades to bedrooms, kitchens and amenity spaces in our new developments and refurbishment projects. Improved capture of additional needs prior to arrival to respond to the differing needs of under-represented students, and those with additional challenges relating to the transition into student accommodation. Investment in our technology platform to deliver an improved end-to-end experience for students from booking, through their time with us and ultimately when they leave. ## Our people ### Key issues - Learning and development - Diversity, equity and inclusion - Health, safety and wellbeing - Fair pay and reward ### How we engage We hosted quarterly Culture Matters forums and Unite Live sessions with the Chief Executive and Executive team, fostering open communication and transparency. We conducted the Have Your Say survey with 84% participation, gathering insights to drive continuous improvement. We co-created new values and behaviours with our people, to better reflect who we are and the culture we're striving to create. We hosted our senior leaders at two conferences, bringing them together to share our vision for the business and to better connect as leaders. ### Value created in 2024 - Delivered an average pay increase of 8.8%, including a 10% uplift for over 70% of employees. - Employee attrition decreased to 25%, a 4-point improvement on 2023. - Launched My Impact, a new performance enablement framework. - Achieved our highest engagement score in two years of 74, up by 4 points on 2023. - Delivered our first-ever culture audit, identifying areas to keep, change, and add. - Advanced diversity, equity, and inclusion through impactful networks and policies supporting menopause, disability and neurodiversity. - The Academy provided tailored learning experiences, including an 18-month programme for general managers. ### Priorities for 2025 We will launch an integrated online platform to support performance, learning, and goal setting through My Impact. We will roll out refreshed values and behaviours across the business. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # BUSINESS MODEL continued ## Stakeholder value ## Universities ### Key issues - Student experience and welfare - Operational performance - Health and safety ### How we engage Through our Higher Education Engagement team, we meet regularly with leaders across the UK university sector. We engage at various levels in institutions ranging from discussions on strategic planning to day-to-day operational requirements. In addition, we engage actively in the wider Higher Education sector, presenting at conferences and contributing to Higher Education research. We continue to support the Living Black at University Commission, to help black students more easily acclimatise to life at university. ### Value created in 2024 - Provided 38,000 beds to universities for the 2024/25 academic year. - Agreed a new joint venture with Newcastle University to redevelop their Castle Leazes site. - Our Support to Stay framework aims to join up wellbeing services with university partners. ### Priorities for 2025 We will continue to support the growth ambitions of our university partners through nomination agreements and opportunities to deepen strategic partnerships. We expect to secure our second university joint venture in the next three months; continuing our research programme in partnership with universities to better understand each cohort of students. ## Communities ### Key issues - Trust and transparency - Housing availability - Local investment and job creation ### How we engage The availability of housing is a key issue for our local communities. We are focused on supporting the growth of our university partners through the delivery of new, high-quality and affordable student homes, which increase housing supply and help free up more traditional housing for families and young professionals. We also engage actively with local stakeholders for our development projects to ensure the design of our buildings, public spaces and community facilities meet their needs. Our Positive Impact programme encourages employee participation in local community projects, which can earn awards based on delivering measurable impact. ### Value created in 2024 - Delivered our most sustainable development to date. - Employment for over 1,500 people in our local communities. - Invested £10.2 million in initiatives to reduce our environmental impact. - 3,842 hours of employee volunteering in the year, an increase of 9% compared to 2023. - 47 Silver and Gold Positive Impact awards for community projects. ### Priorities for 2025 We aim to increase community engagement through our Positive Impact programme, via initiatives delivered by local teams in our properties and our head office colleagues. In addition, we will continue to engage with local authorities and local communities around new development activity, to explain how the community benefits from creating new, high-quality student accommodation. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # Suppliers ## Key issues - Quality and sustainable solutions - Performance and efficiency - Risk management ## How we engage We expanded coverage of our standardised procurement approach in both new and existing parts of our supply chain, focused on facilities management, estate management, technology and professional services. This approach ensures our buildings meet existing and emerging safety regulations, deliver our sustainability goals, and meet customers' needs. As a key stakeholder group in the successful delivery of our strategic objectives, communicating with and listening to our key suppliers and partners is invaluable. We have continuously sought feedback as part of continuous improvement based on a combination of 1-1 meetings, our annual supplier conference, and supply chain focus groups. ## Value created in 2024 - Spent c.£260 million with suppliers through our procurement function. - Delivered higher quality service from suppliers, with a specific focus on specification and services during the summer maintenance period, supporting improved NPS scores from customers. - Reduced risk through an enhanced supplier vetting process and increased attention to managing supplier quality and performance. ## Priorities for 2025 We will further expand our procurement processes into capital planning and asset management, alongside other property maintenance activities. We remain focused on ethical and sustainable procurement throughout our supply chain, not just those we work with directly. # Investors ## Key issues - Financial performance - Strategic direction - Sustainability and risk management ## How we engage We engaged regularly with investors around our financial results as well as through ad hoc events, such as property tours, conferences and meetings. Key themes for engagement during the year were, changing university recruitment and international student numbers, policy changes under the new government and the supply of new student accommodation. These discussions informed our decision to raise capital to invest in new accommodation and acquire existing assets, with value-add potential, from USAF. We engaged with selected investors immediately prior to announcing the capital raise in July to discuss the proposed use of proceeds and gauge the level of shareholder support for the raise. In November, the Executive team and other senior leaders hosted a property tour in London, providing updates on student demand, customer trends and the outlook for new supply. ## Value created in 2024 - Delivered 97.5% occupancy and rental growth of 8.2%. - 5% growth in adjusted EPS. - Total accounting return of 9.6%. - Full year dividend per share of 37.3p. ## Priorities for 2025 Delivering growth in EPS, through rental growth and improvement in operating margins, while ensuring a robust capital structure. We aim to achieve this through a strong sales performance for 2025/26, successful delivery of two new developments and ongoing cost discipline and management of interest rate risk. --- STRATEGIC REPORT # INVESTMENT CASE # Sustainable Growth We are the UK's largest owner, manager and developer of purpose-built student accommodation. ![img-24.jpeg](img-24.jpeg) ## 1 Structurally growing sector **Demographic growth** The UK's 18-year-old population is set to grow by 11% by 2030, supporting demand for an additional c.100k undergraduate places at current participation rates. **Rising Higher Education participation** 2024/25 saw a record number of UK 18-year-olds starting university, demonstrating young people's recognition of the opportunities and life experience that university provides. Graduates earn £100,000 more over their lifetime than non-graduates, underlining the continued value of university education. **Growing attractiveness of UK Higher Education** The new government is more supportive of international students and recognises the value they bring, both to the Higher Education sector and society more broadly. This more welcoming tone contrasts with the introduction of caps on student numbers in Australia and Canada, two of the UK's leading competitors for international students. **18-year-old participation rate in 2024/25** 36.2% ## 2 High-quality portfolio **Aligned to the strongest universities** Our portfolio is increasingly focused on the UK's leading universities, where we see the strongest prospects for student number growth, through our new investment activity and disciplined capital recycling. **Value-for-money** We offer students a high-quality and value-for-money living experience, with support on hand if it is needed. Our pricing is inclusive of utilities, Wi-Fi, contents insurance and maintenance. **Investing to enhance our operational estate** There is a multi-year opportunity to enhance rents and reduce operational costs through refurbishment projects and energy efficiency measures which improve the student experience and reduce resource use in our buildings. **Share of the rental portfolio by value in Russell Group cities** 93% THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # 3 Best-in-class operating platform | Over 60 university partnerships We are the partner of choice for a large number of the UK's leading universities, reflecting our track record, focus on student support and our high-quality, affordable products and services. | Passionate frontline teams Service excellence is delivered by 1,500 passionate colleagues working in our properties. This brings together our experience of over 30 years of operating in the student accommodation sector. | Sector-leading operating margins We drive cost efficiencies through our scale using our technology platform. Management fees from joint ventures and funds also cover two-thirds of our annual overheads. | Customer NPS +50 | | --- | --- | --- | --- | # 4 High visibility over returns | Sustainable rental growth A track record of real terms rental growth driven by student demand and contracted increases under our multi-year university nomination agreements, supported by ongoing investment in our estate. | Growing dividends As a real estate investment trust (REIT), we target sustainable growth in dividends for our investors. We distribute 80% of our adjusted earnings each year as dividends. | Attractive total returns of c.10% p.a. before yield movement Achieved through recurring earnings, rental growth and development profits. | Resilient and flexible balance sheet We maintain a strong balance sheet with robust credit metrics. We nurture strong relationships with our shareholders, co-investment partners and debt providers to ensure continued access to capital. | EPS growth over the past 10 years 10.5% p.a. | | --- | --- | --- | --- | --- | # 5 Substantial growth opportunities | Market share gains from the HMO sector One million students live in houses of multiple occupancy, providing a significant opportunity to retain and attract more non-first year students as the availability of HMOs reduces. | Development of £200–300m p.a. Proven ability to drive earnings and development profits through our in-house development team. Investment is focused on the strongest eight to ten markets in the UK. | New university partnerships Building on our partnership with Newcastle University to deliver 2,000 new beds, we see further opportunities for new developments on- and off-campus and joint ventures for the transfer of universities' existing accommodation stock. | Emerging young professional market Significant potential to expand our platform to cater for the growing number of professional renters living in major student cities. | Full-time students living in university-owned accommodation or HMOs 1.3m | | --- | --- | --- | --- | --- | # 6 Leadership in sustainability | Net zero carbon Becoming a net zero carbon business for both our operations and developments by 2030, based on SBTi-validated targets, as well as reducing our development emissions by 48%. | Energy-efficient homes 91.7% of our portfolio is EPC rated A or B with an ambition to reach 100%. We invest in our buildings to reduce utilities usage and carbon impact which also deliver cost savings. | 1% of adjusted earnings We have donated 1.2% of adjusted earnings to social initiatives, which aligns with our purpose, Home for Success, and our efforts to widen participation in Higher Education. | Unite Foundation The Unite Foundation provides scholarships for estranged and care-experienced students throughout the course of their studies by addressing housing fragility. | Target reduction in Scope 1 & 2 carbon emissions by 2030 56% | | --- | --- | --- | --- | --- | --- STRATEGIC REPORT # KEY PERFORMANCE INDICATORS ## Financial KPIs ![img-25.jpeg](img-25.jpeg) Adjusted earnings per share¹ (p) 46.6p ![img-26.jpeg](img-26.jpeg) IFRS diluted earnings per share 96.1p ![img-27.jpeg](img-27.jpeg) Total accounting return¹ 9.6% ![img-28.jpeg](img-28.jpeg) Dividend per share 37.3p Link to remuneration Bonus and long-term incentive plan (LTIP). **Measure** Adjusted earnings per share measures the recurring profit delivered by operating activities on a per share basis. **Performance in 2024** The business delivered a strong performance in 2024, with adjusted earnings of 46.6p, up 5% year-on-year. This reflects strong rental growth of 8.2% for the 2024/25 academic year and the resilience of our platform as international student recruitment was disrupted by policy changes. **Priorities going forward** Deliver sustainable growth in adjusted EPS through 97-98% occupancy and rental growth for the 2025/26 academic year and continued cost discipline. Link to remuneration Bonus and LTIP (indirectly). **Measure** IFRS diluted earnings per share measures IFRS earnings on a per share basis taking account of dilutive potential ordinary shares – share options. **Performance in 2024** The increase in EPS reflects an increase in the value of the Unite Group's property portfolio, profits from our development pipeline and earnings from the operational portfolio, partially offset by additional provisions for cladding remediation projects. **Priorities going forward** Grow EPS through rental growth, asset management and development profits, while continuing to maintain the portfolio and remedy fire safety defects. Link to remuneration Bonus and LTIP. **Measure** Total accounting return measures the NTA in EPRA NTA per share plus dividends paid as a percentage of opening EPRA NTA per share. **Performance in 2024** Dividends paid of 36.0p together with growth in NTA which drove our TAR performance. **Priorities going forward** Deliver attractive total accounting returns over the medium term through dividends and NTA growth prior to any yield movement. Link to remuneration Bonus and LTIP. **Measure** The amount of annual earnings distributed to shareholders. **Performance in 2024** The total final dividend for 2024 is proposed to be 37.3p representing 80% of final adjusted EPS. The dividend also meets our PID requirement to distribute 80% of relevant earnings. **Priorities going forward** Continue to meet our PID requirement of distributing 80% of relevant earnings as dividends. ¹ The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). The Unite Group uses Alternative Performance Measures (APMs) which are not defined or specified under IFRS. These APMs, which are not considered to be a substitute for IFRS measures, provide additional helpful information and are based on European Public Real Estate Association (EPRA) best practice recommendations. The metrics are also used internally to measure and manage the business and to align to the performance-related conditions for Directors' remuneration. See the glossary for definitions and note 8 for calculations and reconciliations. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Operational KPIs THE UNITE GROUP PLC Annual Report and Accounts 2024 Safety (number of accidents) 5 ![img-29.jpeg](img-29.jpeg) Link to remuneration Taken into consideration. Measure The number of RIDDOR reportable accidents in operations each year, acting as an indicator of health and safety management. Performance in 2024 There were 5 operational RIDDORs with an accident frequency of 0.13. No significant trends in terms of causation were identified. Priorities going forward With an increase in RIDDORs compared with 2023, attention will focus on the root cause analysis of accidents and improving our safety culture. A refresh of our safety management system will ensure colleagues have the tools to work effectively and safely. Employee engagement 74 ![img-30.jpeg](img-30.jpeg) Link to remuneration Bonus. Measure Independent, anonymous surveys are undertaken by an external provider amongst our employees to gain regular and insightful feedback on how they feel and how we can improve. Performance in 2024 Employee engagement for 2024 was 74, a 4-point improvement on 2023, and sees a return to pre-pandemic levels. The score reflects the support we have given through the cost-of-living pressures. Priorities going forward Embedding our new people-focused strategic objective – Great Place to Work – building togetherness around our culture. Customer satisfaction +50 ![img-31.jpeg](img-31.jpeg) Link to remuneration Bonus. Measure Customer Net Promotor Score (NPS) provides a commercial, customer experience measure, based on an annual external check-in survey. Performance in 2024 Highest score ever for the 2024 student arrival check-in at 50; 8 points higher than 2023. This demonstrates the success of our CARE customer service model launched in 2023. Priorities going forward Continue with student support and maintenance activities to achieve at least this score next year; we will also be focusing our attention on other surveys throughout the academic year. Higher Education trust +37 ![img-32.jpeg](img-32.jpeg) Link to remuneration Bonus. Measure The Higher Education (HE) NPS provides a measure of how we have met the needs of our HE partners and their perception of Unite Students. Performance in 2024 The 5-point increase this year is another great build on our 2023 performance and is a record score for us. Our local teams have continued to work hard with universities, with proactive and collaborative partnering. Priorities going forward Continue to build our reputation within the HE community with research and thought leadership, with an emphasis on our social impact on students and universities. --- STRATEGIC REPORT # CHIEF EXECUTIVE'S REVIEW # Continuing to grow The business has performed strongly in 2024, delivering continued growth in earnings and dividends. Adjusted earnings £213.8m (2023: £184.3m) Dividend per share 37.3p (2023: 35.4p) Adjusted earnings per share 46.6p (2023: 44.3p) This reflects the strength of our best-in-class operating platform, the commitment of our teams and the ongoing appeal of our value-for-money proposition. Our affordable pricing, UK customer focus and strength of relationships with universities are key differentiators, enabling us to significantly outperform the sector in more competitive environment. We operate in a structurally growing sector, bolstered by demographic growth and the attractiveness of the UK's Higher Education sector to domestic and international students. The shortage of accommodation to meet this demand supports sustainable long-term rental growth and our track record and reputation in the sector create compelling investment opportunities for the business. # GROWING EARNINGS AND DIVIDEND A strong lettings performance for the 2023/24 and 2024/25 academic years supported growth in adjusted earnings to £213.8 million and adjusted EPS of 46.6p, up 16% and 5% respectively year-on-year. The growth in adjusted EPS also reflects the increased share count following our capital raise in July 2024. IFRS profit attributable to owners of the Company of £441.9 million and diluted EPS of 96.1p (2023: £102.5 million and 24.6p) also reflects the valuation increase of our property portfolio, driven primarily by rental growth. We have proposed a final dividend of 24.9p which, if approved, totals 37.3p for the full year, representing a payout ratio of 80% of adjusted EPS and a year-on-year increase of 5%. Total accounting returns for the year were 9.6%, reflecting dividends paid in the year and 6% growth in EPRA NTA per share to 972p, our capital raise in the year, our net debt:EBITDA and LTV ratios reduced to 5.5x and 24% respectively, providing the funding capacity to invest for future growth. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-33.jpeg](img-33.jpeg) "The business performed strongly in 2024 and demonstrated resilience in a challenging market. We continue to deliver growth in our earnings over the year and our record development pipeline supports this into the medium term." THE UNITE GROUP PLC Annual Report and Accounts 2024 19 --- STRATEGIC REPORT # CHIEF EXECUTIVE'S REVIEW continued Our key financial performance indicators are set out below: | Financial highlights^{1} | 2024 | 2023 | 2022 | | --- | --- | --- | --- | | Adjusted earnings | £213.8m | £184.3m | £163.4m | | Adjusted EPS | 46.6p | 44.3p | 40.9p | | IFRS profit | £441.9m | £102.5m | £350.5m | | IFRS diluted EPS | 96.1p | 24.6p | 87.6p | | Dividend per share | 37.3p | 35.4p | 32.7p | | Total accounting return | 9.6% | 2.9% | 8.1% | | EPRA NTA per share | 972p | 920p | 927p | | IFRS net assets per share | 982p | 931p | 944p | | Loan to value | 24% | 28% | 31% | 1. See glossary for definitions and note 7 for alternative performance measure calculations and reconciliations. A reconciliation of profit before tax to EPRA earnings and adjusted earnings is set out in note 7 of the financial statements. ## ENCOURAGING OUTLOOK FOR 2025/26 We continue to see strong demand from students and universities for our well located, value-for-money student accommodation. We observed a normalisation in leasing trends over the course of 2024, which we expect to continue for the 2025/26 sales cycle with more bookings made later in the cycle. We have seen strong demand from universities for the coming year, as they look to secure accommodation to meet student demand, resulting in nomination agreements 57% of beds for 2025/26. These agreements deepen our relationships with universities and underpin occupancy each year, providing income security at rental levels comparable with direct-let sales. International student demand is improving for 2025 after the disruption created by changes to visa policy in early 2024. Visas granted to students were down 14% in 2024, as a result of this policy change and uncertainty created by the review of post-study visa policy ahead of the UK general election. The new government has been vocal in its support of international students coming to the UK, recognising the value they bring to the UK and its universities and we are not expecting any further visa changes in the near term. Recruitment data is encouraging with indications of a 14% increase in the intake for January 2025 and a 3% increase in international applicants for the 2025/26 academic year, with 9% growth from China. Across the Group's entire property portfolio, 70% of rooms are now sold for the 2025/26 academic year (2024/25: 79%, in-line with our expectations for a later sales cycle. We remain on track to deliver 97-98% occupancy and rental growth of 4-5% for the 2025/26 academic year. ## CONSTRAINED SUPPLY OF STUDENT HOUSING Many university cities are facing housing shortages, and our investment activity is focused on those markets with the most acute need. Over half of students who need term-time accommodation live in HMOs where many private landlords are choosing to leave the sector due to rising mortgage costs and increasing regulation. In some markets, delivery of build-to-rent accommodation is partially mitigating reduced availability of HMO stock, albeit at higher price points. New supply of PBSA is also down 60% on pre-pandemic levels, reflecting viability challenges created by higher costs of construction and funding as well as planning backlogs and time required to secure Building Safety Act approvals. Weekly rents now need to be at least £200 for new PBSA development outside of London to be viable, meaning there is little prospect of new supply in many markets. We expect obsolescence of older university accommodation to further impact supply, with 5,000-10,000 beds being removed from the market each year due to building age and the need to operate buildings more sustainably. The combination of these factors has significantly increased demand for our accommodation in many cities. Our strong, established relationships with universities position us as a long-term partner to help solve their housing needs. The Government has also set ambitious targets for new housing, and we will play our part in delivering new student accommodation which frees up local housing for families. ## DELIVERING OUR STRATEGY Our purpose is to deliver a Home for Success, creating communities where young people thrive. Our strategy is focused on three key objectives to deliver for our key stakeholders: - Great Place to Live - Creating places to live, places that our customers can call home while they stay with us - Great Place to Work - Creating the platform for our people to do their best work, experience the career journey of a lifetime and achieve extraordinary things together - Great Place to Invest - Delivering long-term growth for our investors as a sustainable and resilient business. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-34.jpeg](img-34.jpeg) # Q&A with Shauna Campbell, Group Commercial Director # Great Place to Invest Q: WHAT HAVE BEEN THE BIGGEST HIGHLIGHTS FOR THE COMMERCIAL TEAM OVER THE PAST 12 MONTHS? A: Our team successfully launched a new resident app and website, showcasing life as a Unite Students resident. This boosted student engagement and strengthened our digital presence for future growth. Our partnership with Parklife Festival raised brand awareness, while our award-winning resident retention campaign kicked off the annual sales cycle. Q: HOW PLEASED ARE YOU WITH UNITE STUDENTS' PERFORMANCE AND WHAT HAVE BEEN THE MAJOR EXTERNAL FACTORS? A: I am thrilled with our ongoing commercial success. For the third consecutive year, the team has delivered market-leading results, driven by both strong occupancy and rental growth. Our strategic locations and strong university partnerships play a key role in driving demand. We've focused on attracting second- and third-year UK students while remaining mindful of cost-of-living challenges. To address this, we offer a range of pricing options and products tailored to meet the needs of our residents. Q: HOW IS THIS YEAR'S PERFORMANCE SETTING THE COMPANY UP FOR THE FUTURE? A: The performance over the past two years, along with this year's achievements, have been crucial in positioning the Company for future success. Our focus has been on establishing the right foundations, platforms, and processes to meet our objectives. We've delivered strong, sustainable rental income, backed by a growing sector and partnerships with leading universities. Our ongoing investment in the operating platform will further enable us to ensure we remain customer focused. "For the third consecutive year, the team has delivered market-leading results, driven by both strong occupancy and rental growth." Q: CAN YOU DETAIL SOME OF THE KEY COMMERCIAL INITIATIVES FROM 2024? A: We are advancing the next phases of our technology investment, which includes further app and website releases, enhancing our digital marketing, customer relationship management capabilities, and optimising inventory and pricing flows through our platforms. Our approach to pricing and performance measurement is grounded in comprehensive data, consumer behaviour, competitor analysis, and market supply and demand. We continue to build brand awareness, ensuring our product range is effectively promoted to future customers across the channels they engage with most frequently. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # CHIEF EXECUTIVE'S REVIEW continued ## Great Place to Live We delivered significant enhancements to our buildings and service offering in 2024, delivering value-for-money for our customers. During the year we refurbished 11 buildings, upgrading the living experience for 5,200 students, driving significant improvements in Net Promoter Scores. Our accommodation is comparable in cost to HMOs once bills are included. This is before allowing for the price certainty we provide on utilities and the additional product and service features we offer, such as on-hand maintenance teams and 24/7 security, high-speed Wi-Fi and contents insurance. We have a best-in-class 24/7/365 operating platform in the student accommodation sector, underpinned by our PRISM technology platform, passionate customer-facing teams and sector-leading student support in partnership with universities. We are in the process of upgrading our PRISM platform to enhance customer experience and deliver operational efficiencies and during 2024 we delivered new payment options, as well as a new customer website and app. We continue to support student welfare through our Support to Stay programme and are also building on the research of the Living Black Commission in partnership with the HE sector to improve the university accommodation experience for black students. The impact of our customer initiatives is reflected in a further increase in our Net Promoter Scores to +50 for students at check-in and +37 with university partners (2023: +42 and +32). We have also seen an increase in the proportion of beds under nomination agreements to 57% (2023/24: 53%), reflecting our status as the partner of choice for universities as they increasingly look to trusted partners to meet their accommodation needs. ## Great Place to Work Delivering for our customers and investors requires us to attract and retain the best people and enable them to deliver their best work. We have maintained our commitment to the Real Living Wage for 2025, with 5% pay awards for our city teams. During the year we introduced a new performance management framework to support our people in having more meaningful performance conversations, helping to align individual goals with the Company's objectives. We also maintained our focus on Diversity, Equity, Inclusion and Belonging, by introducing guidance on neurodiversity and the menopause. Our teams delivered a record number of Positive Impact projects in their local communities in 2024, delivering lasting benefits in many of our cities. Our employee engagement score rose to 74, the highest in two years, and we achieved the Investors in People Gold Award, reflecting the ponique site impact of these initiatives. ## Great Place to Invest We delivered 5% growth in adjusted EPS and dividends in the year as strong rental growth offset cost increases in our operations. Rental growth also supported increases in our property valuations, which resulted in a total accounting returns of 9.6%. The quality and scale of our portfolio is key to delivering attractive, sustainable returns for our shareholders. We secured planning on three projects in our development pipeline and successfully delivered £48 million of building upgrade projects in the year at a blended yield on cost of ## Case study ### Record student satisfaction Throughout 2024, we invested into our buildings and our people to deliver a Home for Success for our residents. We were delighted to record our highest-ever customer satisfaction (NPS) score of +50 in our autumn check-in survey, marking a 9-point increase from 2023. 96% of our residents said they felt welcome, while 91% agreed that our buildings met their expectations. Our teams' hard work meant that 85% of our city clusters improved their score year-on-year, with London Central recording the highest satisfaction score of +79. University partners were also satisfied. Our 2024 Higher Education satisfaction score was the highest on record (+37, a 5-point increase from 2023), while we also improved our trust score, based on five trust metrics such as providing an excellent service to students and providing a high standard of accommodation. 22 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 10%. We continue to recycle capital with a focus on increasing alignment to the strongest universities and disposed of £304 million of properties in the year (Unite share: £161 million). In July 2024, we raised £450 million in equity to accelerate our investment activity into development and acquire value-add investment assets. We have deployed around 50% of the proceeds and expect the transaction to enhance earnings and total returns as projects are delivered. ## MORE SUPPORTIVE GOVERNMENT POLICY Higher Education contributes over £250 billion to the UK economy, creates new opportunities and life experiences for young people, and provides global influence through the soft power of education. The HE sector also plays a key part in increasing skill levels in support of the Government's mission to kickstart economic growth. Recognising this value, the new UK Government is supportive of both the university sector and international students. Tuition fees for English students increased for the first time since 2017 for the 2025/26 academic year, rising by 3.1% to £9,535 p.a. While this was welcomed by universities, they continue to face cost pressures due to the significant real-term decline in fees over recent years. In 2025, the Government will publish a comprehensive spending review including funding for Higher Education, laying out budgets and capital investment until 2029. The Government is expected to announce a new Higher Education Policy and International Education Strategy in the spring, which we expect to focus on attracting growing numbers of international students to study in the UK. The Government is actively encouraging international student recruitment and the introduction of student number restrictions by Canada and Australia is expected to increase the relative attractiveness of the UK as a study destination. Universities are well established, long-term institutions with strong balance sheets and little debt. In recent years universities have responded to rising costs by growing student numbers, increasing international recruitment and delivering efficiencies within their cost bases. We have deliberately aligned ourselves to the strongest universities which, though not immune, are best positioned to respond to rising costs. A small number of universities face greater challenges where broader cost reduction programmes may be required but our exposure to this part of the market is minimal. We are confident that our alignment to the strongest universities best positions us to navigate future changes in student demand and government policy. Our standing in the sector provides us with unique insight and unlocks opportunities to deepen partnerships. Together with our high-quality portfolio and responsible approach to rent setting, this positions us to deliver sustainable rental growth in the years ahead. ## SIGNIFICANT GROWTH OPPORTUNITIES Universities increasingly see the lack of high-quality and value-for-money accommodation as a barrier to their growth. The challenge of obsolescence in legacy estates and limited funding creates significant opportunities for Unite Students to support universities to deliver new, improved and sustainable accommodation. During the year, we announced our first university joint venture with Newcastle University to develop 2,000 new beds on university land. We expect to announce our second agreement in the next three months. In addition, we have a substantial committed pipeline of £1.2 billion of traditional development close to campuses, which is 100% aligned to Russell Group universities. The equity raised over the past two years means our pipeline is fully funded for committed schemes being delivered in the period to 2028. These projects are underpinned by demand from universities for 63% of beds, which supports significant growth in our earnings and NTA over the next four years. The Building Safety Act introduced three gateways for construction of new high-rise buildings and has added around six months to development programmes. Delays in reviewing applications as the new regulatory process is implemented have unfortunately resulted in the delivery of our Freestone Island development in Bristol being delayed until 2027. We have increased our target returns for new investment to reflect higher capital costs and increased delivery risks in the current environment. We remain focused on the delivery of our committed pipeline which will add £71 million to net operating income (Unite share) over the medium term as projects are delivered. Acquisitions providing immediate income, have become more attractive and we expect to see an increased availability of investment opportunities over the next two years. In 2024, we acquired eight properties, all in strong markets with value-add potential, which we expect to deliver attractive risk adjusted returns. We will remain disciplined in our investment activity, ensuring that new commitments enhance the growth and quality of our portfolio, while maintaining a strong balance sheet. ## POSITIVE OUTLOOK The outlook for the business is strong. Student accommodation is structurally supported by growing demand for UK Higher Education and constrained supply, which supports sustainable growth in our rents and earnings over the long-term. An environment of higher funding costs will impact our earnings growth but we also expect this to create significant opportunities for our well-capitalised business to invest and grow in the UK's strongest university cities. An encouraging outlook for student demand supports rental growth of 4-5% for the 2025/26 academic year and 2-4% growth in adjusted EPS in 2025. We see mid-single digit earnings growth over the medium term, driven by our operating performance and accelerating development completions, which supports attractive total accounting returns of c.10% before yield movements. We are investing significantly to deliver the new student homes to support the growth of the UK's strongest universities and help free up much-needed family housing in our local communities. The strength of our university relationships, best-in-class operating platform and development expertise has unlocked the opportunity for strategic partnerships and we expect to announce our second university joint venture in the coming months. THE UNITE GROUP PLC Annual Report and Accounts 2024 23 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Operations review # Strong demand ![img-35.jpeg](img-35.jpeg) Occupancy 97.5% Rental growth 8.2% (2023: 7.4%) Portfolio aligned to Russell Group 93% (2023: 93%) Annual rents increased by 8.2% on a like-for-like basis for 2024/25 academic year (2023/24: 7.4%), which was above our initial expectations. We saw strong growth across both our direct-let and nominated beds. This reflected our success in agreeing increased rental levels on renewals of single year and new multi-year nomination agreements where our university partners recognise the value our accommodation provides at a time of increasing costs. Continued enhancements to our service and product offering drove strong demand and supported the increase in our check-in NPS score to +50 (2023: +42). We achieved occupancy of 97.5% across our total portfolio for the 2024/25 academic year (2023/24: 99.8%) as the market returned to more normal levels of occupancy after two years of exceptional demand resulting from the surge in student numbers during and immediately following the pandemic. The strength of our relationships with universities, the quality and location of our portfolio and focus on UK customers at affordable price-points saw lettings outperform the wider PBSA sector where occupancy averaged around 94%. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-36.jpeg](img-36.jpeg) # KARAN KHANNA CHIEF OPERATING OFFICER ## GROWING DEMAND FOR STUDENT ACCOMMODATION The UK's universities attract young people from around the world for the quality of learning and life experience they offer. This demand for university education and our accommodation is structurally supported with the UK population of 18-year-olds forecast to grow 11% (99,000) by 2030 (Source: ONS). We are also seeing a return to growth in international demand for UK Higher Education following disruption in 2024 caused by visa changes. The latest UCAS data shows 2% growth in applications for the 2025/26 academic year from UK 18-year-olds, our core customer demographic, which is supported by population growth and strong application rates. ## Resilient student demand Overall, the undergraduate intake for 2024/25 increased by 2% to 565,000 (2023/24: 554,000) with a record number of UK 18-year-olds starting courses. We have been deliberate in aligning our portfolio to high- and medium-tariff universities, where the number of accepted applicants grew by 4% for the 2024/25 academic year. In contrast, lower tariff universities saw a 1% reduction in acceptances, continuing the trend of the past decade where higher tariff universities have captured a growing share of student demand. Our portfolio is 93% aligned to Russell Group markets, where the number of accepted students rose by 8% YoY and is now 16% above pre-pandemic levels. Recruitment of international students was disrupted for 2024/25 by the removal of visas for family members of postgraduate taught students which became effective in January 2024, and uncertainty created by the Government's review of the Graduate Route in May 2024. This led to a 14% reduction in visas issued to international students in 2024, ranging from a 5% reduction for Russell Group universities to c.25% fewer for other universities. Encouragingly, more recent data indicates a return to growth in international student numbers with January 2025 intake starts up 14% year-over-year and 3% growth in international applications through UCAS for the 2025/26 academic year. ## Strong demand from universities We have maintained a high proportion of income let to universities, with 38,326 beds (57% of total) provided under nomination agreements for 2024/25 (2023/24: 37,143 and 53%). The increase in the percentage of beds under nomination agreements reflects universities' growing reliance on private providers to meet their accommodation needs and our position as the partner of choice. We saw further improvement in our university NPS score to +37 (2023: +32), recognising the strength of our partnerships, sector-leading student welfare offer, and thought leadership in the sector. The unexpired term of our nomination agreements is 5.8 years, unchanged on 2023/24. A balance of nomination agreements and direct-let beds provides the benefit of having income secured by universities, as well as the ability to offer rooms to re-bookers and postgraduates and determine market pricing on an annual basis. We expect to maintain nomination agreements between 50-60% of beds going forward providing significant income visibility. 67% of our nomination agreements, by income, are multi-year and therefore benefit from annual fixed or inflation-linked uplifts based on RPI or CPI. The remaining agreements are single year, and we achieved a renewal rate of 81% with universities for 2024/25 where we offered to renew (2023/24: 89%). As inflation moderates, we expect annual rental uplifts will return closer to historical levels of 0.5-1.0% above CPI inflation. | Agreement length | Beds 2024/25 | % Income 2024/25 | | --- | --- | --- | | Single year | 12,812 | 33% | | 2-5 years | 8,586 | 23% | | 6-10 years | 4,308 | 11% | | 11-20 years | 6,398 | 17% | | 20+ years | 6,222 | 16% | | Total | 38,326 | 100% | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Operations review continued UK students account for 72% of our customers for 2024/25 (2023/24: 72%), making up a large proportion of the beds under nomination agreements with universities. This represents a significant increase in our weighting to UK students over recent years, compared to 60% immediately prior to the pandemic, and reflects our success in retaining second and third year students who might have historically moved into the HMO sector. The proportion of our customers from outside the UK is unchanged at 28% (2023/24: 28), highlighting the resilience of our strategy in a year when international demand was disrupted. Postgraduates make up 17% of our customer base and non-first year undergraduates accounted for a further 28% of our bookings for the 2024/25 academic year (2023/24: 17% and 27%), reflecting the success of proactive marketing to these groups. The growing appeal of our offering to postgraduate and non-first year undergraduate students, who typically seek greater independence, supports our strategy of increasing the segmentation of our customer offer to capture market share from the traditional HMO sector. Occupancy by type and domicile by academic year | | Nominations | Direct-let | | | | Total | | --- | --- | --- | --- | --- | --- | --- | | | | UK | China | EU | Non-EU | | | 2021/22 | 51% | 21% | 13% | 3% | 6% | 94% | | 2022/23 | 52% | 24% | 14% | 2% | 7% | 99% | | 2023/24 | 53% | 24% | 13% | 2% | 8% | 100% | | 2024/25 | 57% | 22% | 13% | 1% | 5% | 98% | # LEASING TRENDS NORMALISING FOR 2025/26 Applications data for the 2025/26 academic year is encouraging, with applications up 2% on 2024/25 from UK 18-year-olds who are our core customer group. We continue to see strongest demand for the high-tariff universities to which we have aligned our portfolio where applications increased by 4%. Applications from international students are 3% higher for 2025/26, with particularly strong growth from China. Across the Group's entire property portfolio, 70% of rooms are now reserved for the 2025/26 academic year, which is in-line with our long-term leasing pace. We have seen strong early demand from universities who see quality accommodation as a key part of their offer to prospective students, including new and extended multi-year nomination agreements for 7,000 beds. We expect the normalisation of booking trends seen over the course of 2024 to continue for the 2025/26 sales cycle with more bookings made later in the cycle. Recent data releases on international student demand are encouraging and we anticipate an acceleration in reservations over the coming months. Our nominations and direct-let sales performance to date is supportive of our guidance for 97-98% occupancy and rental growth of 4-5% for the 2025/26 academic year. # COST PRESSURES ARE EASING Cost growth slowed in 2024 as utility costs stabilised in the second half and inflation moderated. Property operating costs increased by 8% in 2024 (2023: 14%), principally driven by staff costs due to wage increases linked to the Real Living Wage and utility costs as a result of higher commodity prices following the expiry of cheaper historical hedges. Summer cleaning costs decreased by £0.4 million through in-sourcing activity, which supported the improvement in our NPS score. Marketing costs reduced by £0.3 million, reflecting fewer direct-let beds for sale and more targeted investment in our commercial proposition. Central and other costs together increased by £1.7 million driven by maintenance activity, growth in central teams and council tax/HMO licences. We expect further normalisation of cost growth in 2025 as utility growth slows further and inflationary pressures subside. Increased National Insurance contributions from April 2025 will cost the business around £2 million p.a. and we have adopted the 5% increase in the Real Living Wage for relevant roles. Our utility costs are fully hedged through 2025 and 35% for 2026, and we expect a low single-digit percentage increase in the cost of utilities in 2025. The combination of slowing cost growth and strong rental growth secured for the 2024/25 academic year supports an improvement in our EBIT margin of around 50bps in 2025. | Property operating expenses breakdown | 2024 £m | 2023 £m | Change | | --- | --- | --- | --- | | Staff costs | (34.0) | (29.7) | 14% | | Utilities | (30.5) | (26.9) | 13% | | Summer cleaning | (5.3) | (5.7) | (7%) | | Marketing | (7.0) | (7.3) | (4%) | | Central costs | (18.0) | (16.8) | 7% | | Other | (27.1) | (26.6) | (2%) | | Property operating expenses | (121.9) | (113.0) | 8% | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-37.jpeg](img-37.jpeg) # Q&A with Amy Round, Group People Director ## Great Place to Work ### Q: WHY DOES 'GREAT PLACE TO WORK' MATTER TO US? A: A Great Place to Work is the foundation of our success as a Great Place to Live and Invest. Our People Promise – to create the platform for our people to do their best work, experience the career journey of a lifetime, and achieve extraordinary things together – drives everything we do. Motivated, engaged teams deliver exceptional service, which fuels both resident satisfaction and shareholder value. By embedding our refreshed values – Lead with Heart, Stay on Point, Challenge the Ordinary, Unite as One – we're building a culture of high trust, care, and challenge, where everyone can contribute meaningfully to our shared goals. ### Q: HOW HAS UNITE STUDENTS BECOME A BETTER PLACE TO WORK IN 2024? A: This year marked significant progress in making Unite Students a better place to work. Achieving the Investors in People Gold Award highlighted our dedication to empowering our people and improving their experience. We conducted our first culture audit, gathering insights that informed the creation of our new values and behaviours. The launch of My Impact provided a platform for more meaningful performance conversations, helping individuals align their goals with the Company's priorities. Meanwhile, advances in Diversity, Equity, Inclusion, and Belonging (DEIB) – including guidance on neurodiversity and menopause – helped foster a more inclusive environment. Our engagement score rose to 74, the highest in two years, reflecting the positive impact of these initiatives. ### Q: WHAT ASPECTS OF UNITE STUDENTS' WORKPLACE CULTURE ARE WE MOST PROUD OF? A: We're proud of our vibrant, collaborative culture. Our teams demonstrate care, ambition, and innovation, tackling challenges with a forward-thinking mindset while staying true to our values. The progress we've made in DEIB is a testament to our commitment to creating an environment where everyone feels valued and included. Leadership and development opportunities, such as the General Manager programme, have strengthened our talent pipeline and empowered colleagues to grow in their roles. > “Happy, motivated teams are essential for delivering outstanding service to residents and driving strong performance for our shareholders.” ### Q: HOW IS OUR PEOPLE FUNCTION WORKING WITH OTHER TEAMS TO FOSTER COMPANY-WIDE SUCCESS? A: The People Function plays a key role in aligning our people strategy with business goals. Through the People Come First (PCF) framework, we focus on unlocking potential, curating culture, and building for the future. This year, My Impact facilitated better alignment of individual performance with business priorities, while preparations for our 2025 Talent Experience Platform are set to enhance learning, development and goal setting. The Culture Matters forum has been a vital channel for employee feedback, shaping priorities and fostering inclusivity. By embedding our values into key processes such as recruitment and leadership development, we are enabling collaboration. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Operations review continued ## TECHNOLOGY ENHANCING CUSTOMER EXPERIENCE AND MARGINS Our technology upgrade programme to enhance customer experience and drive efficiencies delivered significant milestones in 2024 as we launched a new student app and website, opened up new payment methods and launched a new reward and benefit platform for our people. We will deliver new booking, customer service, maintenance and finance platforms over the next two years, which will support our strategic objectives of delivering a Great Place to Live and Work. We expect to incur a further £15 million of costs in 2025 as the programme continues to deliver change. We expect to achieve a payback on our investment through enhanced utilisation of our portfolio and cost efficiencies, which will increase our EBIT margin by around 1% over the medium term. ## Case study ### Improving student wellbeing Our residents can need support at any time of day or night. If they need us, we're there: we have a 24/7 staff presence, with all employees being trained to carry out wellbeing checks, and an emergency contact centre. However, sometimes a little more support is needed – so, to complement our existing provision, we introduced a student assistance programme during the 2023/24 academic year. Delivered by Health Assured, the assistance programme includes a helpline and webchat that are staffed by clinical professionals all year round, so that our residents can benefit from their expertise. Our proactive support work is also important. As of 2024, we have more Resident Ambassadors – students paid at the National Living Wage to create a community and run events in their building – than ever before, providing our residents with valuable peer support and upskilling the Resident Ambassadors through training and experience. ![img-38.jpeg](img-38.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- PERFORMANCE REVIEW Property review # Quality Developments ![img-39.jpeg](img-39.jpeg) TOM BREWERTON GROUP DEVELOPMENT DIRECTOR Our property portfolio saw a 4.9% increase in valuations on a like-for-like basis during the year (Unite share: 4.8%), as strong rental growth more than offset the loss of Multiple Dwellings Relief (MDR) and increases in property yields. Total Pipeline 7,676 beds Total pipeline development cost £1.5 billion (2023: £1.3bn) Beds nominated by university partners 57% (2023: 53%) The see-through net initial yield of the portfolio was 5.1% at 31 December 2024 (December 2023: 5.0%), which reflects like-for-like yield expansion of 10 basis points in the year. We are encouraged by the stabilisation of property yields in the year and an increase in transaction volumes for PBSA. Rental growth was particularly strong in our wholly-owned portfolio following accretive asset management projects and recognition of rental upside in two buildings approaching the end of long-term nomination agreements. This was partially offset by an increase in property yields for larger assets in prime regional markets. The stronger valuation performance for LSAV reflects its higher London weighting, where the loss of MDR was less impactful. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Property review continued ### LIKE-FOR-LIKE CAPITAL GROWTH 1,2,3 | £m | Valuation 31 Dec 2024 | Rental growth | Yield movement | MDR/ Other² | Capital expenditure³ | Total | | --- | --- | --- | --- | --- | --- | --- | | Wholly-owned | 4,149 | 362 | (107) | (38) | (52) | 165 | | USAF | 2,881 | 202 | (10) | (49) | (25) | 118 | | LSAV | 2,058 | 150 | (9) | (5) | (21) | 115 | | Total (Gross) | 9,088 | 714 | (126) | (92) | (98) | 398 | | Total (Unite share) | 6,018 | 498 | (114) | (55) | (70) | 257 | ### % capital growth | Wholly-owned | 10.1% | (3.0%) | (1.1%) | (1.4%) | 4.6% | | --- | --- | --- | --- | --- | --- | | USAF | 7.7% | (0.4%) | (1.9%) | (0.9%) | 4.5% | | LSAV | 7.8% | (0.4%) | (0.3%) | (1.1%) | 6.0% | | Total (Gross) | 8.8% | (1.5%) | (1.1%) | (1.2%) | 4.9% | | Total (Unite share) | 9.3% | (2.1%) | (1.1%) | (1.3%) | 4.8% | 1. Excludes leased properties and gains on disposals. 2. Excludes NTA neutral re-allocation of fire safety provision to Investment Property from Other assets (liabilities) on balance sheet. 3. Other includes changes to operating cost assumptions and income adjustments on reversionary assets. The proportion of the property portfolio that is income generating is 93% by value (31 December 2023: 97%) with properties under development increasing to 7% of the property portfolio by value (31 December 2023: 3%) due to the acquisition of several development sites and capital expenditure for on-site projects during the year. We expect the proportion of properties under development to grow in 2025 as we build out the committed pipeline. The PBSA investment portfolio is 38% weighted to London by value on a Unite share basis, which is expected to rise above 40% on a built-out basis following completion of our secured development pipeline. ## Limited new supply There is widespread acknowledgement from universities and local authorities of the need for new student accommodation to support the growth of universities and relieve pressure on housing supply in local communities. However, supply conditions remain tight due to depressed levels of new development and a declining supply of private housing (HMOs). New supply of PBSA is down 60% on pre-pandemic levels, with around 11,000 beds delivered in 2024 (Source: StuRents), reflecting viability challenges created by higher build, regulation and funding costs. Weekly rents of around £200 are now required to make development viable outside London, significantly above market rents in many cities and 80% of our regional portfolio. In response to increasing costs, new supply is increasingly focused on higher value studio accommodation and is targeting a different market segment to our 85% cluster-flat portfolio. Positively, we saw build cost inflation moderate during the year, although the availability of skilled labour remains tight, and costs remain around 50% higher than five years ago. Planning timescales remain protracted due to limited planning resource for local authorities, resulting in longer delivery programmes which challenge viability. We expect the combination of complex planning, increasing regulation, and higher build and funding costs to restrict the delivery of new supply for several years. ## DELIVERING NEW, HIGH-QUALITY STUDENT HOMES Developing new high-quality accommodation in the most supply constrained markets increases our alignment to the strongest universities and is a significant driver of both earnings growth and total returns. Our development pipeline includes 7,676 beds with a total development cost of £1.5 billion, of which 100% is located in Russell Group cities and 60% by cost will be delivered in London and 63% of beds are underpinned by a university agreement. The Building Safety Act addresses the safety of new residential accommodation, by adding three gateways to the design, build and occupation of new buildings. We expect these gateways will add around six months to PBSA development THE UNITE GROUP PLC Annual Report and Accounts 2024 --- programmes once embedded, putting pressure on returns and further slowing new supply. Our appraisals and delivery targets reflect the expected impact of the Act. We have increased our return requirements for new investment to reflect higher funding costs and increased delivery risks in the current environment. We now are seeking development yields on new direct-let schemes at around 8% in regional markets and 6.75-7.0% in London, approximately 25-50 basis points higher than previous targets. We have lower hurdle rates for developments that are supported by universities or where another developer is undertaking the higher-risk activities of planning and construction. Our focus is now on successfully delivering our secured pipeline and seeking opportunities for further university joint ventures, including on-campus projects and stock transfer, building on our successes over the past year. Land prices will have to adjust further for traditional development projects to meet our increased return requirements. ## Completed schemes During the year, we completed our 271-bed Bromley Place scheme in Nottingham at a cost of £36 million. The programme was accelerated to achieve delivery for the 2024/25 academic year and occupancy is expected to stabilise in 2025/26 with the benefit of a full leasing cycle. The project is tailored to postgraduate students, with smaller cluster sizes, a higher share of studios and an enhanced room specification. Through reusing the pre-existing façade, the project's embodied carbon of c.670kg/m² is 45% below the RIBA baseline of 1,200kg/m², making it our lowest carbon building to date. ## Committed schemes – off campus We are committed to seven off-campus development schemes and our Newcastle joint venture, totalling 6,570 beds and £1,048 million in total development costs (Unite share). Once complete, the projects will add a combined £71 million to net operating income (Unite share). We are on track to deliver two schemes for the 2025/26 academic year. At Burnet Point in Edinburgh, we will deliver 298 beds in cluster-flats as well as 103 beds in two- and three-bed clusters in a separate block. These smaller flats will be available for postgraduate students, university staff and other young professionals and form part of our BTR pilot. At Avon Point in Bristol, 50% of the 623 bed scheme will be nominated by the University of Bristol on a long-term nominations agreement. The site is adjacent to the University of Bristol's new Temple Quarter campus and will grow our portfolio in Bristol to 4,700 beds. In Stratford, work is also underway at our Hawthorne House and Meridian Square projects which will be delivered for the 2026/27 and 2028/29 academic years respectively. The developments will be delivered as university partnerships, with over half of the beds let under nomination agreements to our university partners. Early works are underway at our Central Quay project in Glasgow and we expect to commit to the full build contract in the coming weeks, which supports delivery in time for the 2027/28 academic year. During the year, we acquired the 444-bed Kings Place project in London with the benefit of a full planning consent. Demolition is now underway and we expect to deliver the scheme for the 2027/28 academic year. ## University joint ventures Co-investment in accommodation alongside a university has been an objective for the business for several years. In February 2024, we announced an agreement with Newcastle University to enter into a joint venture to develop c.2,000 beds at the University's Castle Leazes site. The joint venture deepens our 20-year relationship with Newcastle University through a long-term strategic partnership. The existing halls are being demolished in anticipation of the new development. We are providing 1,600 beds being provided to house first-year students during the redevelopment. We submitted a joint planning application with Newcastle University for the new scheme in the autumn and, following delays in reaching agreement with a third party, now expect to open the first phase of Castle Leazes for the 2028/29 academic year. We are in the advanced stages of agreeing our second university joint venture with Manchester Metropolitan University, which we expect to finalise in the second quarter of 2025. The partnership will redevelop the University's existing 770-bed Cambridge Halls accommodation adjacent to its campus in Manchester city centre which is now thirty years old, and no longer meets student needs. Subject to finalising the agreement and securing planning approval, around 2,300 beds will be built on the site for delivery in 2029 and 2030. The proposed scheme offers a range of room types and price points for students, including a new more affordable design concept. We are in active discussions with a range of high-quality universities for further partnerships, which we are looking to progress over the next 12-18 months. These include discussions around stock transfer and refurbishment of existing university accommodation as well as new development both on- and off-campus. ## Future pipeline Our secured pipeline includes an additional 1,106 beds for as yet uncommitted schemes with total development costs of £305 million. We have optionality over these schemes and will make decisions on whether to proceed based on their risk-adjusted returns relative to other investment opportunities. In January, planning was rejected for our TP Paddington development in London despite being recommended for approval by planning officers, again highlighting the challenges of delivering new supply in our strongest markets. We are reviewing our options to secure planning and deliver a scheme in-line with our return requirements. THE UNITE GROUP PLC Annual Report and Accounts 2024 31 --- STRATEGIC REPORT # PERFORMANCE REVIEW Property review continued ## SECURED DEVELOPMENT AND PARTNERSHIPS PIPELINE | | Type¹ | Target delivery | Secured beds/units No. | Total completed value £m | Total devel. costs £m | Capex in period £m | Capex remaining £m | Forecast NTA remaining £m | Forecast yield on cost % | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Off-campus pipeline | | | | | | | | | | | Avon Point, Bristol | Noms | 2025 | 623 | 124 | 80 | 32 | 22 | 6 | 7.3% | | Burnet Point, Edinburgh | DL | 2025 | 401 | 76 | 62 | 16 | 33 | 5 | 7.1% | | Hawthorne House, Stratford³ | Noms | 2026 | 716 | 244 | 194 | 31 | 71 | 33 | 6.1% | | Freestone Island, Bristol | Noms | 2027 | 500 | 111 | 76 | 16 | 58 | 18 | 7.4% | | Central Quay, Glasgow | Noms/DL | 2027 | 934 | 164 | 126 | 18 | 107 | 30 | 7.4% | | Kings Place, London | DL | 2027 | 444 | 238 | 167 | 68 | 99 | 46 | 6.6% | | Meridian Square, Stratford | Noms | 2028 | 952 | 299 | 217 | 60 | 143 | 49 | 6.4% | | Total off-campus pipeline | | | 4,570 | 1,253 | 921 | 241 | 533 | 186 | 6.7% | | University JV | | | | | | | | | | | Castle Leazes, Newcastle²,⁴ | JV | 2028/29 | 2,000 | 291 | 250 | 10 | 240 | 16 | 7.3% | | Total committed pipeline | | | 6,570 | 1,401 | 1,171 | 251 | 773 | 202 | 6.8% | | Future pipeline | | | | | | | | | | | TP Paddington, London² | Noms | 2029 | 605 | | 178 | 2 | 171 | | 6.0% | | Elephant & Castle, London² | Noms | 2028 | 501 | | 127 | 4 | 122 | | 6.5% | | Total future pipeline | | | 1,106 | | 305 | 6 | 293 | | 6.2% | | Total pipeline (gross) | | | 7,676 | | 1,475 | 258 | 1,066 | | 6.7% | | Total pipeline (Unite share) | | | | | 1,353 | 252 | 949 | | 6.7% | 1. Direct-let (DL), Nominated (Noms) and Joint Venture (JV). 2. Subject to obtaining planning consent. 3. Yield on cost assumes the sale of academic space for c.£45 million. 4. Unite share 51%. Yield on cost includes management fees in NOI and deducts development management fee from costs. ## INVESTMENT ACTIVITY ALIGNED TO THE STRONGEST UNIVERSITIES ### Acquisitions Higher interest rates have increased our cost of capital. This increases the attractiveness of income today compared to income in the future, to which we now apply a higher discount rate. As a result, acquisition opportunities which are immediately income-generating have increased in attractiveness when compared to developments, which deliver income in future years. We expect increasing volumes of PBSA assets to come to market in 2025 and are focused on opportunities in our strongest markets aligned to high-quality universities, where we see the ability to deliver attractive rental growth over the long term. Following our capital raise in July, we acquired seven assets for £244 million from USAF as part of a property swap. The acquired assets are located in strong markets (Bristol, Cardiff and Liverpool) and offer value-add opportunities through refurbishment as existing nominations expire over the next two to three years. During the year we also acquired the freehold interest of a 260-bed property in London for £37 million, which the Group had previously sold and leased back, from the freeholder. The property was acquired at below replacement cost, off affordable rents and we are planning a refurbishment upon expiry of a nomination agreement in 2026. ### Disposals We continue to manage the quality of the portfolio and our balance sheet leverage by recycling capital through disposals. During the year we completed the sale of six properties to PGIM Real Estate for £184 million (Unite share: £76 million). The disposals were priced at a blended 6.2% yield and in line with book value after deductions for fire safety works. Following our capital raise in July, we sold two assets to USAF for £120 million as part of a property swap. The assets, located in Bristol and Liverpool, offer modern, high-quality accommodation with 58% of beds let under university nomination agreements. We will continue to recycle capital from disposals to maintain LTV around our c.30% target and net debt: EBITDA in the 6-7x range. The level of planned disposals will adjust to reflect capital requirements for our development and asset management activity as well as market pricing. We will target future disposals of around £100-150 million p.a. (Unite share). ### Asset management We see significant opportunities to create value through asset management projects in our existing estate. Refurbishment ranges from smaller projects focused on upgrading communal areas and energy efficiency, through to full building refurbishment or more significant works such as extension or redevelopment. These projects have shorter lead times than new developments, often carried out over the summer period, and deliver both attractive risk-adjusted returns and significant enhancements to the student experience. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-40.jpeg](img-40.jpeg) # Q&A with Jo Blair, Head of Specification ## Great Place to Live ### Q: HOW IS UNITE STUDENTS INVESTING IN ITS PORTFOLIO? A: We are using data to prioritise project improvement activity throughout our estate. We are investing in several areas, which link to our business priorities, such as refurbishing our properties, continuing our cladding replacement activity and investing in sustainable technology and initiatives. It's an ambitious programme of activity which has been forecast over several years and underpins our continued dedication to the safety, wellbeing and experience our teams and residents experience within their day-to-day lives in our properties. ### Q: WHY HAS THE COMPANY INVESTED IN ITS ASSETS OVER THE PAST 12 MONTHS? A: To maintain our purpose of delivering a Home for Success, we need to manage and maintain our properties. We maintain our standing with the Higher Education sector as a trusted and strategic partner. We also retain the trust and support our residents have in us and our teams, as well as providing reassurance that safety is a priority. As we interrogate the technical and reactive data, alongside continual analysis of future portfolio performance and resident feedback, we can see where investment needs to take place within our existing assets. ### Q: WHICH PROJECTS IN 2024 HAVE MADE THE BIGGEST DIFFERENCE TO THE PORTFOLIO? A: We have made a real step change in our designs to enhance community-building and resident experience. This includes changes within our bedroom and kitchen design as well as communal areas. I recently visited our London properties and the delight of seeing the use of the space in real time, as well as hearing direct student feedback around how they have been enjoying these spaces, not only helps inform how we continue to evolve this work but confirms where we have got it right. Continued investment in sustainability activity and movement towards net zero is excellent. > “As we interrogate the technical and reactive data, alongside resident feedback, we can see where investment needs to take place within our existing assets.” ### Q: WHAT INVESTMENTS ARE YOU MOST EXCITED FOR IN 2025? A: I am excited to see the continued improvement, growth and application of our design work. Anything you can see, touch and feel always sparks conversation, feedback, and differing opinions. Activity like replacing heating systems to support our net zero goals, revising lighting design to enhance wellbeing, or a lift replacement, can be complex and involve a lot of people over several areas of expertise. Realising the level of detail and care the teams and suppliers take to find the answers, to then see it applied in properties, is not only galvanising but is also a constant reminder of how dedicated our people are. THE UNITE GROUP PLC Annual Report and Accounts 2024 33 --- STRATEGIC REPORT # PERFORMANCE REVIEW Property review continued In the year, we delivered 11 refurbishment projects in strong markets alongside other building upgrades. Investment across the projects totalled £48 million (Unite share: £39 million) and delivered a 10% yield on cost through rental uplifts and operating cost savings. The projects delivered additional beds, upgraded existing rooms and enhanced the environmental performance of the properties. We have a significant pipeline of attractive asset management and building improvement opportunities and will accelerate investment to c.£65 million (Unite share: £45 million) during 2025, improving the experience of around 3,000 students for the 2025/26 academic year. ## Build-to-rent (BTR) We believe there is an opportunity to grow our platform in the wider living sector by catering to the growing number of young professional renters living in major UK cities. Our pilot BTR asset in Stratford has performed well and is integrated into our operating platform of 1,700 PBSA beds in the area. During the period, we committed to the planned refurbishment of our 180 Stratford pilot asset. The project will deliver new amenity space as well as a rolling refurbishment of the apartments over the next 24 months as units are vacated. Total costs are expected to be c.£15 million, delivering a yield on cost in line with PBSA returns. We continue to review BTR opportunities though do not expect to increase our capital commitment in the short term. ## FIRE SAFETY Fire safety is a critical part of our health and safety strategy, and we have a track record of leading the sector on fire safety standards through our proactive approach. During the period we completed fire safety improvements on seven properties across our estate and spent £76 million (Unite share: £31 million) on fire safety capex during the year. Our year-end balance sheet includes committed fire safety spend of £118 million (£62 million Unite share), the costs for which will be incurred over the next two years. Of this, £6 million (£5 million Unite share) is included in provisions and £112 million (£57 million Unite share) is deducted from the fair value of our investment properties. During the year, we reached agreement with contractors for recovery of £32 million of remediation costs (Unite share: £23 million) in relation to three properties. In total, we have now agreed settlements totalling £72 million (Unite share: £51 million). We expect to recover 50-75% of total cladding remediation costs through claims from contractors, although the settlement and recognition of these claims is likely to lag costs incurred to remediate properties. We anticipate the remediation programme to complete in 2028 with net spend higher in the earlier years of the programme and reducing substantially from 2026. ## Case study ### Our 2024 refurbishment projects We're committed to providing high quality, affordable accommodation for our residents. In 2024, we completed 11 refurbishment projects, with 5,239 students benefiting from investment into their homes. £32 million was spent upgrading buildings from London to Glasgow, signalling the start of an ambitious refurbishment programme which will see Unite Students invest c.£50-75 million per year on refurbishments over the next five years. We're already seeing results from this project. Our £1.5 million investment into a new reception area and renovated study and social areas at London's Stapleton House has increased student satisfaction (NPS) in the building by 28 points year-on-year. At Rushford Court in Durham, we worked in partnership with Durham University to upgrade the 358-bed building, with the intention of it becoming the university's 18th college in future. ![img-41.jpeg](img-41.jpeg) 34 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- PERFORMANCE REVIEW Financial review # Strong, sustainable performance ![img-42.jpeg](img-42.jpeg) MIKE BURT CHIEF FINANCIAL OFFICER Adjusted EPS 46.6p (2023: 44.3p) Total Accounting Return 9.6% (2023: 2.9%) Loan-to-value ratio 24% (2023: 28%) The Group uses alternative performance measures (APMs), which are not defined or specified under IFRS. These APMs, which are not considered to be a substitute for IFRS measures, provide additional helpful information and include, among others, measures based on the European Public Real Estate Association (EPRA) best practice recommendations. The metrics are used internally to measure and manage the business. ## EARNINGS AND ADJUSTED EARNINGS We delivered a strong operating performance in 2024, with adjusted earnings increasing by 16% to £213.8 million (2023: £184.3 million), reflecting an increase in net operating income and a reduction in finance costs, when compared to the prior year. Adjusted EPS increased by 5% to 46.6p (2023: 44.3p), reflecting the increased share count following the capital raise in July. THE UNITE GROUP PLC Annual Report and Accounts 2024 35 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Financial review continued | | 2024 £m | 2023 £m | | --- | --- | --- | | Rental income | 398.0 | 369.5 | | Property operating expenses | (121.9) | (113.0) | | Net operating income (NOI) | 276.1 | 256.5 | | NOI margin | 69.4% | 69.4% | | Management fees | 17.3 | 16.9 | | Overheads | (38.4) | (33.1) | | Finance costs | (44.0) | (55.1) | | Development and other costs | (9.1) | (9.1) | | EPRA earnings | 201.9 | 176.1 | | SaaS implementation costs | 11.9 | 8.2 | | Adjusted earnings | 213.8 | 184.3 | | Adjusted EPS | 46.6p | 44.3p | | EPRA EPS | 44.0p | 42.4p | | EBIT margin | 68.1% | 68.0% | A reconciliation of profit after tax to EPRA earnings and adjusted earnings is set out in note 2.2b to the financial statements. IFRS profit before attributable to owners of the Parent Company increased to £441.9 million in the year (2023: £102.5 million), reflecting the increase in adjusted earnings of £29.5 million, a revaluation gain of £239.6 million (2023: £61.2 million loss) and a £3.5 million loss for interest rate swaps and cancellation costs (2023: £17.2 million loss). | | 2024 £m | 2023 £m | | --- | --- | --- | | Adjusted earnings | 213.8 | 184.3 | | SaaS implementation costs | (11.9) | (8.2) | | EPRA earnings | 201.9 | 176.1 | | Valuation (losses)/gains and profit/(loss) on disposal | 239.6 | (61.2) | | Changes in valuation of interest rate swaps and debt break costs | (3.5) | (17.2) | | Non-controlling interest and other items | 6.0 | 4.8 | | IFRS profit before tax | 444.0 | 102.5 | | Adjusted earnings per share | 46.6p | 44.3p | | IFRS diluted earnings per share | 96.1p | 24.6p | A reconciliation of profit before tax to adjusted earnings and EPRA earnings is expanded in section 7 of the financial statements. ## RENTAL GROWTH AND PROFITABILITY Rental income increased by £28.5 million to £398.0 million, up 8% compared to 2023. Like-for-like rental income, excluding the impact of major refurbishments, acquisitions, disposals and development completions, increased by 8% during the year reflecting strong rental growth but modestly lower occupancy for the 2024/25 academic year. Non-like-for-like income grew by £4.3 million with additional rentol income from acquisitions and development completions exceeding the impact of income forgone through disposals. Operating expenses increased by 6% for like-for-like properties, primarily driven by increased utility and staff costs due to the expiry of cheaper utility hedges and increases in the Real Living Wage. This resulted in an 8% increase in net operating income to £276.1 million (2023: £256.5 million) or 8% on a like-for-like basis. 36 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- | | FY 2024 | | | FY 2023 | | | YoY change | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | £m | Wholly-owned | Share of Fund/JV | Total | Wholly-owned | Share of Fund/JV | Total | £m | % | | Rental income | | | | | | | | | | Like-for-like properties | 254.5 | 91.2 | 345.7 | 237.8 | 83.7 | 321.5 | 24.2 | 8% | | Non-like-for-like properties | 27.5 | 24.8 | 52.3 | 21.4 | 26.6 | 48.0 | 4.3 | | | Total rental income | 282.0 | 116.0 | 398.0 | 259.2 | 110.3 | 369.5 | 28.5 | 8% | | Property operating expenses | | | | | | | | | | Like-for-like properties | (78.0) | (28.4) | 106.4) | (74.5) | (25.5) | (100.0) | (6.5) | 6% | | Non-like-for-like properties | (9.2) | (6.3) | (15.5) | (5.3) | (7.7) | (13.0) | (2.5) | | | Total property operating expenses | (87.2) | (34.7) | (121.9) | (79.8) | (33.2) | (113.0) | 8.9 | 8% | | Net operating income | | | | | | | | | | Like-for-like properties | 176.5 | 62.8 | 239.3 | 163.3 | 58.2 | 221.5 | 17.8 | 8% | | Non-like-for-like properties | 18.3 | 18.5 | 36.8 | 16.1 | 18.9 | 35.0 | 1.8 | | | Total net operating income | 194.8 | 81.3 | 276.1 | 179.4 | 77.1 | 256.5 | 19.6 | 8% | Overheads increased by £5.3 million, primarily reflecting investment into our technology platform. Excluding the impact of Software as a Service implementation costs, as underlying overheads decreased by £0.3 million. During the year SaaS implementation costs relating to our technology upgrade programme of £15.9 million were incurred and a deferred tax credit of £4.0 million (2023: £11.0 million and £2.8 million). Recurring management fee income from joint ventures increased to £17.3 million (2023: £16.9 million), driven by increased property valuations and NOI in USAF and LSAV. Our EBIT margin increased slightly to 68.1% (2023: 68.0%), reflecting the offsetting impact of increases in rental income and operating costs. We are targeting up to a 50bps improvement in our EBIT margin in 2025, driven by rental growth, completions of development and asset management projects and efficiencies delivered through procurement and the enhanced use of technology. We expect these factors to more than offset the impact of increases in staff costs linked to higher National Insurance contributions and increases in the Real Living Wage. Finance costs reduced to £44.0 million in 2024 (2023: £55.1 million), with the impact of lower borrowings following our capital raise more than offsetting the impact of an increase in our average cost of debt to 3.6% (2023: 3.3%) due to refinancing activity and higher rates on new debt. Capitalised interest linked to our development pipeline increased to £15.5 million (2023: £8.4 million) due to increasing levels of development activity. ## EPRA NTA GROWTH EPRA net tangible assets (NTA) per share, our key measure of NAV, increased by 6% to 972p at 31 December 2024 (31 December 2023: 920p). EPRA net tangible assets were £4,758 million at 31 December 2024, a £743 million increase from £4,015 million in the prior year. The main drivers of the £743 million increase in EPRA NTA and 52p increase in EPRA NTA per share were our capital raise, and retained profits and valuation gains on our investment and development portfolio, which were partially offset by further deductions for fire safety capex. | | £m | Diluted pence per share | | --- | --- | --- | | EPRA NTA as at 31 December 2023 | 4,015 | 920 | | Investment portfolio | 416 | 85 | | Yield movement | (114) | (23) | | Multiple Dwellings Relief | (55) | (11) | | Development portfolio | 20 | 4 | | Fire safety capex net of claims | (17) | (3) | | Capital raise | 442 | (9) | | Other | 51 | 9 | | EPRA NTA as at 31 December 2024 | 4,758 | 972 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW Financial review continued IFRS net assets increased by 18% in the year to £4,812 million (31 December 2023: £4,067 million), principally driven by net proceeds from the capital raise, valuation gains and retained profits. On a per share basis, IFRS NAV increased by 5% to 982p. ## PROPERTY PORTFOLIO The valuation of our property portfolio at 31 December 2024, including our share of property assets held in USAF and LSAV, was £6,375 million (31 December 2023: £5,770 million). The £605 million increase in portfolio value reflects the valuation movements outlined above, capital expenditure and interest capitalised on developments. ## SUMMARY BALANCE SHEET | | 31 December 2024 | | | 31 December 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | £m | Wholly-owned £m | Share of Fund/JV £m | Total £m | Wholly-owned £m | Share of fund/JV £m | Total £m | | Rental properties¹ | 4,025 | 1,827 | 5,852 | 3,728 | 1,782 | 5,510 | | Rental properties (leased) | 72 | - | 72 | 85 | - | 85 | | Properties under development | 451 | - | 451 | 175 | - | 175 | | Total property | 4,588 | 1,827 | 6,375 | 3,988 | 1,782 | 5,770 | | Net debt | (989) | (521) | 1,510 | (1,030) | (541) | (1,571) | | Lease liability | (73) | - | (73) | (84) | - | (84) | | Other assets/(liabilities) | 1 | (35) | (34) | (49) | (51) | (100) | | EPRA net tangible assets | 3,487 | 1,271 | 4,758 | 2,825 | 1,190 | 4,015 | | IFRS NAV | 3,547 | 1,265 | 4,812 | 2,848 | 1,219 | 4,067 | | LTV | | | 24% | | | 28% | 1. Rental properties (owned) includes assets classified as held for sale in the IFRS balance sheet. ## RETURN ON EQUITY (TOTAL ACCOUNTING RETURN) Dividends paid of 36.0p (2023: 33.5p), together with growth in EPRA NTA, resulted in a total accounting return of 9.6% in the year (2023: 2.9%). Our adjusted EPS yield (measured against opening EPRA NTA) increased to 5.1% in the year (2023: 4.8%), reflecting the growth in our recurring earnings. We expect to deliver a total accounting return of 8-10% in 2025 before the impact of any property yield movements. This reflects our expectation of growing recurring earnings, rental growth for the 2025/26 academic year and valuation uplifts from our development and asset management pipeline. ## CASH FLOW AND NET DEBT The business generated £61 million of net cash in 2024 (2023: £176 million) and net debt reduced to £1,510 million (2023: £1,571 million). The key components of the movement in net debt were: - Capital raise gross proceeds of £450 million - Operational cash flow of £216 million on a see-through basis - Acquisitions net of disposals of £63 million on a see-through basis - Total capital expenditure of £360 million on a see-through basis - Dividends paid of £137 million - A £46 million net outflow for other items. In 2025, we expect see-through net debt to increase as planned capital expenditure on investment and development activity will exceed anticipated property disposals. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-43.jpeg](img-43.jpeg) # Q&A with Tom Ellis, Group Strategy & Technology Director ## Building for growth ### Q: CAN YOU SUMMARISE HOW UNITE STUDENTS' STRATEGY HAS BEEN IMPLEMENTED IN 2024? A: We have refreshed our strategy, based around our purpose – Home for Success – creating communities where young people thrive. Our strategic vision is to be the leading living platform for young people. Building from a position of strength, we will become the partner of choice for the strongest UK universities, the preferred home for university students of all years, and for young renters. Our strategy is to accelerate our core growth while building for the future. This is built around revenue growth, university partnerships, our development pipeline and asset initiatives. ### Q: WHAT ARE THE MAIN TECHNOLOGY INITIATIVES THE COMPANY HAS INVESTED IN DURING 2024 AND HOW ARE THEY MAKING A DIFFERENCE? A: We are upgrading the digital experience for our customers and employees and 2024 reflects the first of three years of strong delivery. We upgraded the customer website to improve the initial experience from awareness through to booking, as well as our customer app, to improve the living experience. Our new brand and digital asset portals professionalise our customer messaging and our Stripe payment portals improve the management of customer payments. Our colleagues enjoy a new rewards and benefits platform, plus a more tailored wellbeing platform. ### Q: HOW WILL THE INVESTMENTS MADE OVER THE PAST 12 MONTHS IMPACT ON THE BUSINESS GOING FORWARD? A: Over the next couple of years, the business will upgrade our finance systems and processes, improving efficiency through automation. We will also launch our primary service management platform to support student case management and maintenance. Our new booking and inventory management system will be upgraded to manage the end-to-end sales booking journey and coordinate all operational activities. > "Building from a position of strength, we will become the partner of choice for the strongest UK universities." ### Q: WHAT'S BEEN THE BIGGEST POSITIVE SO FAR AND WHAT DOES UNITE STUDENTS' SUCCESSFUL GROWTH IN 2025 LOOK LIKE TO YOU? A: It is fantastic to have refreshed our strategy, based around our purpose, to provide clarity in our ambition. We're starting to deploy digital value to our customers improving the customer experience, both before and during their time living with us, through a more self-service approach and by improving the way our employees interact and spend their time. Successful growth is implementing the first year of our five-year strategy, focusing on our priorities and continuing our finance transformation. This also involves focusing on residents' experience and property management milestones. THE UNITE GROUP PLC Annual Report and Accounts 2024 39 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Financial review continued ## DEBT FINANCING AND LIQUIDITY During the year, borrowing rates for new debt remained high, as markets adjusted to a 'higher for longer' interest rate environment. We are well protected from significant increases in borrowing costs for our existing debt through our well-laddered debt maturity profile and forward hedging of interest rates. However, we still expect to see our borrowing costs increase over time as we refinance in-place debt and draw new borrowings at higher prevailing rates. We are focused on maintaining a strong and flexible balance sheet and will continue to use leverage to support our growth and enhance risk-adjusted returns. In response to the higher interest rate environment, we reduced our medium-term target LTV to c.30% on a built-out basis (previously 30-35%). LTV reduced to 24% at 31 December 2024 (31 December 2023:28%), reflecting lower net debt and increases in our property valuations. We also continue to monitor our interest cover and net debt to EBITDA ratios. In 2024, interest cover improved to 6.2x (2023: 4.6x) and net debt to EBITDA reduced to 5.5x (2023: 6.1x), reflecting both the improved operational performance of the business and the impact of lower leverage. We aim to maintain an ICR ratio of 3.5-4.0x and a net debt to EBITDA ratio of 6-7x. We remain committed to active portfolio management through capital recycling and will continue to target disposals of around £100-150 million p.a. (Unite share). Following our capital raise, The Unite Group credit rating was upgraded to BBB+ by Standard & Poor's, reflecting our lower leverage targets, robust capital position, growing cash flow and track record. | Key debt statistics (Unite share basis) | 31 December 2024 | 31 December 2023 | | --- | --- | --- | | See-through net debt | £1,510m | £1,571m | | LTV | 24% | 28% | | Net debt: EBITDA ratio | 5.5x | 6.1x | | Interest cover ratio | 6.2x | 4.6x | | Average debt maturity | 3.8 years | 3.8 years | | Average cost of debt | 3.6% | 3.3% | | Proportion of investment debt at fixed rate | 100% | 100% | ## Funding activity As at 31 December 2024, the wholly-owned Group had £1,024 million of cash and debt headroom (31 December 2023: £579 million), comprising £274 million of drawn cash balances and £750 million of undrawn debt (2023: £29 million and £550 million respectively). In February 2024 we increased our revolving debt capacity by £150 million to £750 million and added a further £150 million term loan. Both new facilities are on similar terms to our existing RCF and mature in 2027. The new loans increase investment capacity and provide flexibility to capitalise on growth opportunities. The Group established a £2 billion Euro Medium Term Note (EMTN) Programme during the year. Following establishment of the programme, the Group issued a £400 million eight-year bond in June bearing a 5.625% coupon. In November, the proceeds of the bond were partially used to repay the maturing £300 million Liberty Living bond with the balance held for general corporate purposes. During the year, USAF completed a new £150 million secured loan, refinancing its maturing £150 million RCF. The five-year loan has a fixed rate of 5.6%. We have agreed terms with a lender for the refinancing of the USAF £395 million bond due to mature in June 2025, which we expect to complete in the coming months. ## Interest rate hedging arrangements and cost of debt Our average cost of debt increased to 3.6% in the year (2023: 3.3%) as new debt was issued at higher prevailing rates. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- At the year-end, 100% of the Group's debt was subject to fixed or capped interest rates (31 December 2023: 100%), providing protection against future changes in interest rates. Based on our hedging position, forecast drawings, planned refinancing and market interest rates, we expect an average cost of debt of 4.1% for 2025 and 4.5% for 2026. Reflecting an increased level of development activity, we expect a corresponding increase in capitalised interest in 2025 to around £25-30 million (2024: £15.5 million). Our average debt maturity is unchanged at 3.8 years (31 December 2023: 3.8 years) and we continue to proactively manage our debt maturity profile and diversify our lending base. ## DIVIDEND We are proposing a final dividend payment of 24.9p per share (2023: 23.6p), totalling 37.3p for the full year (2023: 35.4p) and representing a 5% increase compared to 2023. This represents a payout ratio of 80% of adjusted EPS. The final dividend will be fully paid as a Property Income Distribution (PID) of 24.9p, which we expect to fully satisfy our PID requirement for the 2024 financial year. Subject to approval at Unite's Annual General Meeting on 15 May 2025, the dividend will be paid in either cash or new ordinary shares (a 'scrip dividend alternative') on 30 May 2025 to shareholders on the register at close of business on 22 April 2025. The last date for receipt of scrip elections will be 8 May 2025. During 2024, scrip elections were received for 26% and 1% of shares in issue for the 2023 final dividend and 2024 interim dividend respectively. Further details of the scrip scheme, the terms and conditions and the process for election are available on the Company's website. We plan to distribute 80% of adjusted EPS as dividends for the 2025 financial year. ## Tax and REIT status The Group holds REIT status and is exempt from tax on its property business. During the year, we recognised a corporation tax charge of £5.0 million (2023: £1.2 million charge), with the increase primarily due to higher taxable profits from interest income. ## FUNDS AND JOINT VENTURES The table below summarises the key financials at 31 December 2024 for our co-investment vehicles USAF and LSAV. | | Property assets £m | Net debt £m | Other liabilities £m | Net assets £m | Unite share of NTA £m | Total return | Maturity | Unite share | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | USAF | 2,848 | (696) | (78) | 2,074 | 604 | 8.5% | Infinite | 29% | | LSAV | 1,994 | (636) | (25) | 1,333 | 666 | 10.3% | 2032 | 50% | Property valuations increased by 4.5% for USAF and 6.0% in LSAV over the year, on a like-for-like basis, with rental growth more than offsetting the loss of Multiple Dwellings Relief. Property yields remained broadly stable across both portfolios. USAF is a high-quality, large-scale portfolio of 24,326 beds in leading university cities. The fund has positive future prospects through rental growth and investment opportunities in asset management initiatives in its existing portfolio. USAF, in-line with other non-listed property funds, has received redemption requests which are expected to be fulfilled by mid-2025 from the proceeds of the recently completed asset swap and planned disposals. ## FEES During the year, the Group recognised net fees of £17.3 million from its fund and asset management activities (2023: £16.9 million). The increase in fee income is due to growing income and property valuations, partially offset by lower third-party assets under management following redemptions in USAF during the year. | | 2024 £m | 2023 £m | | --- | --- | --- | | USAF asset management fee | 12.4 | 12.1 | | LSAV asset and property management fee | 4.9 | 4.8 | | Total fees | 17.3 | 16.9 | THE UNITE GROUP PLC Annual Report and Accounts 2024 41 --- STRATEGIC REPORT # Case study # Our Newcastle University joint venture We entered our first joint venture (JV) framework agreement in 2024, agreeing to work with Newcastle University on the development of 2,000 new student beds at Castle Leazes (subject to planning permission). This long-term strategic partnership builds on an existing 20-year partnership with the university, which is a part of the Russell Group. We're jointly planning to invest £250 million into redeveloping the Castle Leazes site, creating more sustainable, high-quality accommodation for students. Unite Students will build and manage the property, in addition to providing 1,600 beds at our other sites for Newcastle University students during the development phase. With the original building demolished in the summer of 2024, construction is due to start in 2025 and complete in time for the 2027/28 academic year. ![img-44.jpeg](img-44.jpeg) # RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL REPORT We confirm that to the best of our knowledge: - The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole - The strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face - The Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's position and performance, business model and strategy. Joe Lister Chief Executive 25 February 2025 Michael Burt Chief Financial Officer # FORWARD-LOOKING STATEMENTS The preceding preliminary statement has been prepared for the shareholders of the Company, as a body, and for no other persons. Its purpose is to assist shareholders of the Company to assess the strategies adopted by the Company and the potential for those strategies to succeed and for no other purpose. The preliminary statement contains forward-looking statements that are subject to risk factors associated with, among other things, the economic, regulatory and business circumstances occurring from time to time in the sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward-looking statements will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation. Nothing in the preliminary statement should be considered or construed as a profit forecast for the Group. Except as required by law, the Group has no obligation to update forward-looking statements or to correct any inaccuracies therein. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- PERFORMANCE REVIEW Sustainability # Making a positive impact Together, we're investing in brighter futures, stronger communities and a smaller environmental footprint. Net zero carbon by 2030 # On track Adjusted earnings invested in social initiatives 1.2% Target: 1% in year Employee volunteering 31% Target: 20% of employees volunteer for an hour or more in year ![img-45.jpeg](img-45.jpeg) JAMES TIERNAN HEAD OF SUSTAINABILITY Fulfilling our Home for Success purpose and achieving our strategic business objectives can only be achieved if we continue to put sustainability at the heart of what we do. Great Place to Live: Our residents expect us to play our part tackling the social and environmental issues they care about, such as providing energy, carbon and water efficient homes and championing inclusion and success in HE and early careers. Great Place to Work: Our ambition is for our teams to be engaged and empowered to deliver high standards of service and performance. This means creating a diverse and inclusive organisation where our people can thrive. Great Place to Invest: Access to investment and finance is critical to our long-term business ambition, and is increasingly dependent on our ESG performance. We must transition to net zero carbon, maintain the highest standards of safety and compliance, and provide transparent reporting and disclosure on environmental, social and governance issues. Our sustainability framework helps us achieve these outcomes. It focuses on making a positive impact across four key areas identified during our standard materially assessment conducted in 2021 and revalidated each year via direct stakeholder engagement. See our Sustainability Report for details. S Sustainability Report: https://www.unitegroup.com/sustainability THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW Sustainability continued ![img-46.jpeg](img-46.jpeg) ![img-47.jpeg](img-47.jpeg) ![img-48.jpeg](img-48.jpeg) ![img-49.jpeg](img-49.jpeg) ## Young people Championing inclusion, wellbeing and success for young people in HE. - Supporting care-experienced students. - Leading on inclusion and achievement for young people in HE. ![img-50.jpeg](img-50.jpeg) ## Our people Creating a diverse and inclusive workplace where our people can thrive. - Real Living Wage employer. - 40% females in senior leadership. - 65% of senior leadership hired internally. - 10% ethnic minority representation in senior leadership by 2025. ![img-51.jpeg](img-51.jpeg) ## Making a positive impact: our ambitions ### Communities Making a real contribution to the communities we operate in. - Investing 1% of adjusted earnings in social initiatives. - Impactful local community projects delivered by every property and team. - 20% employee volunteering participation rate. - Making spaces available in our properties for local community use. ### Environment Tackling climate change and reducing our environmental impacts. - 56% reduction in absolute operational Scope 1 & 2 market-based carbon emissions by 2030, compared to 2019 levels. - 28% cut in operational energy levels by 2030. - 100% of electricity from renewable sources by 2030. ![img-52.jpeg](img-52.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # SUSTAINABILITY TARGETS AND KEY PROGRESS IN 2024 | Our ambition | Making a positive impact for young people | Making a positive impact for communities | Making a positive impact for our people | Making a positive impact for the environment | | --- | --- | --- | --- | --- | | Our targets | • Maintain support to the Unite Foundation. • 100% of properties to have Resident Ambassadors. • Sign up to the Care Leaver Covenant. | • 1% of adjusted earnings on social investment. • All teams achieve Bronze award or higher in our Positive Impact sustainability engagement programme (bonus metric for all employees). • 20% of all employees participate in volunteering in 2024. | • 40% women in senior leadership by end of 2025. • 65% of leadership and management population hired internally. • Zero reportable accidents and incidents. • Maintain Real Living Wage accreditation. • 10% ethnic minority representation in management and senior leadership by end of 2025. | • Net zero carbon by 2030. See our net zero carbon pathway for details https://www.unitegroup.com/sustainability/our-net-zero-pathway. • 56% cut in Scope 1 & 2 market-based emissions by 2030 vs. 2019. • 28% reduction in energy intensity by 2030 vs. 2019. • 100% renewable electricity by 2030. • 35kWh/m² operational energy for new developments by 2030. • 625kgCO₂e/m² of embodied carbon for new developments by 2030. • EPC A and BREEAM Excellent for all new builds. | | Key progress in 2024 | • Five internships linked to the Interns Foundation, and eight industrial placements. • 95 new Unite Foundation scholars at the start of the 2024/25 academic year. • New six-week welcome programme, with Resident Ambassadors and interns shaping and delivering a programme of meaningful and inclusive events. • Over 90% of student-facing employees completed new student support training under our Support to Stay programme. • 6% increase in number of propoerties with Resident Ambassadors, up to 91% from 85% in 2023. • Report to Government on Care Leavers in HE. | • £2.6 million (1.2% of adjusted earnings) invested in social initiatives in 2024, a £160k increase from 2023. • 36% increase in the number of teams achieving a Positive Impact Gold award for local community projects, compared to 2023. • Passed a cumulative total of £2 million of donations from our properties to British Heart Foundation over seven years. • 9% increase in volunteering participation rate, up from 22% in 2023 to 31% in 2024. | • Continued to pay the Real Living Wage. • Achieved Gold Investors in People accreditation. • Ranked 7th in the Best 50 Small-Medium Sized Placement Schemes for our Early Careers programme. • Launched My Impact framework to help drive performance. • Made progress towards our 40% target of women in senior leadership roles with 37% representation achieved. | • £10.2 million invested in energy, water and carbon reduction in 2024. • 56.7% reduction in Scope 1 & 2 emissions vs. 2019. • 99.9% of electricity backed by renewable energy certificates. • Lowest ever new build embodied carbon (694kgCO₂e/m²) and design operational energy (69kWh/m²) at Bromley Place. • 0.7% reduction in water consumption vs. 2023. • 91.7% A-B rated EPC by floor area. | THE UNITE GROUP PLC Annual Report and Accounts 2024 45 --- STRATEGIC REPORT # PERFORMANCE REVIEW Sustainability continued ## NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT The table below summarises how we comply with non-financial and sustainability performance reporting requirements in line with The Companies Act 2006, and Climate-related Financial Disclosure Regulations 2022. Relevant policies and statements are available online at www.unitegroup.com. | Description of the business model | Details of who we are, how we operate and the value we create can be found on page 4 onwards. | | --- | --- | | Employee | Our Diversity, Equity, Inclusion, Belonging and Wellbeing strategy is focused on providing opportunities for all, see pages 90 and 99 and at https://www.unitegroup.com/sustainability/diversity-and-inclusion. The Academy provides learning opportunities to enhance knowledge, skills and development, see https://www.unitegroup.com/sustainability. Our employee engagement forum, Culture Matters, puts the employee voice front and centre, so employees have a direct channel to senior management, allowing them to help shape business strategy and policy, see pages 84 and 99. Our Whistleblowing Policy enables employees to raise a concern in confidence, see page 84 or https://www.unitegroup.com/sustainability/policies-documentation. Gender diversity and pay gaps across Unite Group. Our full Gender Pay Gap Report for can be found on our website https://www.unitegroup.com/wp-content/uploads/2021/03/Unite-Group-Gender-Pay-Gap-Report-2023_Web-Ready-PDF.pdf. Further details on gender split during 2024 are also available on page 47. Our Board Diversity Policy seeks to enhance the overall diversity of the Board and ensures an appropriate and diverse mix of skills, experience and knowledge, see page 99. | | Anti-corruption and bribery | Our Anti-Bribery Policy has a zero-tolerance approach to bribery and corruption and outlines employee responsibilities. Our Gifts and Hospitality Policy sets out the rules for accepting gifts and hospitality. Our Code of Ethics ensures employees adhere to the highest business and personal ethics. You can read our policies here: https://www.unitegroup.com/sustainability/policies-documentation. | | Modern slavery and human rights | A zero-tolerance approach to slavery to prevent it anywhere within our business and supply chain. Due diligence on all third parties we work with. See our Modern Slavery Statement and Code of Ethics at https://www.unitegroup.com/wp-content/uploads/2022/07/Unite-Group-plc-Modern-Slavery-Statement-FY-ending-2022.pdf, and Supplier Code of Conduct https://www.unitegroup.com/our-suppliers sets out the highest standards of business and personal ethics. | | Policy, due diligence and outcomes | We carry out regular reviews of our policies to ensure we continue to identify key risks and management and carry out appropriate due diligence. The policies included in this non-financial information statement contain further details (as cross-referenced herein) of the policy and policy outcomes, including the following: Risk management detailing our risk management framework and risk review process from page 52. Principal risks and uncertainties considering both internal and external risks, the potential impact and details of risk mitigation in place, on page 52. Viability statement considering the viability of Unite Group for the next three-year period on page 62. Audit & Risk Committee Report on page 101. Sustainability Committee Report on page 106. Unite Group Health & Safety Committee Report page 108 and Health and Safety Policy (and https://www.unitegroup.com/sustainability/policies-documentation) which details Unite Group’s commitment to the health and safety of our employees, students and visitors to our sites. Non-financial KPIs relevant to the Company’s business on page 17 and https://www.unitegroup.com/sustainability. | 46 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT CONTINUED ## Social matters Our Resident Ambassador programme provides peer-to-peer support for students, see https://www.unitegroup.com/sustainability. Our Positive Impact programme encourages our people and teams to work with local stakeholders on community impact initiatives, see https://www.unitegroup.com/sustainability. Market overview focusing on demographic trends, see from page 6. The Unite Group is the principal supporter of the Unite Foundation, the only charity that provides a home at university for estranged and care-experienced students – see https://thisisusatuni.org/ and https://www.unitegroup.com/sustainability. Support to Stay, our innovative student support framework designed to align with universities’ processes for supporting student mental health and wider wellbeing, see https://www.unitegroup.com/sustainability. ## Environmental matters Our Sustainability framework sets out clear objectives and our progress in respect of environmental, social and governance matters, see page 43 https://www.unitegroup.com/sustainability. TCFD and CFD page 63. Our Net Zero Carbon Pathway sets out our pledge to be net zero carbon by 2030, see https://www.unitegroup.com/sustainability/our-net-zero-pathway. Energy and carbon. Full details in line with the Streamlined Energy & Carbon Reporting requirements, see page 48. Wider environmental impact details of other environmental performance metrics, targets and activity, see https://www.unitegroup.com/sustainability. Our Sustainable Construction Framework sets out our approach to the sustainable design and construction of new purpose-built student accommodation, refurbishment and retrofits. It will also inform how we procure new net zero developments, see https://www.unitegroup.com/wp-content/uploads/2023/12/Unite-Students-Sustainable-Construction-Framework.pdf. ## EPRA sBPR Further environmental, social and governance performance is also reported in line with the EPRA sBPR guidelines in our standalone Sustainability Report, see https://www.unitegroup.com/sustainability. ## Health & Safety Our Health and Safety strategy keeping people safe and secure across our operational buildings and new development sites, see page 108. ## GENDER SPLIT For more information on gender split, see our separate Sustainability Report – https://www.unitegroup.com/sustainability | | Male | Male % | Female | Female % | Total | | --- | --- | --- | --- | --- | --- | | Board | 6 | 60% | 4 | 40% | 10 | | Management | 37 | 62.7% | 22 | 37.3% | 59 | | All other employees | 1,032 | 53.4% | 899 | 46.6% | 1,938* | | Total | 1,069 | 53.7% | 921 | 46.3% | 1,997* | | *Total figure includes 7 gender undisclosed colleagues. | | | | | | ## SUSTAINABILITY REPORTING Our Sustainability Report includes detailed data in line with the European Public Real Estate Association Sustainability Best Practice Reporting Guidelines (EPRA sBPR) and in 2024 we retained Silver EPRA sBPR for FY23 reporting. Climate-related risks are disclosed in line with TCFD and CFD on page 63. We disclose sustainability data to the Global Real Estate Sustainability Benchmark (GRESB), and retained our 4-star GRESB rating in 2024. Our GRESB scorecard is available at https://www.unitegroup.com/sustainability. We achieved various ESG ratings including ISS ESG, MSCI ESG and EPRA sBPR awards as detailed in our standalone Sustainability Report. We are outside of scope of EU CSRD reporting and not planning early adoption of IFRS S1 and S2. ## STREAMLINED ENERGY AND CARBON REPORTING The following tables summarise energy consumption and greenhouse gas (GHG) emissions in line with the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013 and the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, and in accordance with the Streamlined Energy and Carbon Reporting (SECR). Reporting periods are January to December. More comprehensive data is in our Sustainability Report, and Net Zero Carbon Pathway which sets out our 2030 net zero carbon ambition and targets. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW ## Sustainability continued ### Energy consumption The table below summarises energy consumption. | Energy consumption | Units | 2019 base year | 2022 | 2023 | 2024 | Change from 2023-2024 | | --- | --- | --- | --- | --- | --- | --- | | Electricity absolute consumption | kWh | 167,593,224 | 150,944,907 | 149,704,305 | 144,685,326 | -3.35% | | Natural gas absolute consumption | kWh | 57,414,070 | 58,816,746 | 56,121,430 | 58,836,198 | 4.8% | | District heat absolute consumption | kWh | 11,775,682 | 11,672,055 | 12,090,049 | 10,261,075 | -15.1% | | Total energy absolute consumption | kWh | 236,782,976 | 221,433,708 | 217,915,784 | 213,782,599 | -1.9% | | Total energy intensity | kWh/bed | 3,233.0 | 3,059.0 | 3,100.8 | 3,085 | -0.5% | | | kWh/m² | 122.6 | 115.6 | 111.9 | 111.5 | -0.4% | | Electricity from renewable sources | % | 61.1 | 99.9 | 99.9 | 99.9 | 0.0% | Energy data reported is predominantly half-hourly meter data (98.7% and 95.1% respectively for electricity and gas), with the remainder being billing data (1.3% and 4.9%) with less than 0.1% of data estimated where neither meter or billing data is yet available, in which case the previous year's data for that site and month is used. District heating data is 100%, billing with 0% estimates. ### Greenhouse gas emissions The table below summarise absolute GHG emissions or the last three years. | Absolute GHG emissions | | Units | 2019 base year | 2022 | 2023 | 2024 | Change from 2023-2024 | | --- | --- | --- | --- | --- | --- | --- | --- | | Scope 1 | | Tonnes CO₂e | 10,669 | 10,905 | 10,410 | 10,914 | 4.8% | | Scope 2 | Location-based | Tonnes CO₂e | 44,910 | 31,204 | 33,172 | 31,800 | -4.1% | | | Market-based | Tonnes CO₂e | 18,833 | 2,052 | 2,218 | 1,867 | -15.8% | | Scope 1 & 2 | Location-based | Tonnes CO₂e | 55,579 | 42,110 | 43,582 | 42,715 | -2.0% | | | Market-based | Tonnes CO₂e | 29,502 | 12,958 | 12,628 | 12,781 | 1.2% | | Scope 3 | | Tonnes CO₂e | 148,279 | 98,475 | 84,876 | 74,166 | -12.6% | | Bed numbers (pro rata for sites only open part of year) | | | 73,240 | 72,387 | 70,277 | 69,292 | -1.4% | | Floor area (pro rata for sites only open part of year) | m² | | 1,931,148 | 1,915,339 | 1,947,292 | 1,918,164 | -1.5% | The table below summarises building-related GHG emissions intensity per m² (gross internal floor area) and per lettable-bed regardless of occupancy. | GHG emissions intensity | | Units | 2019 base year | 2022 | 2023 | 2024 | Change from 2023-2024 | | --- | --- | --- | --- | --- | --- | --- | --- | | Scope 1 & 2 by floor area | Location-based | kgCO₂e/m² | 28.8 | 22.0 | 22.4 | 22.3 | -0.5% | | | Market-based | kgCO₂e/m² | 15.3 | 6.8 | 6.5 | 6.7 | 2.7% | | Scope 1 & 2 by bed numbers | Location-based | kgCO₂e/bed | 758.9 | 581.7 | 620.1 | 616.4 | -0.6% | | | Market-based | kgCO₂e/bed | 402.8 | 179.0 | 179.7 | 184.4 | 2.6% | 48 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Total like-for-like energy consumption decreased by $3.5\%$ in 2024 driven by reductions in both like-for-like electricity consumption and district heating consumption, which fell by $5.5\%$ and $15.1\%$ respectively, despite like-for-like gas consumption increasing by $3.9\%$ . This electricity reduction was largely driven by a $\pounds 10.2\mathrm{m}$ investment during 2024 on energy efficiency measures, and measures deployed in 2023, including the latest generation LED lighting, solar PV panels and improved heating controls. District heating accounts for $< 5\%$ of our overall energy consumption and the reduction seen (reflected reduced heating demand and operational changes on site) made a limited contribution to the overall change. Overall, these changes to like-for-like energy consumption, combined with a small drop in total bed numbers from 2023, saw overall absolute energy consumption fall by $1.9\%$ compared with 2023. This is despite absolute gas consumption increasing largely due to the addition of 180 Stratford (our first BTR property). This property includes a central plant room with gas boilers that serve the 178 flats and common area and also two adjacent buildings not owned or operated by Unite Students. While tenants in these buildings pay for heat, the associated Scope 1 emissions are attributable solely to our building. This increased gas drove up Scope 1 emissions by $4.8\%$ vs. 2023. However both market-based and location-based Scope 2 emissions fell primarily due to reduced electricity consumption, driving down overall Scope 1 & 2 emissions. Absolute Scope 3 emissions fell by $14.8\%$ reflecting the reduced embodied carbon achieved at our one new build that completed in 2024. # PERFORMANCE AGAINST TARGETS Our 2030 net zero carbon target requires us to achieve a $25.5\%$ reduction in market-based Scope 1 & 2 absolute emissions in 2024 vs. 2019 base year. Our 2024 market-based Scope 1 & 2 emissions of 12,781 tonnes $\mathrm{CO}_{2}\mathrm{e}$ (a $56.7\%$ reduction vs. 2019) puts us ahead of the target. This is driven by a combination of reduced energy consumption, reduced gas consumption and electricity supply decarbonisation since 2019. ![img-53.jpeg](img-53.jpeg) Scope 1 & Scope 2 (market-based) absolute GHG emissions Our 2030 energy reduction target requires us to achieve a $28\%$ reduction in energy intensity by 2030 vs. 2019 base year (a target energy intensity of $80.9\mathrm{kWh} / \mathrm{m}^2$ ), with an interim target of $98.2\mathrm{kWh} / \mathrm{m}^2$ in 2024. 2024 performance is slightly behind this at $111.4\mathrm{kWh} / \mathrm{m}^2$ , partly due the new BTR property acquisition described above, and partially an increased heating demand in 2024. The chart below shows energy intensity compared to our current CRREM-based target and the recently updated new CRREM v2 pathway. Additional capital spend is planned for 2025 and beyond to get back on track with CRREM-based energy targets. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # PERFORMANCE REVIEW Sustainability continued ![img-54.jpeg](img-54.jpeg) Our 2030 renewable energy target is to purchase 100% renewable electricity in line with RE100 requirements. 2024 performance is on target at 99.9%, with 30% of electricity purchased via a corporate PPA and the remainder matched to unbundled renewable energy attribute certificates. Our actual new build embodied carbon continues to be ahead of the RIBA Climate Challenge targets which is a 48% reduction in embodied carbon by 2030 equating to 625kgCO₂/m². We are focusing on site selection, building design optimisation, materials selection and cutting construction site impacts to enable this our new build to achieve this target. ![img-55.jpeg](img-55.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # CALCULATION METHODOLOGY GHG emissions are calculated in accordance with the UK Government's Environmental Reporting Guidelines: including streamlined energy and carbon reporting March 2019 and the GHG Protocol's A Corporate Accounting and Reporting Standard including recent updates on Scope 2 reporting. The UK Government emission conversion factors for greenhouse gas company reporting (2024 data set) have been used to convert data from sources including utilities meters, business travel mileage, and water consumption into $\mathrm{CO}_{2}\mathrm{e}$. Location-based Scope 2 emissions are calculated using the UK national average grid emissions factor. Market-based Scope 2 emissions are calculated on an emissions factor of zero for all electricity purchased under our Unite Group supply contract which is $100\%$ certified renewable with 44MW also purchased via a corporate PPA. Further details of which reporting are in our standalone Sustainability Report. # REPORTING BOUNDARIES We report $100\%$ of energy use and GHG emissions for properties under our operational control, including properties owned by Unite Group plc and subsidiaries, and by JVs regardless of equity share. All assets are in the UK and constitute $100\%$ of our global energy use and GHG emissions. Data has not been normalised or adjusted for any factors such as occupancy or weather. Student residents pay a single all-inclusive bill, and are not charged for any energy, heat or hot water they consume; hence all energy used in our buildings contributes directly towards Scope 1 & 2 GHG emissions, rather than falling into Scope 3 emissions. Consequently, our most significant source of Scope 3 emissions is embodied carbon in new developments. # INDEPENDENT VERIFICATION Energy consumption and Scope 1 & 2 greenhouse gas emissions have been externally verified by SGS to a reasonable level in line with ISO 14064-3:2019. Environmental KPIs, have been verified to a limited level of assurance in line with ISAE 3000 (Revised). SGS's opinion statements can be viewed on our website. Due to data availability, a portion of Scope 3 emissions have been verified to a limited level assurance. ![img-56.jpeg](img-56.jpeg) ![img-57.jpeg](img-57.jpeg) # Case study ## Our approach to thought leadership Students' needs are always evolving. To understand those changes over time, we launched the Unite Students Applicant Index in 2022. The only annual research to track university applicants' attitudes and confidence levels year-on-year, the Index tells us how each year's new students feel before they arrive at university. This helps us to provide them with a Great Place to Live, and gives our $60+$ university partners and the wider UK Higher Education sector valuable insights about their students. This year, we found that more applicants were motivated by moving away from home than five years ago, as well as major differences in confidence between socioeconomic groups. In December, we partnered with the Unite Foundation to commission a report from the Social Market Foundation. Care and Learning in Higher Education looked at the barriers estranged and care-experienced young people face in going to university, and how they can be supported. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT # Proactive and resilient A challenging macroeconomic environment and geopolitical instability requires an agile approach to risk management. This also provides us with flexibility to make the most of opportunities. ## Reflecting on 2024 - Considered our long-term growth until 2030 - Laid the foundations for our new core technology and financial systems - Successfully navigated the impacts of macroeconomic factors on our strategy - Shaped our future resilience through development of our people and teams - Enhanced our IT infrastructure and security ## Our priorities for 2025 - Increase efficiency with new technologies - Consider risks and mitigations for our strategic objectives - Continue to assess the impacts of macroeconomic factors on our financial and operational performance ![img-58.jpeg](img-58.jpeg) ## GOVERNANCE The Board maintains oversight of risk. It maintains a robust risk management framework and internal control system. The Audit & Risk Committee supports the Board by receiving assurance reporting, reviewing the effectiveness of risk management and internal control processes. Our risk management framework enables the Board to clearly identify risks, assess our risk profile and set risk appetite, ensuring risks are managed and mitigated transparently and effectively. This includes being agile and resilient to macroeconomic and geopolitical challenges. ## RISK MANAGEMENT Our risk management approach combines a top-down strategic analysis with a bottom-up operational view. The output is a number of strategic risks under seven principal categories. The Board conducts a twice-yearly dedicated risk review. As part of this, it undertakes an assessment of the principal Group risks, including those emerging risks that would threaten our business model, future performance, solvency or liquidity as well as the Group's strategic objectives. The Board considers both internal and external factors when assessing our risks. During 2024, we also considered our long-term strategic aims and assessed both the opportunities and risks. Alongside this, the Board also considered emerging risks and their potential impact upon the business. 52 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-59.jpeg](img-59.jpeg) ## MIKE BURT ## CHIEF FINANCIAL OFFICER Looking ahead to 2025, we have considered macroeconomic and political factors when assessing our principal risks: - Geopolitical instability, including the war in Ukraine, the conflict in Gaza, increasing tensions in the Middle East and potential political uncertainty during the next US presidential term - Levels of inflation remain above the Bank of England's target, delaying reductions in interest rates in the short to medium term - The UK Government's upcoming reviews of international students and Higher Education funding during 2025 - An uncertain labour market with a relatively low unemployment rate of 4% but decreasing numbers of job vacancies. These external factors impact our risk profile to varying degrees and we have seen an impact in certain areas (such as the cost of funding and recruitment), while others are still emerging. Our year-end assessment of risk considered how these external factors have impacted us and the action we are taking to mitigate them. ## OUR RISK APPETITE The Group's risk appetite is considered a fundamental part of the Board's strategy setting and annual budget. This is underpinned by our aim to be a responsible and resilient business while delivering for our customers, employees and universities with attractive returns for our shareholders. Twice yearly, the Board reviews and assesses our risk appetite with a primary focus on the resilience of the business and its agility. This considered both threats to, and opportunities in, our business as well as wider macro risk developments impacting the PBSA sector, Higher Education, property market and economy. We provide flexibility in our risk appetite across individual objectives. As a Group, we maintain a cautious risk appetite, broadly unchanged from the previous financial year. While the impact of inflationary pressures is reducing, other macroeconomic factors and political stability are extant, and the Board continues to take a prudent approach to both risk and opportunity. ## STRESS TESTING/SCENARIO PLANNING AND OUR STRATEGIC PLAN Each year, the Board develops and refreshes the Group's Strategic Plan. This is based on detailed three-year strategic/financial projections (with related scenario planning) and rolls forward for a further two years using more generic assumptions. The Board maps our strategic objectives against our risk profile, identifying risk events that could prevent or delay us meeting our strategic objectives. Then, always conscious that risk events do not necessarily happen in isolation, the Board stress tests these projections against combinations of the identified risk events. Through this process, a base case and stress-tested Strategic Plan are developed. During 2024, this scenario planning continued to closely monitor external factors, and the Board developed a wide range of scenarios and stress tests to assess our preparedness and ability to withstand adverse market conditions. > “Viewing our operational and strategic objectives through the optic of both risk and opportunity ensures we can take informed and effective decisions, to protect and build value for all our stakeholders.” THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued ## FRAUD RISK We consider the risk to asset misappropriation, fraudulent statements and corruption, alongside the Failure to Prevent Fraud Act (effective 1 September 2025). The Group's internal controls and risk management processes work in tandem to minimise the likelihood of fraud within the business. The controls in place are designed to minimise the opportunity, motivation and rationalisation for individuals to find opportunities to commit fraud. Our IT and financial systems are designed with segregation of duties to ensure individuals cannot override management controls of end-to-end processes. Internal audit undertakes independent audits across both operational and financial aspects of the business to independently verify that controls are operational and would report any instances of fraud. ## A CORPORATE CULTURE FOR RISK MANAGEMENT The Group's risk management framework identifies principal and emerging risks, ensures that they are appropriately monitored, controls are in place and required actions have clear ownership. Identified emerging risks are monitored by the velocity of change in risk score. The organisation has an open and accountable culture, with an experienced leadership team. This culture accepts that risk is inherent in business and encourages an open and proactive approach to risk management. By viewing our risks through the lens of our strategic objectives, the Group ensures a proactive and preemptive approach, rather than tick box one. ## RISK MANAGEMENT FRAMEWORK The Board has the overall responsibility for the governance of risks and ensures there are adequate and effective systems in place. ## Integrated risk management approach | | Board, Audit & Risk, Sustainability and Health & Safety Committees | Executive Committee, Customer and Property Leadership teams | Business units | | --- | --- | --- | --- | | STRATEGIC | Review external environment | Identify principal risks, including emerging risks | Execute actions | | | Assess risks (including emerging risks) | Deliver actions in line with risk appetite | Report on risk indicators | | | Set risk appetite and determine actions | Monitor risk indicators | | | OPERATIONAL | Assess risk management and internal control systems | Consider completeness and adequacy of risk identification and mitigation actions, and risk exposure aggregation | Report current and emerging risks | | | Report on risks and uncertainties | | Identify, evaluate and mitigate operational risks | | | Internal audit Assure risk management effectiveness and internal control testing | | | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # Our risk management framework The Board has the overall responsibility for the governance of risks and ensures there are adequate and effective systems in place. It does this in various ways: ## THE BOARD Risks and opportunities assessed as part of strategy setting; annual budget and risk oversight is owned by the Board and its Committees. Twice-yearly formal risk review and ongoing monitoring of existing and emerging risk integral to Board meetings. ## RISK MANAGEMENT Risk management and assurance framework overseen by the Audit & Risk Committee. Detailed risk registers are developed and regularly updated by our four Performance Teams. The Executive Committee reviews and challenges these risk registers and related risk and opportunity; it considers emerging risks that the Group is facing or should consider and then brings these to the Board for its detailed assessment of these risks. ## POLICIES AND CONTROLS Policies and controls underpin our risk management framework (such as Capital Operating Guidelines, Treasury Policy, Investment Committee and the internal control frameworks). Risk assurance is provided through external and internal auditors, as well as specialist third-party assurance, where appropriate. ## PEOPLE AND CULTURE Embedded risk management culture. Openness, transparency and clear ownership of risk management cascades through the organisation. Supported by risk registers and workshops to identify existing and emerging risks. # Our key risk indicators for our strategic objectives | **GREAT PLACE TO LIVE** Safety Customer Satisfaction HE Trust | **GREAT PLACE TO WORK** Employee engagement Staff retention levels | **GREAT PLACE TO INVEST** Gross asset value Asset age Occupancy Rental growth % nominations | | --- | --- | --- | 55 --- STRATEGIC REPORT # RISK MANAGEMENT continued PRINCIPAL RISKS SUMMARY HEATMAP | | RISK APPETITE | Average | Minimal | Cautious | Flexible | Open | | --- | --- | --- | --- | --- | --- | --- | | | INHERENT RISK LEVEL | Very Low | Low | Medium | High | Critical | | | RESIDUAL RISK LEVEL | Very Low | Low | Medium | High | Critical | | 1 | A reduction in demand driven by geopolitical factors | | ● | ● | | | | 2 | A reduction in demand driven by macroeconomic conditions, customer value-for-money considerations and affordability | | | ● | ● | ● | | 3 | Increase in supply; as a maturing sector, new entrants to the market will increase competition and could lead to a loss of market share | | | ● | | ● | | 4 | Major health and safety (H&S) incident in a property or a development site | | ● | | | ● | | 5 | Inability to secure the best development sites on the right terms, at a suitable level of return on investment | | | ● | | ● | | 6 | Schemes are delivered late and/or over budget impacting our financial returns and damaging our reputation with students | | ● | | ● | ● | | 7 | Loss of talent and capability, lack of strategic leadership capability and meeting changing DEIBW requirements | ● | ● | ● | | | | 8 | Failure to meet external, public commitments, regulatory and reporting requirements made in respect of sustainability | | ● | | ● | | | 9 | Failure to mitigate or prepare for the impact of climate change | | | ● | | ● | | 10 | Significant loss of personal or confidential data, disruption to corporate systems either through cyber-attack or internal theft/errror | | | ● | | ● | | 11 | Borrowing costs rise rapidly or inability to obtain funding at cost within risk appetite | | ● | | | ● | | 12 | Internal controls are exploited to allow individuals to gain from asset misappropriation, fraudulent statements and corruption | ● | ● | | | ● | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Risk key 1 Increased > No change 4 Decreased # SUMMARY OF PRINCIPAL RISKS AND UNCERTAINTIES The table that follows describes the Group's principal risks and uncertainties, and explains how these are managed or mitigated. # PRINCIPAL RISK # Market risk 1. Objective: Maintain a diverse customer base to reduce exposure in key demographic sectors Risk: A reduction in demand driven by geopolitical factors | Events that may trigger the risk | Potential impact | How we monitor and mitigate | | --- | --- | --- | | • Immigration policy changes affecting international students. • Travel restrictions placed on international students by their own government. | • Loss of income. • Reduction in demand affecting yield and asset values. | • Government dialogue. • Ongoing monitoring of Government HE and immigration policy. • Develop markets with students in new countries to diversify risks. • Strong domestic customer base and nomination relationships with universities. | 2. Objective: Maintain our property portfolio to a high standard to ensure enduring relationships with the high- and mid-ranked universities, and consistently drive sales performance Risk: A reduction in demand driven by macroeconomic conditions, customer value-for-money considerations and affordability | Events that may trigger the risk | Potential impact | How we monitor and mitigate | | --- | --- | --- | | • Lack of investment in the quality of our product offering. • Increases in commuter students; more students living at home. • Increased regulation over rents. • London weighting on loans and grants removed. | • Loss of income. • More competition and reduced demand for year-round student accommodation in the longer term resulting in lower profitability and asset values. | • Asset management of our properties, to identify and improve the experience for students. • Estates five-year strategy being developed to protect and enhance our portfolio. | 3. Objective: Build and maintain a sector-leading offer for our customers Risk: Increase in supply; as a maturing sector, new entrants to the market will increase competition and could lead to a loss of market share | Events that may trigger the risk | Potential impact | How we monitor and mitigate | | --- | --- | --- | | • Well-funded competitors improving their offer and service. • Unite Students fails to invest in its brand. • Unite Students does not keep pace with customer expectations. | • More competition for the best sites. • Potential impact on rental growth and occupancy. • Reduced revenue and increased costs associated with part filled accommodation. | • Disciplined investment approach to markets with demand/supply imbalance. • Exposure to the best universities with our new developments secured with nomination agreements. • Geographically diverse portfolio. • Broad range of product and price offerings. • Long-term partnership arrangements with universities. • Actively driving differentiation through our brand investment and promises. | Reason for the change in risk profile: Our development pipeline is the strongest it's been for several years. This rate of growth will strengthen our offering, ensuring customers have an increased choice of quality buildings in suitable locations. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued ## Risk key - ☐ Increased - ☐ Decreased - ☐ No change ## PRINCIPAL RISK ### Operational risk #### 4 Objective: Minimise the risk of an incident that could impact the safety of our customers, contractors and employees **Risk: Major health and safety (H&S) incident in a property or a development site** | Events that may trigger the risk | Potential impact | How we monitor and mitigate | | --- | --- | --- | | • Catastrophic fire, flood or other incident at a property. • Incident at construction site involving Unite Students' employees or third-party contractors. | • Fatality or serious injury. • Reputational damage and loss of trust in Unite Students as a reliable partner. • Disruption to occupation of buildings. | • Business continuity plans. • Board-supervised Health & Safety Committee in place. • Highly skilled and experienced H&S team in place. • Operational Performance Team focus on H&S. • Expert external assurance on development safety risk. • Visible leadership for Safety & Wellbeing driven by our senior leaders. • Use of audits and external consultants. • Cladding programme to remediate facades, where appropriate. | **Reason for the change in risk profile:** When benchmarking RIDDOR incidents there is a very low rate of occurrence. The Health and Safety team has been strengthened, increasing the performance within the second line of defence. Our main contractors understand our ways of working and safety focus. ## PRINCIPAL RISK ### Property risk #### 5 Objective: Deliver a suitable development pipeline **Risk: Inability to secure the best sites on the right terms, at a suitable level of return on investment** | Events that may trigger the risk | Potential impact | How we monitor and mitigate | | --- | --- | --- | | • Challenging planning environment, including increased regulation in construction design. • Land scarcity and increased competition for the best sites. • Further increases in borrowing costs. | • Abortive costs where schemes are not delivered. • Inability to deliver targeted earnings growth and total accounting return. | • Defined limits for abortive costs on each project and contracts structured as subject to planning or options to ensure downside protection. • Consult and lobby at a national and local level to promote the benefits of student accommodation. • Comprehensive due diligence is completed on sites prior to purchase, including seeking a pre-application assessment from the relevant local authority. • Clear planning and stakeholder consultation programme. • Using mixed use sites strategically to gain positive outcomes. | 58 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- PRINCIPAL RISK Property risk # 6 Objective: Deliver schemes on time and to budget Risk: Schemes are delivered late and/or over budget ## Events that may trigger the risk - Delays or failure to achieve planning consent or approval from the Build Safety Regulator. - Construction risk – build cost inflation due to increasing construction demand. - Construction execution risk – delivery delays impacting labour/materials coming from outside the UK or failure of a contractor or major subcontractor. - Climate risk – physical, regulatory and transactional risks associated with climate change and the environmental impact of our development activity. Reason for the change in risk profile: The Building Safety Act has introduced gateways prior to the start of construction and occupation of high-risk buildings; these gateways are expected to add around six months to development programmes. Additional time has been built into development programmes to mitigate this effect. ## Potential impact - NTA and EPS affected by deferred schemes and/or reduced financial returns. - Reputational impact of delivering a scheme late, leaving students without accommodation. - Increases in construction costs as we seek to reduce the carbon intensity of our developments and comply with building regulations. ## How we monitor and mitigate - Experienced development team with strong track record of delivery. - Strong relationships with construction partners. - Group Board approval for commitments above a certain threshold. - Financial investment in schemes carefully managed prior to grant of planning. - Detailed due diligence before site acquisition. - Build cost inflation regularly appraised and refreshed. - Engagement with our supply chain regarding future reductions in embodied carbon through our development activity. PRINCIPAL RISK People risk # 7 Objective: Retain a high performing workforce with suitable succession plans and a focus on Diversity, Equality, Inclusivity, Belonging and Wellbeing (DEIBW) goals Risk: Loss of talent and capability, lack of strategic leadership capability and meeting changing DEIBW requirements ## Events that may trigger the risk - Lack of leadership development. - Lack of managed succession planning and opportunity for career advancement. - Ad hoc/uncoordinated training plans. - Lack of or poor performance management. - An insufficient pool of diverse and capable people. - Cost-of-living crisis driving wage inflation, inhibiting recruitment and staff wellbeing impacts. - Changes to legislation surrounding DEIBW. ## Potential impact - Inability to deliver business strategy in next five years. - High attrition rates, increasing costs. - Reputational impact of not meeting diversity and inclusion targets. - Loss of capability and knowledge from the business impacting on service levels. - Increased recruitment and wage costs. - Decreased employee engagement and subsequent increases in attrition rates. ## How we monitor and mitigate - Highly skilled and experienced people in leadership team. - Academy team providing training coordination and centralised tracking to ensure consistency. - Performance framework refreshed and relaunched. - Culture Matters engagement forum providing direct feedback from employees. - Talent review process for succession planning for key roles. - Bi-annual employee engagement survey and action plans. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued ## Risk key - ☐ Increased - ☐ Decreased - ☐ No change ## PRINCIPAL RISK ### Sustainability risk **8** Objective: To meet external public commitments and regulatory requirements made regarding ESG Risk: Failure to meet external public commitments, regulatory and reporting requirements made in respect of sustainability **9** **Events that may trigger the risk** - Lack of understanding of commitments. - Lack of understanding of regulatory requirements. - No clear plan to deliver. - Lack of stakeholder engagement. - Increased reporting burden. **Potential impact** - Fines/penalties for non-compliance. - Brand damage/loss of revenue. - Loss of investor confidence. - Increased costs. - Credit ratings downgraded. - Increased costs through sustainability-linked debt. **How we monitor and mitigate** - Formal business policies regularly updated. - Effective communication and reporting internally and externally. - Ongoing stakeholder consultation on strategy. - Governance structure in place with clear Board oversight. - Monitor performance against key ESG frameworks (GRESB, CDP, FTSE4Good, MSCI). ## PRINCIPAL RISK ### Sustainability risk **9** Objective: Mitigate or prepare for the impact of climate-related physical and transition risks Risk: Failure to mitigate or prepare for the impact of climate change **9** **Events that may trigger the risk** - Extreme weather events which we are not ready to mitigate. - Increasing legislative burden. - Volatile and unpredictable energy, carbon and water costs. - Increasing stakeholder expectation. - Insufficient prioritisation of investment. - Supply chain risks. **Potential impact** - Damage to property. - Injury to people. - Disruption to supply chain. - Increased insurance costs. - Increased capital costs. - Compensation payments. - Regulatory action/fines/penalties. - Brand damage/revenue loss. - Loss of investor confidence. - Asset stranding/value write-downs; inability to dispose of assets that do not meet regulatory compliance standards. **How we monitor and mitigate** - Procurement decisions consider environmental and climate change performance. - Asset transition plans and capital initiatives to address stranding risk. - Utilities purchasing strategy: 100% energy attribute certificate-backed renewable electricity. - Incident management plan to react to extreme weather incidents. - Proactive horizon scanning for legislative updates/changes. - Governance structure in place with clear Board oversight. - Monitor performance against key ESG frameworks (GRESB, CDP, FTSE4Good, MSCI). THE UNITE GROUP PLC Annual Report and Accounts 2024 --- PRINCIPAL RISK Technology risk 10 Objective: Maintain and enhance a secure IT environment that discourages attacks, and informs us when issues have been detected and provides us with greater operational capacity Risk: Significant loss of personal or confidential data, disruption to corporate systems either through cyber-attack or internal theft/error Events that may trigger the risk - Threat actors attempting to compromise systems through social engineering, prolonged remote attacks or physical access. - Changes to operational design, bringing requirements for improvements to digital infrastructure. Potential impact - Significant loss of personal or confidential data or disruption to the corporate systems. - Reputational and/or financial damage with increased scrutiny including sanctions and fines. - Reduced benefits from operational efficiencies. How we monitor and mitigate - Defined governance structure for information security. - Technical security controls aligned to SANS CIS Critical Security Controls. - Security operations centre and security incident & event management. - Full suite of awareness activities. - Agreed Information Security strategy & technical security roadmap. - Information security and data protection policies in place. - Scheduled internal phishing campaigns. PRINCIPAL RISK Financial risk 11 Objective: Manage our balance sheet liquidity within tolerable levels and maintain compliance with our debt covenants Risks: Borrowing costs rise rapidly or inability to obtain funding at cost within risk appetite Events that may trigger the risk - Geopolitical factors influencing market sentiment. - External factors reduce access to capital markets. - Significant reduction in revenue, or other adverse business event, affecting market perception. - Significant reduction in property valuations or increase in debt. Potential impact - Increased financing costs leading to reduced profitability and property values (through resulting expansion of valuation yields and lower valuations). - Forced sales below valuation. - Slowdown in development. - Breach of covenant leading to default followed by repayment demand. How we monitor and mitigate - Movements in interest rates and the impact of different outcomes are considered at the Funding Committee. - Funding strategy is approved by the Board annually. - Minimum hedge ratio of 75% is defined in the capital operating guidelines (COGs); most debt is fixed rate or hedged with swaps or caps. - Revolving credit facility to provide liquidity headroom. - Maintaining a good relationships with lenders. - Management of balance sheet ratios in compliance with COGs. - Monitoring of covenants across a range of income scenarios and risks. - Regular monitoring of ICR covenants by the Funding Committee (six-monthly monitoring). Reason for the change in risk profile: Inflation has peaked, falling back through 2024. Although indications are that funding costs will remain high, due to interest rates not falling back as quickly as expected, we have limited exposure with suitable hedging in place. 12 Objective: Maintain adequate controls to minimise the likelihood of fraudulent activity Risk: Internal controls are exploited to allow individuals to gain from asset misappropriation, fraudulent statements and corruption Events that may trigger the risk - Deficiencies in control design. - Inadequate segregation of duties. - Employee disengagement or external motivation to act contrary to our values. Potential impact - Loss of assets or funds. - Significant loss of personal or confidential data or disruption to the corporate systems. Reason for the change in risk profile: Movement away from legacy systems has removed a number of manual processes and introduced automation which decreases the likelihood of fraudulent activity. How we monitor and mitigate - Independent verification of year-end account by our external auditors. - Internal audit programme to review internal control of high risk areas to the business. - Documented segregation of duties within IT and financial system. - Improved financial system in testing phase. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued ## VIABILITY STATEMENT The Directors have assessed the viability of the Group over a three-year period to December 2027, taking account of the Group's current position and the potential impact of its principal risks. The Directors consider the three-year lookout period to be the most appropriate, as this aligns with the Group's own strategic planning period combined with the levels of planning certainty that can be derived from the development pipeline. The Directors believe that UK universities will continue to experience strong demand from UK students as a result of strong demographic growth in the period to 2030 and the UK's leading HE sector continues to attract students from around the world. The Group has an annual business planning process, which comprises a Strategic Plan, a financial forecast for the current year and a financial projection for the forthcoming three years (which includes stress testing and scenario planning and also rolls forwards for another two years). This plan is reviewed each year by the Board as part of its strategy setting process. Once approved by the Board, the plan is cascaded across the Group and provides a basis for setting all detailed financial budgets and strategic actions that are subsequently used by the Board to monitor performance. The forecast performance outlook is also used by the Remuneration Committee to establish the targets for the annual and longer-term incentive schemes. To stress test the viability of the business, a viability scenario was prepared using the Group's Strategic Plan as a base. The key viability assumptions were: - Rental growth reduced to 1% p.a., reflecting principal risks 1–3 - Cost growth of 5% p.a., allowing for further sustained increases in utility and other costs - A 50bps increase in property valuation yields, translating to approximately a 10% decline in asset values - Interest costs of 7% on all new debt and refinancing activity, reflecting principal risk 11 - No further development commitments, disposals or acquisitions, reflecting principal risks 5 and 6. The result of this scenario showed a significant deterioration in forecast performance, with earnings and NTA significantly reduced (to 45.5p and 943p respectively) in 2027 while LTV increased substantially to 35.8%. Despite the significant contraction in the size of the business over the forecast period, the business would remain viable under such a scenario. We also considered whether the Group's climate change principal risk would impact our assessment of the Group's viability but concurred that as we have an ongoing programme of capital investment to achieve our science-based net zero target by 2030, this mitigated the risk sufficiently for this viability assessment. Following visa policy changes in 2024, aimed at reducing net migration, the UK is less attractive for international postgraduate taught students who can no longer bring dependent family members to the UK. However, we have experienced limited impact from the changes as our rooms are single occupancy. The Group achieved 97.5% occupancy for the 2024/25 academic year and has an encouraging outlook for 2025/26. International student demand is not expected to impact the longer-term viability of the Group. The financing risks of the Group are considered to have the greatest immediate potential impact on the Group's financial viability. The three principal financing risks for the Group are: - short-term debt covenant compliance - the Group's ability to arrange new debt/replace expiring debt facilities - any adverse interest rate movements. To hedge against the potential of adverse interest rate movements, the Group manages its exposure with a combination of fixed rate facilities and using interest rate swaps for its floating rate debt. During the year, the Group has complied with all covenant requirements attached to its financing facilities and expects to continue to do so. The outlook and future prospects beyond the viability period for the business remain strong, reflecting the underlying strength of student demand, our alignment to the strongest universities and the capabilities of our best-in-class operating platform. There are significant growth opportunities for the business created by the ongoing shortage of high quality and affordable purpose-built student accommodation; universities need to deliver an exceptional student experience through their accommodation and the growing awareness of the benefits of PBSA among non-first-year students. Emerging risks to the outlook and prospects are identified and assessed through our broader risk management process. Based on their assessment and the mitigating actions available, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to December 2027. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # CLIMATE-RELATED FINANCIAL DISCLOSURES The Board recognises the urgent need to take climate change action given the scale of the challenge and potential impact. With domestic properties responsible for c.25% of carbon emissions in the UK, we recognise our responsibility to minimise our footprint and encourage our customers to do the same. Sustainability presents risks and opportunities which are managed in accordance with our overall risk management framework (see page 55) with climate risk specifically identified as a discrete standalone risk. A comprehensive disclosure on climate-related risk is included below, aligned to the Task Force on Climate-related Financial Disclosure (TCFD) and UK Climate-related Financial Disclosure (CFD) Regulations requirements. ## CFD AND TCFD COMPLIANCE STATEMENT This section aligns with the mandatory CFD framework in The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. Disclosures are consistent with Department for Energy Security & Net Zero's mandatory guidance and HM Treasury's TCFD-aligned guidance. We comply with all CFD and TCFD recommendations, including governance, strategy, risk management, targets, and metrics. We plan to improve our climate-related risk management and disclosures using up-to-date scientific data. The disclosure is consistent with the requirements of the Financial Conduct Authority's UK Listing Rule 9.8.6(R)8(TCFD). ## CFD AND TCFD DISCLOSURE The Board has approved a pathway to achieve net zero carbon by 2030 underpinned by science-based carbon targets which have been validated by the SBTi as being aligned with a 1.5°C limit to warming. We aim to increase building energy efficiency and support sustainable living habits. This commitment is shared by investors, customers, suppliers and employees. Our sustainability strategy includes SBTi carbon reduction targets, an energy efficiency target in line with the CRREM 1.5°C trajectory, and a commitment to source 100% renewable electricity by 2030 under the RE100 initiative. In 2024, we refreshed our climate scenario analysis to prepare for and mitigate climate impacts while identifying opportunities. Our Net Zero Carbon Pathway, part of the TCFD Strategy (b) disclosures, is on our website. Since 2020, we have engaged with stakeholders to focus on climate-related critical issues and report accordingly. In 2024, we updated investors on our climate performance and priorities, incorporating their feedback into our sustainability strategy. The Board also considers feedback from students, universities, employees, and local communities to ensure focus on material issues. ## GOVERNANCE Our Chief Executive has overall responsibility for climate-related risks and opportunities, with the Sustainability Committee, a sub-committee of the Board, overseeing climate-related issues. The Committee meets quarterly, reviewing progress towards our 2030 net zero carbon target, climate risk, and performance. See the Sustainability Committee Report on page 106. The Board conducts a formal risk review twice a year (see page 55), which includes climate-related risks. These risks and opportunities are integrated into business planning and investment cases to the Investment Committee, Executive Committee, and Sustainability Committee. This ensures management and the Board are aware of risks and can incorporate them into their planning. Full responsibilities for managing climate-related risks are outlined on page 64. The annual budget for sustainability investments is reported separately, with monthly performance reviews. Several climate and sustainability metrics contribute to overall remuneration. The Remuneration Committee has set sustainability-related performance objectives that form part of both the employee-wide bonus scheme, and the Executive Director's long-term incentive plan (LTIP) as detailed in the Remuneration Committee report on page 113, which covers performance against 2024 bonus targets. The Sustainability Committee receives updates on best practice, market expectations and climate-related developments from internal and external experts, including advisors, investors, and supply chain partners. Board members also enhance their understanding of climate-related risks through involvement with other businesses. ## STRATEGY Climate change is a principal risk for Unite Group that could impact our business in the short, medium, and long term. Our ambition and plans to transition to net zero carbon by 2030 are set out in our Net Zero Carbon Pathway, https://www.unitegroup.com/wp-content/uploads/2021/12/38271_UniteStudents_NetZero.pdf. We face acute and chronic physical risks from climate change, such as extreme weather and flooding. Transitioning to a low-carbon economy presents risks, including shifts in consumer preferences, impacts on property valuations based on climate resilience and energy performance, and evolving regulations. These challenges also present opportunities, as our sector leadership may enhance financial performance and lead to benefits such as reduced winter heating due to climate change effects. All our assets are in the UK, so only UK-specific physical risks are considered. The risk management process is detailed in the Risk Management section on page 54. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT KEY Informing Reporting # RISK MANAGEMENT continued # ORGANISATIONAL STRUCTURE AND RESPONSIBILITIES FOR MANAGING CLIMATE-RELATED RISKS ## UNITE GROUP PLC BOARD - Ultimate responsibility for setting Unite Group strategy, prioritisation of activities and capital allocation. - Provides challenge to management on target setting and performance. - Ensures Unite Group maintains an effective risk management framework, including climate-related risks and opportunities. The Board delegates specific climate matters to its Committees: | SUSTAINABILITY COMMITTEE | REMUNERATION COMMITTEE | AUDIT AND RISK COMMITTEE | | --- | --- | --- | | - Four meetings in 2024. - Oversees development and implementation of our Sustainability Framework and recommends any changes to the Board. - Reports progress to the Board quarterly with input from across the Group. - Chaired by Dame Shirley Pearce with two Non-Executive Director members. - Attended by Group Chair, CEO, CFO, Head of Sustainability and Group People Director. | - Three meetings in 2024. - Chaired by Nicky Dulieu with three Non-Executive Director members. - Engages with shareholders to inform target setting, including climate-related objectives. - Supports the Sustainability Framework by aligning remuneration and incentive targets to the strategy. | - Five meetings in 2024. - Chaired by Ross Paterson with three Non-Executive Director members. - Ensures climate-related risks and opportunities are identified, assessed, then effectively mitigated and managed as part of overall risk management framework. - Oversees preparation of Unite Group’s financial disclosures, including TCFD, and the Annual Report. | ## CHIEF EXECUTIVE AND EXECUTIVE COMMITTEE The Chief Executive is ultimately responsible for managing climate risk, realising climate opportunities and implementing the Sustainability Strategy with support from the Executive Committee. The Executive Committee reviews the annual business plan, and long-term Strategic Plan for Unite Group, which covers all aspects of performance including climate risks and opportunities, ahead of recommending it to the Board. On a monthly basis, the Executive Committee reviews actual and forecast performance, including climate-related performance as appropriate, taking action to improve wherever necessary, and reports this progress to the Board. | PORTFOLIO PERFORMANCE TEAM | INVESTMENT PERFORMANCE TEAM | OPERATIONS PERFORMANCE TEAM | | --- | --- | --- | | - Chaired by the Group Asset Management Director until September then the Chief Operating Officer on an interim basis. - Manages climate risk and opportunities in investment decisions, such as improving EPC ratings and energy performance of existing properties. - Manages sustainability investment performance against budgets for the Unite Group, including consideration of climate-related risks and issues in investment opportunities. | - Chaired by the Group Development Director, responsible new property-related investment. - Manages climate risk and opportunities with regards to potential development sites. - Tasked with reducing embodied carbon and improving operational energy performance of developments, in line with our 2030 net zero carbon target. | - Chaired by the Group Operations Director, responsible for operating the investment property portfolio. - Address climate risks and opportunities through improved operational management of buildings and education of student customers. - Ensures plant is properly maintained to operate at designed energy efficiency. - Identifies opportunities to secure low-carbon energy through Power Purchase Agreements. - Reviews, monthly, detailed financial performance relating to energy use, taking actions to mitigate variance from approved budget. | ## SUSTAINABILITY TEAM - Led by the Head of Sustainability, a dedicated team with operational responsibility for coordinating the implementation of the Sustainability Framework. - Head of Sustainability regularly reports progress to the Portfolio and Operations Performance Teams, Executive Committee and attends Sustainability Committee meetings. - Responsible for developing asset transition plans, implementing energy and carbon reduction capital projects, ensuring EPC and wider energy and climate-related compliance. - Produces reporting on climate-related and sustainability performance. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-60.jpeg](img-60.jpeg) # CLIMATE-RELATED RISKS AND OPPORTUNITIES TABLES Climate change is one of the principal risks facing Unite Group and risks and opportunities are identified, assessed and managed at a Group level covering all assets and operations. Climate risk modelling is undertaken every three years, last completed in 2024. ## Time periods Short term: 0-3 years - Our highest confidence forecasts including the detailed annual budget and subsequent two years where we have significant visibility in our Business Plan. Medium term: 3-10 years - Covers the period to our 2030 net zero carbon target, asset transition plans and other regulatory deadlines such as EPC B in 2030 and the useful life of building fit out. Long term: 10-30 years - The period beyond our forecasting and planning horizon and the age where PBSA can begin to face obsolescence without investment. ## Risk & opportunities ### Acute physical #### Description Under all scenarios, we may experience an increase in the frequency and severity of overheating. This could necessitate temporary measures such as additional ventilation or cooling, providing alternative accommodation for the most affected customers, or even closing some rooms for periods without significant adaptations including reducing solar gain, modifying the building fabric or altering building services. Further research is required to understand specific risks and necessary adaptations for each asset. This will help inform long-term asset management plans, budgets, and strategic investment decisions. #### Flooding (risk) Flooding can affect our properties, leading to temporary operational disruptions, damage to the assets and, in extreme cases, temporary closure and the relocation of occupants. Also, operations could be impacted by flooding in other areas, which might disrupt supply chains or communications. Under all scenarios (1.5°C, 2°C and +4.°C), there is an increase in the likelihood and severity of flooding. Further analysis is needed to understand how this risk may be mitigated through local flood defence measures. #### Heat Reduction (opportunity) As winter temperatures rise due to climate change, buildings are likely to use less energy for space heating across all future climate scenarios. Warmer winters will reduce the need for heating to maintain comfortable indoor temperatures. This decrease in heating demand will be more pronounced in regions that currently experience colder climates such as the northern parts of the UK. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued CLIMATE-RELATED RISKS AND OPPORTUNITIES TABLES CONTINUED | Risk & opportunities | Acute physical | | | | --- | --- | --- | --- | | | Heat Stress (risk) | Flooding (risk) | Heat Reduction (opportunity) | | Impacts | Under all future climate scenarios, the number of properties at risk of overheating increases in response to the local temperature increase. Regional variances across all scenarios means that individual asset risk varies. Further work is needed to understand asset-specific risks and adaptations, which will inform long-term asset management plans, budgets, and strategic investment decisions. | Flood risk can cause physical damage to buildings, harm to occupants, and loss of income from closed properties. The capital costs of repairing the damage and rehousing occupants can be significant. Also, floods can lead to wider operational disruptions, affecting business continuity and operations. These may influence how and where assets are developed and maintained. | We understand the properties with a potential for lower heating costs and this will be factored into future projections for energy performance. | | Time period | S M L | S M L | S M L | | Financial risks and opportunities | At present, the financial implications of the overheating risks cannot be accurately estimated. In 2025, we intend to identify the appropriate responses and analyse in more detail the building types at risk of overheating to determine a clearer picture of the financial risks to the business. However, we can estimate that around £15 million of summer short-term lettings income could be at risk from buildings not being able to be let during summer months. | Our assessment of the number of properties at high risk of flooding, now and in future, across the different scenarios, shows indicative costs of flooding of between £3.3m – £37.8m covering the years up to and including 2050. The risk from flooding is non-linear with temperature increases for each individual asset but across the portfolio as a whole, there is a correlation with temperature increase. Local flood defence and other mitigation efforts are not included in this assessment at present. | The savings from the reduced heat demand due to warmer winters have been estimated at between c.£0.8m and £1.7m per year across the portfolio based on current use and prices. | | Scenario methodology | We compared current summer temperatures to areas currently identified as at risk of overheating from part O of the building regulations to establish a baseline for overheating risk. We then forecast summer temperatures under 1.5°C, 2°C and +4°C 2050 scenarios to project which areas would be subject to similar temperatures and so at risk of overheating. More detailed asset-specific analysis is planned for 2025 to assess factors including fabric, ventilation, solar gain and internal heat gains, to identify potential adaptations. | Current flood risk assessment for all assets was undertaken and this was then compared to the Environment Agency long-term flood risk maps and forecast winter rainfall under 1.5°C, 2°C and +4°C scenarios using RCP8.5 projections versus the 1981–2010 baseline (UKCP18 data from the Met Office Hadley Cell GCMs HadREM3-GA705). We assessed the increased risk of flooding and the related damage to our buildings based on the impact of previous flooding events in our buildings. | We compared current energy use across the portfolio for space heating with the likely reduction in Heating Degree Days under 1.5°C, 2°C and +4.°C scenario for each asset. This enabled the identification of reduced energy consumption patterns and heating costs under each scenario across regions and asset-specific potential reductions. | | Mitigation and adaptation activities | A more detailed analysis of overheating risk is scheduled for 2025. This analysis will guide future capital and asset management plans to ensure the risk is fully quantified and effectively mitigated. New development projects and larger asset management programmes are designed to maintain appropriate temperatures. | We have flood response plans in place for properties at higher risk. In addition, our properties are insured against losses from flooding. | We understand the properties with a potential for lower heating costs and this will be factored into future projections for energy performance. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- CLIMATE-RELATED RISKS AND OPPORTUNITIES TABLES CONTINUED | Risk | Transition | | | | | --- | --- | --- | --- | --- | | | Technology | Reputation | Policy and legal | Market risk, commodity and resource efficiency | | Description | Risk that an individual asset's performance may not improve sufficiently or quickly enough to meet the demands of transitioning to a low-carbon economy. | Failing to support stakeholders, or meet expectations, the low carbon transition could see adverse reputational impacts and challenge our ability to form lasting partnerships with university partners, students and investors. | Regulations and government policies will continue to evolve, raising minimum standards for building performance and other requirements to accelerate the transition to net zero carbon. | We are exposed to market risk from energy pricing and rising costs if we do not mitigate our energy use through efficiency investments. | | Impacts | Rental income, operating costs, asset value, and liquidity of individual assets may be negatively affected if they fail to meet evolving regulatory standards, such as future Minimum Energy Efficiency Standards (MEES) for Energy Performance Certificates (EPCs), or market and shareholder expectations, including decarbonisation in line with the CRREM pathways. | Our leadership in sustainability may be acknowledged by our customers and partners, leading to additional business opportunities or income benefits. However, failing to meet stakeholder expectations could harm our business performance in various ways, including our ability to secure nomination agreements with universities and facing increased financing costs. | Regulations may necessitate an increase in the scale or pace of our decarbonisation investments. The introduction of mandatory carbon pricing could affect the viability of our development pipeline and raise the ongoing operating costs of our existing portfolio. Additionally, failing to meet minimum standards could have significant reputational impacts, as outlined in principal risks 8 and 9 on page 60. | Energy price volatility complicates forecasting, and recent high prices have significantly increased operating costs. Failure to manage energy purchasing could exacerbate this impact. Property valuers are beginning to factor utility costs into asset valuations, and we anticipate further downward pressure on valuations if energy efficiency is not improved to counteract this. | | Time period | S M L | S M L | M L | S M L | | Financial risks and opportunities | Our 2020 Net Zero Carbon Pathway identified the need to invest approximately £10–12 million p.a. to achieve our 2030 ambition. This year, over £10 million was spent on assets with a pay back in c.10 years on an undiscounted basis through utility savings. We anticipate asset values to experience a brown discount in the next 3–5 years, if assets risk failing EPC MEES investors' expectations of energy and carbon efficiency. | Not usefully quantifiable with existing data. | The UK Government's legally binding 2050 net zero target currently requires no mandatory action for business. However, we expect to spend c.£10–12 million p.a. on energy efficiency investment, supporting our transition to net zero carbon and ensuring that the portfolio complies with EPC standards. Failing to achieve this could potentially lead to loss of earnings and enforcement fines. However, following recent investments, 91.7% of floor area is now EPC A or B rated so we have low exposure to this risk. | We spend approximately £40 million annually on utilities, making it our second-largest operating expense after staff costs. Ongoing market volatility complicates forecasting. We aim for a 10-year payback on our energy efficiency investments, targeting around £10 million in annual savings. If utility prices remain high, the potential savings from these investments will also increase. | THE UNITE GROUP PLC Annual Report and Accounts 2024 67 --- STRATEGIC REPORT # RISK MANAGEMENT continued CLIMATE-RELATED RISKS AND OPPORTUNITIES TABLES CONTINUED | Risk | Transition | | | | | --- | --- | --- | --- | --- | | | Technology | Reputation | Policy and legal | Market risk, commodity and resource efficiency | | Scenario methodology | We assess individual assets against the CRREM 1.5°C pathways for UK multi-family residential energy consumption and carbon emissions (on a market-based Scope 2 basis), and have reviewed all EPCs against relevant UK EPC MEES targets. We expect all assets to meet MEES because of planned capital investments as part of our transition to net zero. | The nature of this risk means it cannot easily be modelled under specific and defined climate scenarios. While reputation is a critical enabler for the fulfilment of our business objectives, it cannot easily be quantified or assessed, although it is regularly tracked and measured via our Higher Education Engagement Net Promoter Score. | We have assessed the levels of investment that may be required to improve EPC ratings in line with different potential targets, using our experience and insight from previous capital projects and improvements. | Utility costs are complex, influenced by consumption, commodity prices, and non-commodity prices. We have modelled the potential impact on overall utility costs and the corresponding business consequences, such as reduced NOI or increased rental growth to mitigate, based on low, medium and high energy price inflation scenarios. | | Mitigation and adaptation activities | Planned capital investments aim to reduce energy and carbon in line with our SBTi and CRREM-based targets and so avoid asset stranding. We will continue to review the level of ambition and targets and monitor progress against these plans to inform the ongoing development of our strategy and take corrective action where required. This includes the evolution of externally derived targets. | We actively engage with our customers, university partners, suppliers and investors to explain and seek feedback on our sustainability performance and goals in addition to understanding their requirements and expectations. | Our sustainability and legal teams, with support from our expert advisers, routinely monitor upcoming and proposed regulation to ensure we can adapt ahead of introduction to remain compliant. Our planned capital investment will ensure all our buildings meet minimum efficiency standards. | We forward purchase our utilities so that we have price certainty when putting rooms on sale, allowing us to confidently set prices at an appropriate level to reflect the costs which we face. Around 30% of our electricity is secured through a corporate Power Purchase Agreement (PPA), giving us certainty of supply over multiple years. We are actively exploring opportunities to secure additional PPAs given the compelling environmental and financial impacts. | We have a significant opportunity to benefit from addressing climate-related risks. Reducing energy consumption will lead to cost savings, growing net operating income, and higher asset values. Enhancing climate resilience, such as mitigating overheating risks, will improve customer experience and provide a competitive edge. Our Net Zero Carbon Pathway aligns with key stakeholder expectations and supports new development and growth opportunities. Meeting market expectations for sustainability could also make equity and debt capital more accessible and affordable. In 2024, we monitored climate risks and opportunities in financial planning, especially utility costs. Usage levels could impact performance due to commodity price volatility from geopolitical issues and climate change. Our 2025 budget includes further assessments of utility cost exposure and strategies to mitigate increases through energy investments. Climate risks, especially energy usage, flooding, and the low-carbon transition, are factored into our capital allocation decisions. We assess acquisitions and disposals to identify costs related to net zero commitments, EPC requirements and utility expenses, which are reflected in financial modelling and due diligence. New developments are expected to achieve EPC A and BREEAM Excellent ratings, using resource-efficient technologies like rainwater harvesting, low water usage showerheads and solar power. These developments will mitigate overheating risks as required by Part O of Building Regulations and include design features as necessary to maintain thermal comfort. Flooding is a significant risk for certain sites, requiring appropriate design and construction to meet regulatory and local authority planning requirements. The cost of mitigation measures is considered in our investment appraisals, with higher returns sought where the risk remains substantial. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Case study # New Bromley Place development We welcomed students in October to our newest development, Bromley Place, which provides 271 students with a home in Nottingham city centre. Located next to the city's Victoria Centre shopping complex, the £36 million development was completed in 12 months. The building has been designed to meet the needs of second- and third-year students as well as postgraduate students, with amenities including larger study areas and a state-of-the-art gym. Bromley Place incorporates an existing three-storey building into its design and has the lowest embodied carbon of any current Unite Students development. To further reduce impact on the environment, the building is fitted with low-energy LED lighting and high efficiency heating and cooling systems. ![img-61.jpeg](img-61.jpeg) In 2024, we evaluated our portfolio's exposure to flooding, overheating, and heating reduction using Intergovernmental Panel on Climate Change (IPCC) RCP scenarios for temperature increases of $1.5^{\circ}\mathrm{C}$ , $2.0^{\circ}\mathrm{C}$ , and $+4^{\circ}\mathrm{C}$ by 2100, chosen as the most relevant and likely scenarios to our operations. The analysis showed that under a $+4^{\circ}\mathrm{C}$ scenario, the number of assets at high risk of flooding more than tripled (from 23 to 82), those at risk of overheating nearly tripled (from 44 to 128) and approximately a quarter of assets would see significant reductions in winter heating energy use. Impacts would be lower under $1.5^{\circ}\mathrm{C}$ and $2.0^{\circ}\mathrm{C}$ scenarios but still increase with temperature. Our analysis reassures us that our strategy, including actions in our Net Zero Carbon Pathway, is resilient under a $2.0^{\circ}\mathrm{C}$ or lower scenario, though we will continue to reassess and adjust our strategy as needed. Under a $+4^{\circ}\mathrm{C}$ scenario, we will need to adjust our strategy and financial planning to address worsening flooding and overheating. This may involve divesting less resilient assets, increasing investment in resilience, and modifying operations. We may also see changes in customer behaviour and supply chain disruptions. Enhanced due diligence in supply chain selection, especially for materials from climate-impacted areas, will be crucial. Our transition risk analysis considers rising commodity costs due to climate policy, influencing our sustainable procurement approach. A more detailed overheating risk analysis is planned for 2025 to refine strategic adjustments for all warming scenarios. Overheating risk persists, but we anticipate time to adapt our strategy. # RISK MANAGEMENT Climate change is a significant risk influencing our long-term decisions, including investment and divestment, and is integrated into our strategy and risk management framework. Our three main objectives are to be a Great Place to Live, Work and Invest, with our commitment to achieving net zero carbon by 2030 and reducing resource intensity supporting these goals. We collaborate with teams across the organisation, senior management, external advisers, and stakeholders to identify risks. These are documented in our Risk Register, reviewed by the Executive Committee, and principal risks are assessed by the Board twice a year. Climate change risk is managed through our risk framework, where each risk is assigned an owner, evaluated for impact, and associated controls are identified. Residual risk is assessed against our risk appetite. As part of our overall risk management process, we conducted a climate-related risk scoping workshop assessment and identified the most material risks, evaluating the methodology for assessing future climate scenarios. Each risk is assigned considering their likelihood, business consequences, possible management and mitigation strategies, Scenario modelling, including climate scenario analysis in this CFD and TCFD disclosure, helps us understand risks under different stress levels and test mitigation plans. We conducted a climate-related risk assessment workshop to identify key risks THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC REPORT # RISK MANAGEMENT continued and updated scenarios using the latest data from the Met Office, ensuring the analysis reflects current scientific understanding. The process for assessing climate risks follows the same approach as for all principal risks, with the Board responsible. These are detailed in the Summary of principal risks and uncertainties tables on page 60. The Energy and Environment Team integrates sustainability into the business, tracking climate, legal, and policy developments to manage associated risks. This includes adhering to MEES regulations for EPC standards and developing transition plans for assets to meet future standards. We monitor regulatory requirements, including climate change, to ensure compliance with new regulations. Climate-related risks and opportunities are assessed through due diligence for investments and risk assessments for existing assets. These include energy efficiency ratings and physical climate risks, detailed in Asset Transition Plans: - Existing assets – Risks are identified by analysing property data, such as flood risk, transition risk using CRREM tool outputs, and energy performance, typically reviewed annually to inform asset management and disposal strategies. - Investment and divestment – The Investment Committee reviews sustainability risks, considering geographical location for physical risks like flooding and overheating. - Transition risks are assessed based on energy efficiency ratings, plant and machinery, construction type, and investment needed to meet net zero targets. When risks are identified, we develop mitigation strategies for new developments or adjust acquisition pricing if risk can be managed. # METRICS AND TARGETS Our 2030 net zero carbon commitment, outlined in our 2021 Net Zero Pathway, aligns with the Paris Agreement and UK Government goals. This is supported by SBTi-approved science-based targets and our RE100 pledge to purchase 100% renewable electricity by 2030. Senior leadership's long-term incentive plan is linked to energy intensity, and Executive bonuses are tied to GRESB, which includes net zero transition and sustainability performance. Focusing on net zero helps reduce physical risks from overheating and flooding, maintains reputational integrity, and ensures the use of best available technology to achieve credible and achievable transition plans. As we offer all-inclusive rent, including the cost of utilities, our customers' energy use is included in our Scope 1 & 2 emissions, providing an opportunity to reduce both our and their environmental impact. This is unlike most real estate businesses where tenant energy use contributes to Scope 3 emissions. Our Net Zero Carbon Pathway includes ambitious climate-related targets: - Reduce absolute carbon emissions (Scope 1 and market-based Scope 2) by 56% by 2030 from a 2019 baseline (SBTi validated) - Achieve 625kgCO₂e/m² of embodied carbon or new developments by 2030, in line with the RIBA 2030 climate challenge - Reduce energy intensity by 28% by 2030 compared to 2019 - Source 100% of energy from renewable sources by 2030, in line with RE100. We are undertaking a number of actions in 2025 to ensure that we continue to progress towards our net zero goal and mitigate climate risks: - c.£12 million of capital investment in energy efficiency planned for 2025, including LED lighting, air source heat pumps and improved heating controls - Exploring options to expand our electricity Power Purchase Agreements to meaningfully decarbonise our energy supply - Climate-related metrics are included in Company bonus and incentive schemes as set out in the Governance section of this disclosure - We continue to explore internal carbon pricing options and expect them to form part of our updated Net Zero Carbon Pathway. Energy consumption and Scope 1 & 2 greenhouse gas emissions, calculated in line with the Greenhouse Gas Protocol, have been externally verified by SGS to a reasonable level of assurance in line with the requirements of ISO 14064-3:2019. Environmental performance data has undergone external assurance by SGS to a limited level of assurance in line with requirements of ISAE 3000 (Revised): Assurance Engagements Other than Audits or Reviews of Historical Financial Information. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- The table below sets out some key performance indicators that are linked to our 2024 sustainability targets on page 45, and the climate related risks and opportunities set out in this chapter. More details of performance against targets are set out in our separate Sustainability Report and trend analysis against our KPIs is included in the Sustainability section of this report. | KPI | 2019 base year | 2022 | 2023 | 2024 | 23-24 change | | --- | --- | --- | --- | --- | --- | | Investment in energy efficiency (£m) | £2.2 million | £13 million | £8.2 million | £10.2 million | 24.4% | | Scope 1+2 (market-based) absolute emissions (tonnes CO₂e/yr) | 29,502 | 12,957.7 | 12,628.0 | 12,781 | 1.2% | | Average energy intensity (kWh/m²/year) | 122.6 | 115.6 | 111.9 | 111.5 | -0.4% | | GRESB rating | 72 (three star) | 84 (four star) | 86 (four star) | 85 (four star) | -1.0% | | Water consumption per m² floor area (m³/ bed) | 41.5 | 45.5 | 39.1 | 39.4 | 0.8% | | % of electricity from renewable sources | 61.1% | 99.9% | 99.9% | 99.9% | 0.0% | | Total social investment | c.£1 million to Unite Foundation | £2.0 million | £2.4 million | £2.6 million | 8.3% | | EPC ratings by floor area | 2019 | 2022 | 2023 | 2024 | 23-24 Change | | --- | --- | --- | --- | --- | --- | | A-B | 41.2% | 61.2% | 92.3% | 91.7% | -0.6% | | C | 19.7% | 19.3% | 7.4% | 7.98% | 0.6% | | D-G | 39.1% | 19.5% | 0.3% | 0.34% | 0.0% | | Total A-C | 60.9% | 80.5% | 99.7% | 99.7% | 0.0% | Investment into sustainability measures is made with reference to these metrics and our individual asset transition plans have been developed to support our Net Zero Carbon Pathway. Should performance diverge from the required trajectory to 2030, we will assess and potentially accelerate interventions. The strategic report on pages 1- 71 was approved on 25 February 2025 by the Board and is signed on its behalf by: Joe Lister Chief Executive Officer ![img-62.jpeg](img-62.jpeg) --- GOVERNANCE ![img-63.jpeg](img-63.jpeg) ![img-64.jpeg](img-64.jpeg) # Governance ![img-65.jpeg](img-65.jpeg) 72 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-66.jpeg](img-66.jpeg) # CORPORATE GOVERNANCE 74 Chair's introduction to governance 76 Board of Directors 80 Board statements 83 Board leadership and purpose 88 Division of responsibilities 90 Section 172 93 Board activities 98 Nomination Committee 101 Audit & Risk Committee 106 Sustainability Committee 108 Health & Safety Committee 112 Remuneration Committee 138 Directors' Report 141 Statement of Directors' responsibilities ![img-67.jpeg](img-67.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 73 --- GOVERNANCE # CHAIR'S INTRODUCTION TO GOVERNANCE # Overseeing our strategy and growth Our governance and risk management framework is built around our strategic objectives to provide a Great Place to Live, Work and Invest. ![img-68.jpeg](img-68.jpeg) ## Board focus areas in 2024 **Great Place to Live** Fire safety and cladding remediation; student security and wellbeing **Great Place to Work** Learning and development; performance management and reward; diversity and inclusivity **Great Place to Invest** Development pipeline in strongest markets; Newcastle and other prospective university joint ventures; disposals; responsible and sustainable landlord Our governance and risk management framework is built around our strategic objectives, focusing on our customers, our people and our investors. The Board oversees how we deliver a Great Place to Live, with the safety and wellbeing of our customers paramount. The Health & Safety Committee has continued its oversight of our fire safety and cladding remediation programme, security at our properties and our sector-leading Support to Stay framework helping respond to the increasing wellbeing and mental health concerns of our customers. The Board has also continued to oversee the ongoing investment in our best-in-class operating platform, with the roll out in 2024 of our new customer app and website. We continue to look to drive efficiencies through our scale and technology platform, with a Board focus on ensuring we deliver high quality and affordable homes for our customers. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-69.jpeg](img-69.jpeg) # RICHARD HUNTINGFORD CHAIR Delivering these homes requires the ongoing dedication and kindness of our frontline teams working closely with our university partners. The Board monitors how we make Unite Students a Great Place to Work, ensuring investment in life-long learning, recognising and incentivising performance, all through a more diverse workforce and one that is increasingly representative and understanding of our customers. During 2024, Ilaria del Beato, our Designated Non-Executive Director for Workforce Engagement, attended meetings of our employee forum, Culture Matters, and was able to hear directly from workforce representatives. By delivering a Great Place to Live and Work, the Board believes we can deliver a Great Place to Invest providing attractive and sustainable returns for our shareholders. These returns depend on the quality, location and scale of our portfolio, with the Board overseeing the delivery of our development pipeline in the strongest university markets with an acute supply demand imbalance as well as our first university joint venture, working with Newcastle University to develop 2,000 new student beds at Castle Leazes. The Board carefully balances this new development with disposals, ensuring we improve our portfolio and alignment with the strongest universities. The Board also oversees the investment in our existing portfolio, with targeted refurbishments enhancing customer experience and our value-for-money proposition. We can only achieve our purpose, a Home for Success in communities where young people can thrive, if we are a responsible and sustainable business. Through the ongoing detailed work of the Sustainability Committee, the Board is monitoring progress in relation to our transition to a net zero carbon business by 2030 as well as reviewing our reporting and disclosure on environmental, social and governance (ESG) issues. With a record number of UK 18-year-olds starting at university in September 2024, the Board continues to see increasing demand for student accommodation coupled with supply constrained due to slowing and more costly PBSA development and a shrinking HMO sector. Affordability, especially with increasing cost-of-living pressures, continues to be key for students, parents and universities and the Board oversees how we deliver safe, high-quality, value-for-money homes for our customers, many of whom are living away from home for the first time. The following pages explain how our governance has supported the delivery of our strategy through 2024 and how it will continue to support our growth and sustainability in the longer term. Richard Huntingford Chair 25 February 2025 > "With a record number of UK 18-year-olds starting at university in September 2024, the Board continues to see increasing demand for student accommodation coupled with supply constrained due to slowing and more costly PBSA development and a shrinking HMO sector." THE UNITE GROUP PLC Annual Report and Accounts 2024 75 --- GOVERNANCE # BOARD OF DIRECTORS ![img-70.jpeg](img-70.jpeg) RICHARD HUNTINGFORD CHAIR ![img-71.jpeg](img-71.jpeg) JOE LISTER CHIEF EXECUTIVE OFFICER ![img-72.jpeg](img-72.jpeg) MIKE BURT CHIEF FINANCIAL OFFICER ## N Richard joined the Board on 1 December 2020 and became Chair in April 2021 and Chair of the Nomination Committee on the same date. ## Relevant skills, experience and contribution A chartered accountant with over 30 years of plc board experience including as Chief Executive of Chrysalis Group plc between 2000 and 2007 and as a Non-Executive Director of Virgin Mobile Holdings (UK) plc. Chair roles have included Wireless Group plc (formerly UTV Media plc), Creston plc and Crown Place VCT plc. His FTSE Chair experience and wider Non-Executive and Executive experience helps ensure best practice in Board effectiveness and corporate governance. Experience in public company governance and leadership, corporate finance, investment, business development, investor relations and media helps us drive our strategy development and effective engagement with our wider stakeholders. ## External appointments - Future plc (Chair) ## N S Joe became Chief Executive Officer on 1 January 2024. He joined Unite Students in 2002 and held a variety of roles before becoming Chief Financial Officer in 2008. ## Relevant skills, experience and contribution Played an integral role in the design and delivery of the Group's strategy, sustainable growth and financial performance with deep experience of our business and sector. Now leading the development, implementation and communication of the Group's strategy and ongoing performance with our investors. ## External appointments None Mike became Chief Financial Officer on 1 January 2024. He was previously Investment Director and joined the business in 2019. ## Relevant skills, experience and contribution A wealth of financial experience in corporate finance across a range of sectors. Prior to joining Unite Students, he spent ten years as a research analyst covering real estate companies, most recently at Exane BNP Paribas. A strong track record of leading our investor relations, sustainability commitments, and as a member of the Executive team. Prior to his appointment as Chief Financial Officer, Mike was responsible for our investment strategy and asset management. ## External appointments None THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Committee key K Nomination Committee member A Audit & Risk Committee member R Remuneration Committee member H Health & Safety Committee member S Sustainability Committee member Committee chair ![img-73.jpeg](img-73.jpeg) NICKY DULIEU SENIOR INDEPENDENT DIRECTOR H A R Nicky joined the Board on 1 September 2022 and was appointed Senior Independent Director and Chair of the Remuneration Committee in March 2023. ## Relevant skills, experience and contribution A chartered accountant and a proven business leader with an established plc track record and extensive experience in consumer facing markets, including as CEO of Hobbs between 2008 and 2014. Also, the Finance Director of Marks & Spencer's Food Division in a career at the retailer spanning 1982-2005. Non-Executive Director experience includes chairing Remuneration and Audit Committees and as a Senior Independent Director. In this role, she supports the Chair in the effective running of the Board. ## External appointments - WH Smith Plc (Non-Executive Director) - Barratt Redrow Plc (Non-Executive Director) ![img-74.jpeg](img-74.jpeg) ROSS PATERSON NON-EXECUTIVE DIRECTOR H A R S Ross joined the Board in September 2017 and became the Audit Committee Chair in January 2018. ## Relevant skills, experience and contribution A former Chief Financial Officer of Stagecoach Group and Non-Executive Director of Virgin Rail Group Holdings Limited. Experience in finance, business development and legal, gained from his finance role at Stagecoach Group. Contributes many years' experience of managing finance in a complex operational business and valued insight to innovation, as we continue to enhance our service offer for customers. His financial and broader business experience is particularly valuable as Chair of the Audit & Risk Committee, where he helps oversee the Group's financial rigour and delivery. ## External appointments - Bytes Technology Group plc (Non-Executive Director) - Tracsis plc (Non-Executive Director) - Institute of Chartered Accountants of Scotland (Business Policy Panel member) ## Composition of the Board ![img-75.jpeg](img-75.jpeg) Chair 1 Executive Directors 2 Non-Executive Directors 7 ## Gender diversity ![img-76.jpeg](img-76.jpeg) Female 4 Male 6 ## Non-Executive Director Independence ![img-77.jpeg](img-77.jpeg) Non-independent 1 Independent Non-Executive Director 6 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # BOARD OF DIRECTORS continued ![img-78.jpeg](img-78.jpeg) ILARIA DEL BEATO NON-EXECUTIVE DIRECTOR H A R S Ilaria joined the Board in December 2018. ## Relevant skills, experience and contribution CEO of Frasers Property UK, part of Frasers Property, a global real estate group. She was formerly CEO of GE Capital UK, a regulated Bank and corporate lender and led GE Capital Real Estate UK, a commercial real estate investor, developer and lender. Over 30 years of experience in real estate, including asset management, investment and lending. This experience is vital to the Group as we navigate the ongoing and upcoming market uncertainties and increasing professionalisation of the sector. ## External appointments - Frasers Property UK (CEO) ![img-79.jpeg](img-79.jpeg) DAME SHIRLEY PEARCE NON-EXECUTIVE DIRECTOR H H S Dame Shirley joined the Board in November 2019 and chairs our Sustainability Committee. ## Relevant skills, experience and contribution A wealth of experience in Higher Education, health and policing, including as Vice Chancellor of Loughborough University from 2006-2012, as a board member at the Higher Education Funding Council for England, the Universities and Colleges Employers Association, and the Healthcare Commission. Non-Executive Director roles included at Health Education England and the Norfolk, Suffolk and Cambridgeshire Strategic Health Authority. She was appointed CBE in 2005 for services to education in the NHS and in 2014 appointed DBE for services to Higher Education. ## External appointments - Higher Education Quality Assurance Panel for the Ministry of Education in Singapore - Royal Anniversary Trust (Trustee) - HCA (Advisory Board member) - London Academy of Music and Dramatic Art (Trustee) ![img-80.jpeg](img-80.jpeg) THOMAS JACKSON NON-EXECUTIVE DIRECTOR H Thomas joined the Board in November 2019 following the Group's acquisition of Liberty Living from Canada Pension Plan Investment Board (CPPIB). ## Relevant skills, experience and contribution Managing Director and Head of Real Estate Europe at CPP Investments. Responsible for leading the real estate investment team based in London. Played a key role in building CPP Investment's European, UK, and India real estate portfolios. Also, a member of CPP Investment's global real estate investment committee. Previously a Vice President in the real estate investment banking team at Macquarie Bank focused on M&A transactions across Europe and the UK, within the private and listed real estate sectors. His international experience is invaluable, providing a wide perspective on real estate. ## External appointments - Canada Pension Plan Investment Board (Managing Director, Head of Real Estate Europe) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Committee key K Nomination Committee member A Audit & Risk Committee member B Remuneration Committee member II Health & Safety Committee member S Sustainability Committee member Committee Chair ![img-81.jpeg](img-81.jpeg) PROFESSOR SIR STEVE SMITH NON-EXECUTIVE DIRECTOR # H A R H Professor Sir Steve joined the Board in April 2020 and has chaired our Health & Safety Committee since July 2020. ## Relevant skills, experience and contribution A wealth of experience in the Higher Education sector, including as Vice-Chancellor and Chief Executive of the University of Exeter from 2002 to August 2020. President of Universities UK (UUK) (2009–2011), Chair of UCAS (2012–2019), served on the boards of UUK and the Russell Group, and was Chair of the UUK International Policy Network (2014–2020). Between 2007 and 2010, led for Higher Education on the Prime Minister's National Council of Excellence in Education, providing advice to Government. Sir Steve was knighted in 2011 for services to Higher Education. His Higher Education sector experience helps the Board navigate a changing Higher Education sector, particularly through the development of strong university partnerships. ## External appointments - Trustee for Fulbright Programme - UK Government International Education Champion - UK Government Special Representative to Saudi Arabia for Education - Member of the Board of the Lee Kuan Yew School of Public Policy, National University of Singapore ![img-82.jpeg](img-82.jpeg) ANGELA JAIN NON-EXECUTIVE DIRECTOR # H H Angela joined the Board in August 2023 and became our Designated Non-Executive Director for Workforce Engagement in January 2025. ## Relevant skills, experience and contribution Works in the commercial television industry and for the past 12 years has held senior executive roles at ITV where she is currently Director of Unscripted UK television. Strong insights into the broader business community, government and key stakeholders through positions on the boards of BusinessLDN and ITN. Her experience with younger audiences, particularly relating to wellbeing and safeguarding, contributes to the Board's better understanding of the needs, wants and behaviours of our customers. ## External appointments - ITV (Director of Unscripted, UK) ![img-83.jpeg](img-83.jpeg) CHRIS SZPOJNAROWICZ COMPANY SECRETARY Chris became Company Secretary and Group Legal Director in 2013. ## Relevant skills, experience and contribution Prior to Unite Students, held General Counsel roles at GE, MTV Networks and other multinationals. He was previously an M&A/corporate and commercial lawyer at Clifford Chance and Baker McKenzie. Chris uses his general counsel and corporate/commercial legal experience to ensure our corporate and risk governance is aligned with our business activity. ## External appointments - The West of England Friends Housing Society (Board Trustee) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # BOARD STATEMENTS # Board statements ![img-84.jpeg](img-84.jpeg) Under the UK Corporate Governance Code, the Board is required to make a number of statements. These statements are set out below: ## Compliance with the Code | Requirement | Board statement | More information | | --- | --- | --- | | The Unite Group PLC is listed on the London Stock Exchange and is subject to the requirements of the UK Corporate Governance Code (the Code). The Board is required to apply the principles of the Code and to either comply with the provisions of the Code or, where it does not, explain the reasons for non-compliance. The Code is available at www.frc.org.uk. | The Board considers that the Company has, throughout the year ended 31 December 2024, applied the principles and complied with the provisions set out in the Code. The Board acknowledges a new edition of the Code (2024 edition) applies for financial years commencing from 1 January 2025 (and for Provision 29 from 1 January 2026). During 2024, the Board has reviewed how the Company will comply with this new edition of the Code. | Details on how the Company has applied the principles and complied with the provisions of the Code can be found throughout this Corporate Governance section of the Annual Report. The table below on page 82 details where disclosure against the principles of the Code can be found in this Corporate Governance Report. | ## UK Listing rule – Board diversity | Requirement | Board statement | More information | | --- | --- | --- | | In accordance with the requirements of UK Listing Rule 6.6.6R(9), the Board is required to provide a statement as to whether it has met certain targets related to gender and ethnic diversity at Board level. | The Board confirms that as at 31 December 2024, all three diversity targets were met: 1. 40% of the Board were women 2. One of the Senior Board positions (the Senior Independent Director) was held by a woman 3. One Director was from an ethnic minority background. | More details on the Company's compliance with the UK Listing Rules relating to Board diversity amongst the Board and Executive management can be found on page 100. | 80 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # Going concern ## Requirement In accordance with Provision 30 of the Code, the Board is required to confirm that the Group has adequate resources to continue in operation for the foreseeable future. ## Board statement After making enquiries and having considered forecasts and appropriate sensitivities, the Directors have formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of these financial statements. ## More information More details on the going concern statement, in accordance with the requirements of UK Listing Rule 6.6.6R(3), can be found on pages 158 and 159. # Viability statement ## Requirement In accordance with Provision 31 of the Code the Board is required to assess the viability of the Company taking into account the current position and the potential impact of the principal risks and uncertainties set out on pages 52-71. ## Board statement Taking account of the Company's current position and principal risks and having assessed the prospects of the Company, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three years to December 2027. ## More information More details can be found in the viability statement in accordance with the requirements of UK Listing Rule 6.6.6R(3) found on page 62. # Principal and emerging risks facing the Group ## Requirement In accordance with Provision 28 of the Code the Board is required to confirm that it has carried out a robust assessment of the principal and emerging risks facing the Group and include a description of these principal risks, what procedures are in place to identify emerging risks, and an explanation of how these are being managed or mitigated. ## Board statement A robust assessment of the principal and emerging risks facing the Company was undertaken during the year, including those arising from climate change and those that would threaten its business model, future performance, solvency or liquidity, together with an assessment of the procedures to identify emerging risks. ## More information Information around key risks and risk management processes and how they are being managed or mitigated can be found on pages 52-71 and page 104 of the Audit & Risk Committee Report. # Risk management and internal control ## Requirement In accordance with Provision 29 of the Code the Board is required to monitor the Company's risk management and internal control systems and, at least annually, carry out a review of their effectiveness and report on that review in the Annual Report. ## Board statement The Board conducted a review of the effectiveness of the internal controls, supported by the work of the operational compliance and internal audit teams and their reports to the Audit & Risk Committee. This is reported in the Annual Report. No significant weaknesses were identified through the course of the reviews. ## More information Details on the systems of risk management and internal control and the review of their effectiveness can be found on pages 104. # Fair, balanced and understandable ## Requirement In accordance with Provision 27 of the Code the Board should confirm that it considers the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. ## Board statement The Directors consider that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. ## More information See the Audit & Risk Committee Report on pages 101-105. 81 --- GOVERNANCE # BOARD STATEMENTS continued ## Compliance with the Code The Company's disclosures on its application of the principles of the Code can be found in the table below: | **Board leadership and Company purpose** | **Page** | | --- | --- | | A. Long-term sustainable success and contribution | Pages 10-15 and 90-92 | | B. Purpose, values and culture | Pages 83-84 | | C. Resources and control framework | Pages 52-71 and 84 | | D. Engagement with shareholders and stakeholders | Pages 11-13, 86 and 90 | | E. Workforce policies and practices | Pages 11 and 86 | | **Division of responsibilities** | **Page** | | F. Board leadership | Pages 83-87 | | G. Board composition and responsibilities | Pages 88-89 | | H. Role and commitment of Non-Executive Directors | Pages 88-89 | | I. Board effectiveness | Page 97 | | **Composition, succession and evaluation** | **Page** | | J. Board appointments, succession plans and diversity | Pages 98-100 | | K. Board experience, skills and knowledge | Pages 76-79, 88,98-100 | | L. Board evaluation | Page 97 | | **Audit, risk and internal control** | **Page** | | M. Internal and external audit – independence and effectiveness | Pages 104-105 | | N. Fair, balanced and understandable | Page 103 | | O. Risk management and internal controls | Pages 57-71 and 104 | | **Remuneration** | **Page** | | P. Remuneration policies and practices – long-term strategy and success | Pages 112-137 | | Q. Development of policy on remuneration | Pages 112-115,119-126 | | R. Judgement and discretion | Pages 112, 118-134 | 82 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # BOARD LEADERSHIP AND PURPOSE The Board is responsible for establishing the Company's purpose, strategy and values, promoting its culture, overseeing its conduct and affairs, for promoting the long-term sustainable success and generating value for shareholders and contributing to wider society. ## OUR PURPOSE – HOME FOR SUCCESS The Board has defined our common purpose. Our purpose also describes our shared commitment and motivation and contribution to the delivery of our strategic objectives, informing the development of our business model and strategy, operating practices, approach to risk and how we engage with our stakeholders. The Board oversees our service proposition and how we provide a Great Place to Live, where students belong and have access to support. Our operating model provides 24/7 round-the-clock support, 365 days a year across all our properties. Our student assistance programme offers 24/7 access to our Student Wellbeing Helpline, a counsellor-led triage service providing in-the-moment support. Our purpose informed the Board's commitment for the Group to remain a Real Living Wage employer during 2024, having been the first in our sector. The Board also supported the decision to commission the Social Market Foundation to deliver a report into the barriers facing care-experienced and estranged students with entry into and success in Higher Education. This further emphasises our commitment to our values and undertaking to make a positive impact for students and young people. Home for Success is also about ensuring we are the right partner for our university partners. As a trusted member of the Higher Education community, we support our university partners to build a brighter future for students everywhere. Our nomination agreements with universities cover over half of our beds for the 2024/25 academic year and it is through our longstanding relationships that we have been able to secure multi-year agreements and support additional demand. We regularly engage with our university partners to understand their long-term aspirations, accommodation requirements and evolving expectations around student welfare. This means our offer is built around the priorities of students and universities alike. By placing people at the heart of our business, the Board's focus on Home for Success is also about ensuring a Great Place to Work. This means an environment where our employees can grow, develop, succeed and belong. The Board is driven by our commitment to develop diverse and inclusive teams, filled with support, positive energy and new ideas. Our dynamic culture offers variety, growth and a range of career pathways and opportunities available to all. We remain focused on being an employer of choice. The Board has ultimate responsibility to shareholders for all the Group's activities as well as a broader responsibility to consider the views of other key stakeholders including our customers, universities, employees and the communities we operate in, as well as considering environmental and social issues when making decisions. ## OUR VALUES, PEOPLE AND CULTURE During 2024, the Board had oversight of the development of our refreshed values: Challenge the Ordinary, Lead with Heart, Unite as One and Stay on Point. These values guide us in delivering our Home for Success purpose. Our values continue to shape our culture, our ambitions, the things we believe in and how we act. They connect us and drive our behaviours to create a positive impact and move with clear intent. This goes beyond regulatory compliance and relates to all aspects of the business including the impact on our people and communities. Through our Culture Matters employee forum, our employees' voice remains front and centre ensuring dialogue between the Board and the wider business. The relationships built within the forum have allowed for meaningful and open conversations as well as direct actions taken to contribute to our Home for Success purpose. Ilaria del Beato served as our Designated Non-Executive Director for Workforce Engagement during 2024 with Angela Jain taking over with effect from 1 January 2025. During 2024, Ilaria attended forum meetings where she demonstrated the commitment of the Board through supportive and informative dialogue. In addition, the Culture Matters forum welcomed attendance from Nicky Dulieu, Chair of the Remuneration Committee who delivered a session on Executive remuneration. Dame Shirley Pearce, Chair of the Sustainability Committee also attended, highlighting the importance of sustainability to the Board. Feedback provided to the Board helps to inform its decision-making such as how we develop greater gender and ethnic diversity in our senior leadership and create a more diverse workforce (more details on Ilaria's role and activities during 2024 can be found on page 86). ## HOW THE BOARD MONITORS OUR CULTURE Our culture defines what makes Unite Students a Great Place to Work and a great company to do business with and this forms the fundamental basis for our governance. During the year, the Board received regular updates on our first culture audit. Over 100 employees from across THE UNITE GROUP PLC Annual Report and Accounts 2024 83 --- GOVERNANCE # BOARD LEADERSHIP AND PURPOSE continued the business participated in focus groups to gather insights to help inform areas to strengthen our culture. Following the audit we have made significant progress in employee engagement and talent management initiatives such as My Impact which will continue into 2025. The Board will continue to oversee Diversity, Equity, Inclusion and Belonging across the business and evolve our approach to talent and reward. The Board monitors corporate culture through interaction and dialogue with our people though our Designated Non-Executive Director for Workforce Engagement and through regular employee engagement surveys and site visits. The Board also meets the wider business when visiting properties and seeing our operations, helping ensure our values and culture are well understood and giving our people the opportunity for frank and open feedback and the sharing of different views. During 2024, this included the Board visiting properties in Newcastle and London and meeting with the local teams. Our employee surveys help measure engagement through their participation rates as well as the feedback received across the broad range of topics surveyed. Our DEIB and Wellbeing survey helped the Board to identify areas for improvement and feedback on the environment which our employees want to create for themselves and our customers. Feedback resulted in the launch of new Instinctive Inclusion training, supporting conscious inclusion. Over 1,200 employees have already completed this training with positive feedback highlighting the accessible and interactive nature of the training. Our Higher Education trust score monitors how universities view us and provides insight on our culture from our external stakeholders. ## BOARD OVERSIGHT The Board discharges some of its responsibilities directly and others through Committees and senior management. Terms of reference for the Committees are available in our Governance Framework, published on www.unitegroup.com/about-us/corporate-governance. To discharge their broader responsibility effectively, the Group operates in an open and transparent manner, ensuring open communication between the Board and the business and its stakeholders. During 2024, the Board listened and heard directly from the leadership team, wider senior leaders and our stakeholders. The Board engaged with our employees and stakeholders on the impact of employee and student wellbeing and support, as well as our environmental and social impact. The Board receives updates on business performance from our leadership team, including the Chief Operating Officer, Group Strategy & Technology Director, Group Development Director, Group People Director, Group Safety Director, Finance Risk & Assurance Director, Head of Sustainability, Higher Education Engagement Director and Group Legal Director & Company Secretary (among others). The Board is also responsible for: - Assessing, monitoring and promoting the Company's culture, and ensuring that this closely aligns with its purpose, values and strategy - Ensuring the necessary resources are in place for the business to meet its strategic objectives - Establishing workplace policies and business practices that align with the Company's culture and values and support its strategy (see page 86) - Overseeing the implementation of a robust controls framework to allow effective management of risk, with this oversight delegated to the Audit & Risk Committee (see pages 101-105) - Effective succession planning for key senior personnel, much of which is delegated to the Nomination Committee (see pages 98-100). The Board has ultimate responsibility to Unite Group's shareholders for all the Group's activities, as well as a broader responsibility to consider the views of other key stakeholders. These include our customers, universities, employees, suppliers and the communities we operate in, as well as considering environmental and social issues when making decisions. All of the Board's significant decisions are considered having regard to Section 172 of the Companies Act 2006 and specifically the likely consequences of these decisions in the long term and their impact on our stakeholders. Pages 90-92 highlight how the Board has sought to effectively consider and engage with our shareholders and wider stakeholders. While the above summarises the key areas of Board responsibility, it is not intended to be exhaustive. ## Whistleblowing programme Our whistleblowing programme and the nature of concerns raised are reviewed annually. Our Whistleblowing Policy, and a clear explanation of how employees can raise a concern in confidence, is readily available and published on our intranet. This includes raising a concern via an independent third-party if someone feels this is necessary. Concerns raised are investigated and escalated as appropriate. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # Board Committees The Board has delegated certain responsibilities to its Committees and the current membership of each Committee is set out below. The terms of reference for each Committee are reviewed annually. # A Audit & Risk Committee The Audit & Risk Committee oversees the financial reporting, risk management and internal control procedures. ## Ross Paterson - Ilaria del Beato - Nicky Dulieu - Professor Sir Steve Smith Q SEE COMMITTEE REPORT P101 # H Health & Safety Committee The Health & Safety Committee oversees the performance of the Unite Student's health and safety and helps drive our Trusted Landlord promise. ## Professor Sir Steve Smith - Joe Lister - Dame Shirley Pearce - Angela Jain Q SEE COMMITTEE REPORT P108 # N Nomination Committee The Nomination Committee reviews the structure, size, composition, skills and experience of the Board and focuses on succession planning with due regard to diversity. ## Richard Huntingford - Ilaria del Beato - Nicky Dulieu - Ross Paterson ## Dame Shirley Pearce - Professor Sir Steve Smith - Thomas Jackson - Angela Jain Q SEE COMMITTEE REPORT P98 # R Remuneration Committee The Remuneration Committee determines the Remuneration Policy in consultation with shareholders for the remuneration of the Board and the implementation of this policy. ## Nicky Dulieu - Ross Paterson - Professor Sir Steve Smith - Ilaria del Beato Q SEE COMMITTEE REPORT P112 # S Sustainability Committee The Sustainability Committee oversees the implementation of the Sustainability Strategy and helps ensure Unite Students is a responsible, resilient and sustainable business. ## Dame Shirley Pearce - Joe Lister - Ilaria del Beato - Ross Paterson Q SEE COMMITTEE REPORT P106 --- GOVERNANCE # BOARD LEADERSHIP AND PURPOSE continued ## HOW THE BOARD OPERATES AND STAKEHOLDER ENGAGEMENT The Board meets eight times per year with an agenda of items for the forthcoming year built around our strategic objectives. The Board's meetings are split between strategy (considered in light of principal and emerging risks, opportunities and the approval of specific investments and disposals above certain thresholds, as well as ESG and longer-term sustainability) and routine operational, property and financial updates (providing context for the strategic discussions as well as governance oversight of in-year activity). Meetings usually take place throughout the UK or in our operating cities and enable the Board to meet our people and learn about their experiences and culture at Unite Students. Meetings were held in person this year with the flexibility of hybrid meetings to allow for increased participation from across the business, including senior leaders who are regularly invited to attend meetings and present to the Board. These meetings provide the Board, and in particular the Non-Executive Directors, with direct and open access to leaders throughout the Group and helps build a culture of openness and directness. In addition, subject matter experts are also invited to present to the Board to give the Directors a broader and independent perspective and to increase knowledge and development. ## WORKFORCE ENGAGEMENT AND THE ROLE OF OUR DESIGNATED NON-EXECUTIVE DIRECTOR The Board has designated one of its Non-Executive Directors to help ensure the views and concerns of the workforce are brought to the Board and taken into account following the framework of listen, reflect and represent. Ilaria del Beato held this role during 2024 with Angela Jain taking over from 1 January 2025. The Board considered that allowing another Non-Executive Director with a different perspective to lead employee engagement efforts going forward would be informative and enhance capabilities and experiences amongst the Board as a whole. As Director of Unscripted, UK at ITV, Angela is in-touch with the needs, wants and behaviours of young people. Angela is well placed to understand current challenges faced by employees. Her role includes: - attending the Culture Matters forum to understand concerns and share these with the Board, so appropriate steps are taken to evaluate the impact on the workforce of proposals and developments - monitoring employee engagement surveys and actions - soliciting employee views on remuneration structures and processes - collaborating with our Group People Director, the Head of People Development & Experience, the Belonging, Equity and Engagement team and the wider People team. We continue to consider this engagement mechanism to be the most appropriate and effective for our Group as it facilitates an insightful two-way dialogue between employees and the Board. Workforce engagement continues to shape the Board's decision-making which was primarily focused on safety, our people and supporting belonging, equity and engagement during 2024. Our engagement resulted in the following: - Launch of My Impact, our new performance enablement framework. This framework was developed after listening to employees and provides opportunities to grow and develop - The creation and launch of new guidance including; Supporting our People (reasonable adjustments and accessibility at work) - Launch of Executive sponsorship and mentoring for our five Employee Networks: Unite Women; People of Colour Unite; Disability and Neurodiversity; Keeping uS Well and Unite LGBTQ+. The Board, through the detailed work of the Remuneration Committee, also monitors pay and practices across the wider workforce with the Group People Director attending these meetings to update on workforce initiatives and offer an employee perspective. See more on page 112. ## Investment in workforce The Company invests in our people, conscious that we can only deliver our Home for Success purpose through our people. Our people are a key stakeholder and how we engage with them and measure this is set out on pages 11 and 90. The Company is a fully accredited Real Living Wage employer and provides recognition through pay awards, annual bonuses, Round of Applause awards and our annual Stars Awards. All employees are eligible to participate in the Company's SAYE scheme and senior leaders are eligible to participate in the long-term incentive plan. My Impact provides the opportunity for meaningful employee performance conversations, helping to align goals with the company's priorities. Employees also have access to our learning catalogue through The Academy which provides employees with a tailored learning experience. The Board also considers diversity, equity, inclusion, belonging and wellbeing across the workforce, by considering our gender and ethnic diversity throughout the Group as well as our gender pay gap. ## How we engage with our investors The Board values effective communication with shareholders and other providers of capital to the business and welcomes their views on the Group's approach to corporate governance. The Board creates sustainable value for our three types of investors: institutional, retail and debt. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # ENGAGEMENT WITH OUR INVESTORS ## EQUITY INVESTORS ### Institutional investors Investors attend our year-end and half-year results presentations. After the announcement of our results in February and July 2024, our Executive Directors held meetings with investors to ensure their views were taken into consideration as we continue to develop our strategy; to help them understand the ongoing performance of the business and our approach to dividends. We held an investor day in November showcasing our Stapleton House property in London. The event included meeting with our largest investors, updating on progress of the Newcastle University joint venture and sharing views on the outlook for UK Higher Education. We also engage with investors throughout the year on various aspects of environmental, social and governance matters. The Board is made aware of the views of major shareholders concerning the Company through, among other means, regular analyst and broker briefings and shareholder feedback. These will continue throughout 2025. The Chair, Richard Huntingford, also reaches out to the top 20 shareholders each year. ### Retail investors Our 2024 Annual General Meeting was held in person and allowed shareholders the opportunity to attend and to raise questions of the Board. In addition, shareholders were invited to ask questions via email in advance of the meeting. All resolutions put to the 2024 AGM received overwhelming support from our shareholders. The results of voting are available at: www.unitegroup.com/investors/agm. There were no resolutions with less than 80% voting in favour and therefore Code Provision 4 did not apply. Our July 2024 capital raise included a retail offer to ensure ongoing participation by our retail investors. ### Scrip scheme The Company continues to offer a scrip dividend alternative to shareholders, which enables them to opt for shares rather than cash with no dealing costs or stamp duty. The scheme, with modified terms and conditions to offer an enhanced scrip dividend alternative, was approved and renewed for a further three years at the 2024 Annual General Meeting. ## DEBT INVESTORS ### Bond holders Bond holders are periodically invited to meet with senior management and the Treasury team to update them on performance and business strategy. Other discussions are held with bond holders on specific topics as required, such as ESG and our sustainability framework. ### Lenders Regular dialogue is maintained with our key relationship lenders, through meetings or conference calls with our CFO and Treasury team. Our Treasury team also actively engages with new and potential lenders. During 2024, engagement with our lenders focused on increasing the size and flexibility of our financing commitments. ### Credit Rating Agencies During the year, business and financial updates were provided by our Treasury team to Standard & Poor's and Moody's. S&P upgraded our investment grade corporate rating to BBB+ with a stable outlook and Moody's investment grade corporate rating remains at Baa1, with a stable outlook. 87 --- GOVERNANCE # DIVISION OF RESPONSIBILITIES ## COMPOSITION OF THE BOARD The composition of the Board is set out in the table on page 77. The Board currently consists of the Chair, two Executive Directors and seven Non-Executive Directors. All of the Directors offer themselves for re-election at the Annual General Meeting, to be convened this year on 15 May 2025, in accordance with the requirements of the Code. Brief biographies of all the Directors and their skills, experience and contribution to the long-term sustainable success of the Company, are set out on pages 77-79. Following the individual performance evaluations of each of the Directors seeking re-election, it is confirmed that the performance of each of these Directors continues to be effective and that they each demonstrate commitment to the role and add value and relevant experience to the Board. ## INDEPENDENCE The Board considers six of its seven Non-Executive Directors to be independent. Thomas Jackson is not considered to be independent, having been nominated as a Director of the Company by its largest shareholder Canada Pension Plan Investment Board (CPPIB) pursuant to a Relationship Agreement signed as part of the Liberty Living acquisition. Accordingly, the Company meets the requirement of the Code that at least half of the Board (excluding the Chair) is made up of independent Non-Executive Directors. In addition, Richard Huntingford (Chair of the Board) was considered independent on his appointment to the role. ## ROLES The Chair and the Non-Executive Directors constructively challenge and help develop proposals on strategy, and bring strong, independent judgement, knowledge and experience to the Board's deliberations. The roles of the Chair and CEO are clearly separated. Summaries of the responsibilities of the Chair, CEO and Senior Independent Director are set out in the tables to the right. The terms and conditions of appointment of the Non-Executive Directors are available for inspection at the Company's registered office and at the Annual General Meeting. ## TIME COMMITMENT During the year, the Board approved Ross' appointment as a Non-Executive Director to the Boards of Bytes Technology Group and Tracsis plc. Nicky Dulieu was also appointed to the Board of Barratt Redrow plc. The Board considered that these appointments would provide them with valuable insights and enhance their contributions to the Board, and noted that roles ## ROLE: CHAIR Richard Huntingford's principal responsibilities are: - to establish, in conjunction with the Chief Executive, the strategic objectives of the Group for approval by the Board - to organise the business of the Board - to enhance the standing of the Company by communicating with shareholders, the financial community and the Group's stakeholders generally. ## ROLE: CHIEF EXECUTIVE Joe Lister has responsibility: - to establish, in conjunction with the Chair, the strategic objectives of the Group, for approval by the Board - to implement the Group's business plan and annual budget - to oversee the operational and financial performance of the Group. ## ROLE: SENIOR INDEPENDENT DIRECTOR As Senior Independent Director, Nicky Dulieu's principal responsibilities are: - to act as Chair of the Board if the Chair is conflicted - to act as a conduit to the Board for the communication of shareholder concerns if other channels of communication are inappropriate - to ensure that the Chair is provided with effective feedback on his performance. were not expected to impact their ability to dedicate sufficient time to their role on the Board and its various committees. Non-Executive Directors are expected to commit approximately 20 days per annum to the business of the Group. We have reviewed the responsibilities of all Directors and are satisfied that they can fully fulfil this commitment. It is the Board's Policy to allow Executive Directors to accept directorships of other unconnected companies so long as the time commitments do not have any detrimental impact on the ability of the Director to fulfil his or her duties. It is considered this will broaden and enrich the business skills of Directors. Any such directorships must be undertaken with prior approval of the Board. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # BOARD TENURE Each of the Executive Directors has a rolling contract of employment with a 12-month notice period, while Non-Executive Directors are, subject to re-election by shareholders, appointed to the Board for a term of approximately three years. The adjacent chart shows the current tenure of the Non-Executive Directors (rounded up to the nearest year). ![img-85.jpeg](img-85.jpeg) # PROFESSIONAL ADVICE AND TRAINING Directors are given access to independent professional advice at the Company's expense when the Directors deem it necessary in order for them to carry out their responsibilities. The Directors also have regular dialogue with, and direct access to, the advice and services of the Company Secretary, who ensures that Board processes and good corporate governance practices are followed. The Board considers it important that the Committee Chairs continue to receive sector and relevant functional training (such as on accounting, sustainability, corporate governance and Executive remuneration reporting developments) and accordingly the Committee Chairs attend relevant external seminars. The Board as a whole receives ongoing training on corporate governance and other relevant developments. # BOARD INDUCTION On appointment to the Board, each Director takes part in a comprehensive and personalised induction programme. This induction is also supplemented with ongoing training throughout the year to ensure the Board is kept up-to-date with key legal, regulatory and industry updates. Any Director on appointment undertakes an induction programme following this framework: - The business and operations of the Group and the Higher Education sector - The role of the Board and matters reserved for its decisions - The terms of reference and membership of Board Committees - Powers delegated to those Committees - The Group's corporate governance practices and procedures and the latest financial information about the Group - The legal and regulatory responsibilities as a Director and, specifically, as a Director and Chair of a listed company. As part of the induction programme, they meet with key senior leaders, so from the outset they have access to people throughout the organisation to help them form their own independent views on the Group, its performance and the sector we operate in. In addition, they meet with representatives of the Company's key advisers. Arrangements are made for each Director to visit key locations to see our business operations and properties first-hand and the Higher Education institutions with which we partner. 89 --- GOVERNANCE # OUR SECTION 172 STATEMENT Meeting the needs and expectations of our stakeholders is fundamental to delivery of our purpose, creating a Home for Success. The Board of Directors makes this statement in accordance with Section 172(1)(a) to (f) of the Companies Act 2006. This statement sets out how the Board of Directors has acted to promote the success of the Company for the benefit of the members, having regard to the interest of stakeholders in their decision-making, as further detailed below for the year ended 31 December 2024. ## THE LIKELY CONSEQUENCES OF ANY DECISION IN THE LONG TERM AND DESIRABILITY TO MAINTAIN A REPUTATION FOR HIGH STANDARDS OF BUSINESS CONDUCT Acting in the long-term interests of the business and for all our stakeholders is central to the Board's decision-making process and shapes the Group's strategy. To help the Board understand our wider stakeholder relationships and inform the Board's decision-making, the Board receives regular updates from the Executive team, as well as the wider senior leadership team. In all decision-making, the potential impact on our stakeholders is taken into account, together with the likely consequences of these decisions in the long term and also the desirability of the Company maintaining a reputation for high standards of business conduct. The Board maintains oversight of the Company's performance and reserves specific matters for approval, including significant new strategic initiatives and major decisions relating to capital raising and allocation. Through measurement against long-term objectives, the Board monitors how management is acting in accordance with the Board's agreed strategy and the long-term interests of our key stakeholders. ## THE INTERESTS OF OUR EMPLOYEES As a service business providing homes for 68,000 young people, who are often living away from home for the first time, the Board recognises the importance of our people and the role they play in delivering our Home for Success purpose. The Board receives regular feedback through Unite Live sessions held with our Chief Executive and other members of the senior leadership team. These sessions enable employees to ask questions directly and for the Board to understand the issues that matter most to our teams and take that into account in Board-level decision-making. Our commitment to employee engagement can be seen by our regular employee engagement surveys where we take the feedback received and turn it into meaningful action. During 2024 this included the launch of My Impact, our performance enablement framework which supports learning and goal setting. Through our employee engagement forum, Culture Matters, the Board received regular feedback from our Non-Executive Director for Workforce Engagement for the year, Ilaria del Beato. During 2024, Ilaria attended the Culture Matters meetings and heard first-hand the context and debate while demonstrating the commitment of the Board. Through our annual Diversity, Equity, Inclusion and Belonging (DEIB) survey completed by employees, the Board was able to better understand employee needs and assess our progress. You can read more about Culture Matters on pages 83 and 86. ## THE NEED TO ACT FAIRLY BETWEEN MEMBERS OF THE COMPANY The Board recognises that acting fairly in the interests of all shareholders increases investor confidence, reduces our cost of capital and ensures good governance. This also supports the ability of the business to invest and grow through access to capital when it is required. We provide all investors with equal access to information through our public reporting of financial results and trading statements, as well as additional disclosures in areas such as sustainability through our corporate website. Our Annual General Meeting also provides an opportunity for all shareholders to have their say. We engage regularly with investors throughout the year and the Chair of the Board engages with shareholders on governance matters. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- During 2024, the Board supported the ‘Enhanced Scrip Dividend alternative’, approved by shareholders at the 2024 Annual General Meeting. The enhanced scrip dividend was offered to all shareholders and encouraged greater participation in the scrip scheme, while retaining additional capital in the business. ## THE NEED TO FOSTER BUSINESS RELATIONSHIPS WITH OUR KEY STAKEHOLDERS INCLUDING OUR CUSTOMERS, UNIVERSITY PARTNERS AND SUPPLIERS ### Our customers Our regular customer surveys provide opportunities for students to provide direct and independent feedback so that we can understand what is important to them and also on wider topics. The Board reviews the Net Promoter Score from our student surveys which help the Board decide where to invest in our customer offer to ensure we deliver value-for-money and a Great Place to Live. The Board supported the launch of the new MyUnite app and website during 2024, a customer-focused initiative designed to foster good relationships with incoming students and further enhance customer service. The Board also received regular updates and feedback following the roll-out. ### University partners University partners are key strategic stakeholders, directly accounting for around half of our reservations each year under nomination agreements and the other half indirectly through their students who book directly with us. The reputation, health and future growth of our university partners remains central to our business prospects. The Group supports the growth ambitions of its university partners through a range of different approaches from single-year accommodation arrangements to more strategic on-campus relationships. Our Higher Education Engagement team and Student Support team meet regularly with university leaders and teams at various levels, enabling us to discuss this strategic planning as well as day-to-day operational requirements. This feedback is shared with our Board who in turn consider our strategies for delivering value to universities. Through collaborative relationships with Higher Education providers, our student support team provides the Board with insight into trends and specific themes relating to student wellbeing across the Higher Education sector. Our annual Higher Education engagement survey provides the Board with key insight into our reputation and performance with our university partners as further detailed as part of our Higher Education trust operational KPI on page 17. This helps inform the way we improve our product and service. The Board is also regularly updated on trends in the Higher Education sector in the UK and globally, which inform the Group’s strategy around the universities with which it seeks to partner over the long term. ### Suppliers We work with a wide range of suppliers across our operations and development activities to deliver a high-quality, affordable customer offer. Our teams maintain strong relationships with suppliers and ensure that the contractors we use have the right skill set and accreditations to undertake the work in our buildings. The Board recognises the importance of supplier relationships and is provided with regular updates throughout the year. During 2024, the Board had oversight of the continued implementation and progress of our Sustainable Procurement framework. This framework includes our sustainable procurement policy, setting standards for suppliers to have policies in place regarding the minimum legal age of employment and compliance with local laws regarding working hours and overtime. During 2024, the Board were supportive of our approach to introduce a mandatory requirement for all suppliers to adhere to our Supplier Code of Conduct and enhance our modern slavery requirements, including enhanced vetting for higher risk categories of supply. You can read more about our sustainable procurement framework on page 92. ### Our impact on the community and the environment We are passionate about making a positive and lasting impact on our neighbours, society and the planet. To maximise the value we create for communities and ensure our ability to continue to operate and grow within them, we seek to play an active role in local communities and build trusted, long-term relationships with community partners. We are always working for the long term and we are proud to contribute to local housing needs. This can be seen in the Board’s continued support for our development activity where we actively engage with local communities to ensure the design of our buildings, public spaces and community facilities also meets their needs. During 2024 the Board and Sustainability Committee received regular updates on our Positive Impact programme which encourages our people and teams to work with local stakeholders on community impact initiatives. Through engagement with local communities, the programme has helped our people better understand sustainability and social responsibility. As a Great Place to Live, Work and Invest, we THE UNITE GROUP PLC Annual Report and Accounts 2024 91 --- GOVERNANCE # OUR SECTION 172 STATEMENT continued proactively manage environmental, social and governance risks. We understand the significant contribution that property makes to global carbon emissions and how essential it is that we play our part in the fight against climate change. Through the Sustainability Committee, the Board has oversight of our environmental impact through continued review of our sustainability framework. This strategy specifies clear targets to reduce our environmental impact over time. In addition, our Net Zero Carbon Pathway, published in December 2021, details our approach to reach net zero carbon across our operations and developments in support of our 2030 targets. Engagement around environmental impact comes indirectly through feedback from investors, students, universities and local communities, all of which is considered by the Board in its decision-making. Further information on our sustainability framework can be found on page 43. We have highlighted some key decisions demonstrating how the Board has taken Section 172 matters into account in decision-making: ## CUSTOMERS: ### Student wellbeing The Board oversees the continued development and improvement of our Support to Stay framework, built into our operating platform. This framework provides a holistic approach to wellbeing and support services. You can read more about our Support to Stay framework on pages 12 and 45. ## INVESTORS: ### £450m capital raise Following consultation with a significant number of our shareholders, the Board approved a capital raise of approximately £450 million in July 2024. Through the raise the Board acted to promote the long-term sustainable success of the Company. This capital raise will be used to support continued investment into our market-leading platform, and the acquisition of new assets from Unite Student Accommodation Fund. It will also help support our Newcastle University joint venture, enhancing future returns for shareholders through delivery of new housing, which supports the growth of our university partners while contributing to wider society. The successful completion of the capital raise is evidence of the strong investor support for the Board's decision-making in this area. ## ENVIRONMENT: ### Sustainable procurement The Board recognises the challenges associated with addressing our operational Scope 3 emissions (outside construction) and is aware that 99% of our third-party carbon footprint is attributable to our Tier 1 suppliers. With this in mind, the Board endorsed a renewed emphasis by our procurement and sustainability teams on gathering data and setting baselines during the year, as well as enhancing our approach to ethical procurement. The Board also supported our first sustainability day, which was focused on sharing best practices among our highest impact suppliers. Looking ahead to 2025, the Board will continue to monitor progress in this area. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- BOARD ACTIVITIES ## Directors' attendance at meetings | Board Director | Member since | Audit & Risk Committee Number of meetings: 5 | Remuneration Committee Number of meetings: 3 | Nomination Committee Number of meetings: 2 | Health & Safety Committee Number of meetings: 4 | Sustainability Committee Number of meetings: 4 | | --- | --- | --- | --- | --- | --- | --- | | Richard Huntingford | 2020 | 8 | — | 2 | — | — | | Joe Lister | 2008 | 8 | — | — | 4 | 4 | | Michael Burt | 2024 | 8 | — | — | — | — | | Ross Paterson | 2017 | 8 | 5 | 3 | — | 4 | | Ilaria del Beato^{1} | 2018 | 8 | 5 | — | 4 | 4 | | Dame Shirley Pearce^{2} | 2019 | 8 | — | 3 | 4 | 4 | | Professor Sir Steve Smith^{3} | 2020 | 8 | 5 | 3 | 3 | — | | Nicky Dulieu | 2022 | 8 | 5 | 3 | — | — | | Angela Jain | 2023 | 8 | — | — | 4 | — | | Thomas Jackson | 2019 | 8 | — | — | — | — | 1. Ilaria del Beato stepped down from the Health & Safety Committee on 31 December 2024. Ilaria joined the Remuneration Committee on 1 January 2025. 2. Dame Shirley Pearce stepped down from the Remuneration Committee on 31 December 2024. 3. Professor Sir Steve Smith was unable to attend the June 2024 Health & Safety Committee due to exceptional circumstances. ## Board activities 2024 | Governance | Strategy | Financial & risk management | People | Operational & commercial | | --- | --- | --- | --- | --- | | JANUARY Setting 2024 forward agenda | JANUARY Strategy review | JANUARY Preliminary results | JANUARY Employee engagement update | JANUARY Higher Education update | | FEBRUARY Approval of Annual Report | FEBRUARY Property valuer market update | Key themes | Remuneration review | University partnership update | | MAY Annual General Meeting | Disposals update | FEBRUARY Preliminary results | MAY Health & Safety update | FEBRUARY Market review | | Regulation review | MARCH Strategy update | Final dividend | MAY People and Culture review | MARCH Newcastle property visit | | JULY Approval of £450m capital raise | Data and technology update | MARCH IR review and feedback | SEPTEMBER Student support update | Property and investment update | | NOVEMBER Sustainability and social impact update | MAY Public affairs strategy | MAY Defence planning | NOVEMBER Succession planning | JULY Commercial review | | BOARD & Committee Performance feedback | JULY Data and technology update | JULY Interim results | DECEMBER Pay award and bonus scheme | SEPTEMBER Market review | | DECEMBER Whistleblowing review | SEPTEMBER Strategy-focused day | Interim dividend | | Higher Education engagement review | | Committee terms of reference review | DECEMBER Group strategy review | Principal and emerging risks | | NOVEMBER Development and asset management review | | | Annual tax strategy review | SEPTEMBER Interims feedback | | | | | Data and technology review | NOVEMBER Budget 2025 themes | | | | | | DECEMBER Principal and emerging risks review | | | | | | Budget 2025 approval | | | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # BOARD ACTIVITIES continued ## STRATEGIC OBJECTIVE ### Great Place to Live | Board's governance role | Link to principal risk | What the Board did in 2024 and its decision-making | | --- | --- | --- | | Safety, health and wellbeing: Governance to ensure the health, safety, wellbeing and security of our customers is paramount Throughout 2024, fire safety and security remained priorities. | Operational risk Major health and safety incident in a property or a development site **Read more** p58 | The Board reviews the safety measures in place for our students, visitors and employees, as well as contractors at our development sites, at each Board meeting. **Fire safety:** the Board and the Health & Safety Committee review and challenge our fire safety programme, a critical part of our health and safety strategy. The Board is committed to the business being a leader in fire safety standards through a proactive, risk-based approach embedded across the business and ensuring that students and our employees are kept safe. The Board also oversees our cladding remediation programme and related spending. The Board and Health & Safety Committee review and monitor our implementation of The Building Safety Act 2022, which has been fully embedded into day-to-day working of the business. **Security:** the safety of our students and employees is paramount and through oversight of the Board and the Health & Safety Committee, we continued to progress with the full review of security across the entire estate and implement additional security measures where needed. Planned improvements to security will continue into 2025. **Read more in the Health & Safety Committee Report** p108 | | Ensuring our product is affordable and provides good value-for-money for our customers. | Market risks Demand reduction: driven by value-for-money/affordability **Read more** p57 | Board analysis of the Higher Education accommodation sector, and ensuring we continue to offer an affordable and value-for-money product. Board analysis of our customer offer and how we service undergraduate first-year students through lettings to universities under nomination agreements. Also, considering the opportunities to tailor our customer proposition to better meet the needs of returning students seeking greater independence and postgraduate and international students who may be willing to pay a premium for a higher level of service. Board oversight of the refurbishment of our pilot purpose-built build-to-rent property in Stratford, East London. This pilot will test our operational capability to extend our accommodation offer to young professionals and retain them as customers as they move on to the next stage in their lives. **Read more about Operations review** p24 | | Governance to ensure our best-in-class operating platform delivers for our customers and university partners. | Market risks Supply and demand **Read more** p57 | Through our direct engagement with Vice Chancellors and other levels of Management within universities, the Board is able to take into account the views of these stakeholders, as well as monitoring and measuring our performance. During 2024, Board oversight of the launch of the new customer app and website, which includes features such as flat chat, property updates, access to 24/7 wellbeing and service support. The Board also had oversight of the performance of our operating platform and continued improvements. **Read more about Operations review** p24 **Read more about Stakeholder engagement** p90 | | Ensuring our safe and secure promise extends to keeping our customers' and employees' personal data safe and secure. | Technology risk Information Security and Cyber threat **Read more** p61 | Board review of our technology and information security and its governance. IT security, in particular cyber risks, were considered during 2024 in both Board and Audit & Risk Committee reviews. | 94 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- STRATEGIC OBJECTIVE Great Place to Work ^{}[] | Board's governance role | Link to principal risk | What the Board did in 2024 and its decision-making | | --- | --- | --- | | Employee wellbeing governance to ensure the health, safety, wellbeing and security of our 2029 employees is paramount. | Operational risk Major health and safety incident in a property or a development site | The Board has designated one of its Non-Executive Directors to help ensure the views and concerns of the workforce are brought to the Board and taken into account. | | Diversity, equity and inclusion The Board monitors progress against our values. | Read more p58 | Through our Culture Matters forum, the Board monitors employee engagement and issues which are important to our employees. The Board also has oversight of our Diversity, Equity, Inclusion, Belonging (DEIB) and Wellbeing strategy and progress against objectives. Read more about employee wellbeing and DEIB initiatives under Workforce engagement p86 | | Leadership development and succession planning/talent pipeline. | Market risk Supply and demand Read more p59 | The Nomination Committee focuses on Board succession, as well as our broader talent pipeline and leadership development. During 2024, the Nomination Committee focused on ensuring the successful implementation of the change in our CEO, CFO and Executive team and Angela Jain taking over from Ilaria del Beato as our Workforce Engagement Non-Executive Director. Read more about succession planning/talent pipeline p98 | STRATEGIC OBJECTIVE Great Place to Invest ^{}[] | Board's governance role | Link to principal risk | What the Board did in 2024 and its decision-making | | --- | --- | --- | | Property/development pipeline: Board scrutiny of city and site selection for new developments against a backdrop of increasing competition for the best sites. Governance of developments/acquisitions to ensure they run to budget and schedule and are earnings accretive. | Property/development risk Read more p58 | Board oversight of: 1. Our proposed joint venture with Newcastle University. This joint venture will provide 2,000 beds at the university's Castle Leazes site in Newcastle, due for completion in 2028 and 2029 2. Delivery of our new 2024 property: the 271-bed Bromley Place in Nottingham, with a total development cost of £34 million 3. Oversight of progress of two new developments, Merdian Square in Stratford, London and Freestone Island in Bristol and progress with the construction of a new 719-bed property in Stratford, London, for delivery in time for the 2026/27 academic year. Read more in the Development and partnership activity p30 | | Disposals: Board governance of our portfolio recycling as we increase our exposure to the UK's best universities, while generating capital to invest in further investment activity. | Property/development risk Read more p58 | Board oversight of the sale of six properties with sales proceeds of £184 million which will be reinvested into the improvement of our estate and to meet redemption requests in USAF. Read more in the Disposals p32 | | Dividend Policy: Board governance of our Dividend Policy. | Financing risk Read more p61 | Board focus on dividend payments with a payout ratio of 80% of adjusted EPS. The Board also considered and recommended the adoption of an enhanced scrip dividend for the 2023 final dividend. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # BOARD ACTIVITIES continued ## STRATEGIC OBJECTIVE ## Great Place to Invest (continued) ![img-86.jpeg](img-86.jpeg) | Board's governance role | Link to principal risk | What the Board did in 2024 and its decision-making | | --- | --- | --- | | Sustainability and ESG: as a listed plc and responsible and trusted business, our wider stakeholders demand we proactively manage environmental, social and governance risks. The Board oversees the setting and implementation of our sustainability framework, which has the overarching ambition for Unite Students to clearly lead the living sector on sustainability issues and be in the leading pack of real estate companies in the wider sector. | Sustainability risk Read more p60 | The Board continued its oversight of our sustainability framework and Net Zero Carbon Pathway, built on science-based targets validated by the SBTi, to achieve our objective of becoming net zero carbon across both the Company's operations and development activities by 2030. The Board also interrogated our ongoing ESG regulatory and reporting compliance. The Board considered the specific climate change risks, identifying them across: Regulatory risk; Physical risk; Transition risk; and Stakeholder risk. The Board considered the impact of these risks and oversees the assurance of the corresponding risk management. The Board were supportive of £10.2 million capital investment into energy efficiency projects delivering energy savings. Board oversight of the Group's first sustainable construction framework published in 2023. This framework had a successful first year of implementation and progress against carbon targets. Read more about sustainability p43 | | Fire safety: proactive Board oversight of improvements in fire safety and demonstrating leadership on cladding remediation. | Operational risk Major health and safety incident in a property or a development site Read more p58 | The Board continued to oversee the cladding remediation programme and ongoing investment plan. | | Higher Education Government Policy: Continued focus on potential Higher Education Government Policy changes. | Market risk Supply and demand Read more p57 | Ongoing Board monitoring of Higher Education Government Policy and its impact for PBSA and universities more widely. | | Covenants' compliance: Group Board oversight of our covenants' compliance. | Financing risk Read more p61 | The Board monitors covenants' compliance across a range of income/stress scenarios to ensure that if any risks emerge, the Board is ready to identify further action and work with lenders well in advance. Covenant compliance is also overseen by the Audit & Risk Committee and by the external audit review of our covenant compliance through the going concern process. Read more in the Financial review p35 | | Capital structure: Group Board focus on a strong and flexible capital structure, which can adapt to market conditions, and reducing and diversifying the cost of funding. | Financing risk Read more p61 | The Board approved the £450 million capital raise in July 2024 which received strong investor support. The proceeds will be used to support our joint venture with Newcastle University, acquisition of new assets in USAF and our committed pipeline and increased investment into our existing estate through asset management projects to enhance future returns. During the year, the Board supported the establishment of a £2 billion Euro Medium Term Note (EMTN) debt issuance programme in addition to a new eight year £400 million bond issue under the new EMTN programme. We also harmonised the existing 2029 Liberty Living Finance plc bonds with the EMTN programme and substituted Unite Group plc as the issuer of this bond, in place of Liberty Living Finance plc. Read more in the Financial review p35 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # 2024 PERFORMANCE REVIEW Each year, we conduct a performance review of the Board and its Committees. This review considers the balance of skills, experience, independence and knowledge, diversity, how the Board works together as a unit and other factors relevant to performance. An externally facilitated performance review takes place every third year. During 2024, the review was conducted internally with the next external review expected during 2026. # PERFORMANCE REVIEW PROCESS The 2024 review was conducted using anonymous online questionnaires provided by Thinking Board Evaluator, created by Independent Audit Limited. Save in relation to its provision of prior board performance review services, Independent Audit Limited has no other connection to the Company or any of its Directors. This enabled comments on a range of issues, including Board and Committee performance, culture, the content and scope of topics covered at Board and Committee meetings, the nature and dynamics of Director contributions at meetings and that of Board and Committee Chairs. The questions were consistent with previous years to provide comparative results. # CONCLUSION FROM THIS YEAR'S BOARD AND COMMITTEE PERFORMANCE REVIEW The Board and its Committees continue to operate effectively, fulfilling their oversight and governance responsibilities to a high standard. Areas of strength included the skills and experience of the Non-Executive Directors, with robust challenge and helpful support for the Executive team. The review concluded that the Board is effective in how it develops, and oversees the implementation of, the Group's strategy, while ensuring the views of stakeholders and wider issues around sustainability are taken into account. The Board's decision-making continues to be led by our purpose and aligned with our values. The key areas where there are opportunities for further development include: - technology and cyber risks – understanding how technology and innovation enables our strategy and delivers for customers, along with the challenges posed by IT and cyber risks in this dynamic area - monitoring operational performance – ensuring our operational policies and procedures are consistently implemented across the business - overseeing culture – ensuring our people performance management and leadership development drives operational consistency and develops the workplace culture we want - succession planning – following the successful implementation of the change in our Chief Executive and CFO through 2024, the Board can now focus more on our wider senior leader strength and talent pipeline. The Board and each of the Committees reviewed the outcomes and have developed an implementation plan. No changes to the Board are anticipated following this performance review. # PROGRESS AGAINST THE 2023 BOARD PERFORMANCE RECOMMENDATIONS ## 2023 Board performance recommendations 1. A better understanding of how technology is enabling our strategy 2. A better understanding of the IT security challenge, particularly cyber risks and mitigations 3. Improve Board awareness of culture 4. More time to discuss and contribute to our strategy ## Progress against these recommendations Technology and strategy have been a Board focus in 2024 and this will continue in 2025 given the dynamic nature of this topic. IT security, in particular cyber risks, were reviewed by both Board and Audit & Risk Committee. Our people strategy was regularly discussed in Board and Committee meetings. A culture audit was also undertaken across the business during 2024. Consistent people performance management and leadership development is an area of focus through 2025. The Board were better able to contribute to the development of our strategy following the introduction of strategy workshops during the year with a separate day focused solely on strategy. 97 --- GOVERNANCE # NOMINATION COMMITTEE # People Governance ![img-87.jpeg](img-87.jpeg) Succession planning and talent pipeline remains the Committee's primary focus. Committee membership Richard Huntingford Chair of the Nomination Committee Nicky Dulieu Senior Independent Director Ross Paterson Non-Executive Director Ilaria del Beato Non-Executive Director Dame Shirley Pearce Non-Executive Director Thomas Jackson Non-Executive Director Professor Sir Steve Smith Non-Executive Director Angela Jain Non-Executive Director # NOMINATION COMMITTEE CHAIR'S OVERVIEW The Committee is focused on succession planning, as well as growing the diversity of the Board and our senior leadership with ongoing monitoring of our talent pipeline and bench strength. # COMPOSITION The Committee consists of all the Non-Executive Directors. At the invitation of the Committee, other people may be invited to attend meetings of the Committee if considered desirable in assisting the Committee in fulfilling its role. # ROLE OF THE NOMINATION COMMITTEE The role of the Committee is to: - Ensure that appropriate procedures are adopted and followed in the nomination, selection, training, evaluation and re-election of Directors and for succession planning, with due regard in all cases to the benefits of diversity on the Board - Regularly review the structure, size, composition, skills and experience of the Board and to make recommendations with regard to any adjustments considered necessary - When it is agreed that an appointment to the Board should be made, lead a selection process that is formal, rigorous and transparent - Be responsible for identifying, reviewing and recommending candidates for appointment to the Board. # REVIEW OF SUCCESSION PLANNING During the year, the Committee's focus was ensuring the successful transition of our Chief Executive Officer and Chief Financial Officer, and changes in the wider Executive team, introduced at the start of 2024. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-88.jpeg](img-88.jpeg) # RICHARD HUNTINGFORD CHAIR OF THE NOMINATION COMMITTEE The Committee also reviewed the composition of the Board and its Committees, as well as the change in our Designated Non-Executive Director for Workforce Engagement, with Angela Jain taking over this role at the start of 2025 from Ilaria del Beato who had performed this role for four years. See page 86 for more information. The Committee believes the Board currently has the correct balance of skills, experience, independence and knowledge. During 2025, the Committee will focus on our wider senior leadership talent mapping and bench strength, ensuring we are growing and nurturing our talent and developing the potential of our high performers. Our diversity and inclusivity initiatives (outlined below) are aligned with this talent mapping. Although no new appointments were made during the year, the Committee confirms that all appointments are subject to a formal, rigorous and transparent procedure based on merit and objective criteria. The Board seeks to promote diversity of gender, social and ethnic backgrounds, as well as cognitive and personal strengths. ## DIVERSITY AND INCLUSION The Board recognises that diversity and inclusion is fundamental to the culture of the Group, our purpose of Home for Success and ultimately our long-term sustainability. With employees a key stakeholder and at the heart of our business, the Board's focus is on creating a workplace where people feel they belong and can bring their whole and true selves into the workplace. Our values recognise this, especially Unite as One. The Board continues to oversee the development and growth of our employee forum, Culture Matters, to ensure the employee voice is front and centre in shaping our people strategy. Through listening and feedback from across the business, we launched our first Diversity, Equity, Inclusion, Belonging and Wellbeing strategy, We are US. This strategy continues to be authentic to the business and recognises our responsibility to create healthier and happier workplaces, striving for more equitable and sustainable futures. ## BOARD DIVERSITY POLICY The Board and Nomination Committee drives the agenda for diversity across the business. We are making progress, but recognise we still need to do more. The objectives of the Board's Diversity Policy are to ensure that Board and Committees of the Board appointments: (a) are made on merit and relevant experience, while taking into account the broadest definition of diversity (which includes factors such as ethnicity, sexual orientation, disability and socioeconomic background, as well as age, gender, education and professional background) (b) ensure Unite Students has, on an ongoing basis, the most effective Board and leadership team to operate the business for the benefit of all its stakeholders. The Committee ensures that when recommending appointments to the Board, the retained search firm places an emphasis on putting forward candidates who would enhance the overall diversity of the Board and seeks to appoint search firms that are signatories to the Enhanced Voluntary Code of Conduct for Executive Search Firms where practicable. On an ongoing basis, the Committee keeps under review the tenure and experience of the Executive and Non-Executive Directors to ensure the Board, and the respective Committees, has an appropriate and diverse mix of skills, experience, knowledge and diversity. Details of the implementation of the Board's Diversity Policy, and results during 2024, are set out in our detailed diversity-related reporting below. ## BOARD AND SENIOR LEADERSHIP DIVERSITY The Company reports our Board and Executive management diversity data, as at 31 December 2024, in accordance with the UK Listing Rules targets and associated disclosure requirements. As of 31 December 2024, the Board comprised 40% women, one of the four senior positions on the Board was held by a woman and there was one Director from an ethnic minority background. The Board's ambition is to ensure diversity at all levels of the Company and as at 31 December 2024, has complied with the Parker Review's recommendation that each FTSE 100 Board should have at least one director of colour by 2024. The Board continues to review its composition on an ongoing basis and, THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # NOMINATION COMMITTEE continued in line with the Parker Review, the Company has set a target of 10% ethnic minority representation in senior leadership by 2025, ahead of the 2027 target. As of 31 December 2024, representation stands at 7%. While progress has been made, there is more to do. Focus remains on strengthening the talent pipeline, refining hiring and leadership development, and driving long-term, sustainable progress at senior levels. ## GENDER IDENTITY AS AT 31 DECEMBER 2024 | | Number of Board members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) | Number in Executive management | Percentage of Executive management | | --- | --- | --- | --- | --- | --- | | Men | 6 | 60% | 3 | 4 | 67% | | Women | 4 | 40% | 1 | 2 | 33% | | Not specified/prefer not to say | 0 | 0% | 0 | 0 | 0% | ## ETHNICITY AS AT 31 DECEMBER 2024 | | Number of Board Members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) | Number in Executive management | Percentage of Executive management | | --- | --- | --- | --- | --- | --- | | White British or other White (including minority-white groups) | 9 | 90% | 4 | 5 | 83% | | Mixed/Multiple Ethnic Groups | 0 | 0% | 0 | 0 | 0% | | Asian/Asian British | 1 | 10% | 0 | 1 | 17% | | Black/African/Caribbean/Black British | 0 | 0% | 0 | 0 | 0% | | Other ethnic group | 0 | 0% | 0 | 0 | 0% | | Not specified/prefer not to say | 0 | 0% | 0 | 0 | 0% | ## APPROACH TO DATA COLLECTION Gender and ethnicity data for the Board and Executive management is collected on an annual basis through a standardised process managed by the Company Secretary. Each Director and member of the Executive management team is asked to complete a standard form questionnaire on a confidential and voluntary basis, through which the individual self-reports on their ethnicity and gender identity (or can specify that they do not wish to provide such data). The criteria of the questionnaire are aligned to the definitions specified in the UK Listing Rules and set out in the tables above: - Self-reported gender identity – selection from (a) male, (b) female or (c) not specified/prefer not to say - Self-reported ethnicity – selection from (a) White British or other White (including minority-white groups), (b) mixed/multiple ethnic groups, (c) Asian/Asian British, (d) Black/African/Caribbean/Black British, (e) other ethnic group or (f) not specified/prefer not to say. The Company's approach to data collection is consistent for the purposes of all diversity-related reporting requirements under the UK Listing Rules and across all individuals in relation to whom data is being reported. ## Gender diversity for the purposes of the UK Corporate Governance Code ## GENDER DIVERSITY As of 31 December 2024, the number of women in the Executive Committee and their direct reports (including the Company Secretary as required by the UK Corporate Governance Code) was nine (out of a total of 28) representing 32% of this group. | | Male | Female | Total | | --- | --- | --- | --- | | Executive Committee (including Company Secretary) | 5 | 2 | 7 | | Direct Reports | 14 | 7 | 21 | | Total | 19 | 9 | 28 | | Total | 68% | 32% | 100% | Richard Huntingford Chair – Nomination Committee 25 February 2025 100 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- AUDIT & RISK COMMITTEE # Financial Governance ![img-89.jpeg](img-89.jpeg) ## ROSS PATERSON CHAIR OF THE AUDIT & RISK COMMITTEE The Audit & Risk Committee provides Board oversight of the Group's financial reporting process, the audit process, the system of internal controls, and the identification and management of significant risks. ## Committee composition **Ross Paterson** Chair of the Audit & Risk Committee **Ilaria del Beato** Non-Executive Director **Nicky Dulieu** Non-Executive Director **Professor Sir Steve Smith** Non-Executive Director ## CHAIR'S OVERVIEW During the year, the Committee provided Board oversight to reassure stakeholders and shareholders that their interests are properly protected through the Group's financial management and reporting. It worked to a structured programme of activities; agenda items coincided with the financial reporting cycle and the Board was regularly updated. The Committee has continued to monitor the integrity of the financial statements and supported the Board with its ongoing monitoring of the risk management and internal control systems. It determined internal audit activity, reviewed findings and considered progress by management in implementing recommendations. It challenged the approach to assess the Group's ability to continue as a going concern and its loan covenant compliance, by reviewing various scenarios for future performance. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Audit & Risk Committee During September, we reviewed the Committee's performance and shared the results in the December committee meeting, which determined it was working effectively meeting the Audit Committees and the External Audit: Minimum Standard. Areas of performance identified for strengthening have been captured in the Committee's priorities for 2025. This year, we undertook a full evaluation of the Deloitte audit approach to ascertain the effectiveness of the external audit function. We are satisfied with both the auditor's independence and audit approach and have recommended to the Board that Deloitte be reappointed as auditor in 2025. While oversight of internal audit and risk management is insourced, we consider the team independent of management, with a direct line of communication to the Chair of the Audit & Risk Committee. As is usual with an internal team, there are areas where it is appropriate to engage third parties to undertake specific pieces of work. The Board delegates certain duties, responsibilities and powers to the Audit & Risk Committee, so that these can receive focused attention. The Committee acts on behalf of the full Board, and the matters reviewed and managed remain the responsibility of the Directors as a whole. ## Role of the Committee The Audit & Risk Committee has delegated authority as set out in its written terms of reference. These take account of the recommendations of the Code and are available for inspection at the registered office, the AGM and on the Group website at www.unitegroup.com/about-us/corporate-governance. The Committees' key objectives are: - To provide effective governance and control over the integrity of the Group's financial reporting and review significant financial reporting judgements - To support the Board with its ongoing monitoring of the effectiveness of the Group's system of internal controls and risk management systems - To monitor the effectiveness of the Group's internal audit function and review its material findings - To oversee the relationship with the external auditor, including making recommendations to the Board on appointment and monitoring objectivity and independence. ## Committee Composition Committee members are all independent Non-Executive Directors appointed by the Board. The Chair is a chartered accountant with substantial experience in senior finance roles, including as Chief Financial Officer of a UK-listed company and as Audit Committee chairs of other listed and non-listed companies in the UK. The Committee as a whole has competence relevant to the sector in which the Group operates. Notably, Ilaria del Beato has extensive experience of the real estate sector and Professor Sir Steve Smith has extensive experience of Higher Education. ## Meetings The full Audit & Risk Committee meets five times a year and attendance is shown on page 93. Meetings are scheduled to coincide with key dates in the financial reporting cycle and agendas are agreed by the Committee and reviewed on an ongoing basis. During 2024, the Chair of the Board, the Chief Financial Officer, the Chief Executive Officer, Chief Operating Officer, Director of Health and Safety, the Head of Portfolio Management, Head of Risk, and the Group Finance, Risk & Assurance Director attended by invitation. The external auditor, Deloitte, attended most meetings. The Committee regularly meets separately with Deloitte without others present. Deloitte meets the Finance, Risk & Assurance Director to receive an update on any audit findings and how risks are being managed; Deloitte considers the impact of these. ## Main Activities Meetings generally take place just prior to a Group Board meeting so that matters can be reported. The Committee reviewed the half-year and annual financial statements and the significant financial reporting judgements. As part of this review, the Audit & Risk Committee supported the Board by reviewing the financial viability and the basis for preparing the accounts on a going concern basis. This included challenging forecast cash headroom and reviewing scenarios, which were determined by management, to stress test the impact of a range of performance outcomes upon the viability of the business, in particular with regard to loan covenants. The Audit & Risk Committee also reviewed and challenged the external auditor's report on these financial statements. The effectiveness of the external audit function was considered including the independence and objectivity of the external auditor; the appropriateness of any non-audit services provided by the external auditor to the Group; the make-up and quality of the audit team; the proposed audit approach and the scope of the audit; the execution of the audit and the quality of the audit report to the shareholders and the fee structure. Reports from Group Risk & Assurance and its audit and assessment of the control environment were discussed. The Committee reviewed and proposed areas of focus for the internal audit programme to review, including how internal audit activity will continue to align to principal Group risks. --- Updates to the UK Corporate Governance Code, in particular the recent changes to provision 29, were monitored, including consideration of the impact beyond January 2026. While the provision applies to financial years beginning on or after 1 January 2026, the Audit & Risk Committee has considered the impact of this. The Audit & Risk Committee has considered the frameworks that form our material controls and how we are assured they are operating effectively. The Audit & Risk Committee will continue to review the potential impact on the Group with management to ensure that suitable reporting is delivered. ## FINANCIAL REPORTING The primary focus of the Committee, to financial reporting for the year ended 31 December 2024, was to review with both management and the external auditor the appropriateness of the half-year and annual financial statements, concentrating on: - The quality and acceptability of accounting policies and practices - The clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements - Material areas in which significant judgements have been applied or where there has been discussion with the external auditor - Whether the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy. The Committee's assessment of the Annual Report to ensure that it is fair, balanced and understandable and took into account the following considerations: - The high level of input from the Chief Executive Officer and Chief Financial Officer with early opportunities for the Board to review and comment on the Annual Report - Ensuring consistency in the reporting of the Group's performance and management information (as described on pages 16-17), risk reviews (as described on pages 52-71), business model and strategy (as described on pages 10-13 and 4-5) - A cross-check between Board Minutes and the Annual Report is undertaken to ensure that reporting is balanced - Whether information is presented in a clear and concise way, illustrated by appropriate KPIs to facilitate shareholders' access to relevant information. To aid our review, the Committee considers reports from the Group Finance Team and reports from the external auditor on the outcomes of their half-year review and annual audit. We support Deloitte in displaying the professional scepticism its role requires. ## INTERACTIONS WITH THE FINANCIAL REPORTING COUNCIL (FRC) In December, the FRC's Corporate Reporting Review (CRR) team notified us that the Group's FY2023 Annual Report and Accounts had been selected for review and confirmed there were no queries to raise following this review. There were some matters which the FRC believed could be improved for the benefit of users, and these have been taken into consideration when preparing this Annual Report. The Committee notes the FRC's review does not provide assurance that the Annual Report is correct in all material respects as the FRC's role is not to verify the information provided, but to consider compliance with reporting requirements. ## SIGNIFICANT ISSUES CONSIDERED After discussion with both management and the external auditor, the Committee determined that the key risk of misstatement of the Group's 2024 financial statements related to property valuations. ## PROPERTY VALUATIONS The Group's principal assets are investment properties and investment properties under development that are either owned on balance sheet or in USAF or LSAV. The investment properties are carried at fair value based on an appraisal by the Group's external valuers, who carry out the valuations in accordance with the RICS Red Book valuation guide, taking into account transactional evidence during the year. The valuation of property assets involves significant judgement and changes in the core assumptions could have a significant impact on the carrying value of these assets. Management discusses the underlying performance of each asset with the external valuers and provides detailed performance data including rents, university lease agreements, occupancy, property costs and costs to complete (for development properties). Management receives detailed reports from the valuers and performs a detailed review of the valuations to ensure that management considers the valuations to be appropriate. The valuation report is reviewed by the Chief Financial Officer prior to sign-off. The Committee considered the extent property valuations reflected anticipated future spend on properties, including to remediate cladding. > "During 2024, the Committee continued to focus on the quality and integrity of the financial statements alongside its oversight of risk and internal controls." > > ROSS PATERSON > CHAIR OF THE AUDIT & RISK COMMITTEE THE UNITE GROUP PLC Annual Report and Accounts 2024 103 --- # AUDIT & RISK COMMITTEE ## continued The Committee was satisfied that the Group's valuers were appropriately qualified and provided an independent assessment of the Group's property valuations. We were also satisfied that an appropriate valuation process had taken place, the core assumptions used were reasonable and so the carrying value of investment and development properties in the financial statements was appropriate. The external auditor explained the audit procedures to test the valuation of investment and development properties and the associated disclosures. Based on the audit work, the external auditor reported no inconsistencies or misstatements that were material in the financial statements as a whole. Further analysis and details on asset valuations is set out on pages 30-32. ## OTHER ISSUES CONSIDERED - ACCOUNTING FOR THE COST OF CLADDING REMEDIATION The Group has provided the estimated cost of remediating cladding on properties where there is either a legal/regulatory requirement to do so or where the Group has a constructive obligation. The Committee reviewed, challenged and agreed the basis on which costs associated with the remediation of cladding have been included in the financial statements. The Committee considered the appropriateness of where the estimated cost of remediating cladding was provided for, versus where property valuations were adjusted to take account of anticipated future spend on properties, including to remediate cladding. The Committee also reviewed, challenged and agreed the extent to which the Group had any legal or constructive obligations in respect of cladding remediation. The Committee was comfortable with the process and controls adopted by management around the disclosures, and estimation of costs and provisions associated with cladding remediation. ## RISK MANAGEMENT The Group's risk assessment process and the way in which significant business risks are managed is a key area of focus for the Committee. Our work was driven primarily by performing an assessment of the approach to risk taken by the Group's Executive Committee and senior leadership team. The Executive Committee is responsible for the delivery of the Group's risk management framework. The Executive Committee and senior leadership team set the objectives for the Group and then assess what risks could prevent the Group from meeting these objectives. This assessment resulted in a number of principal and emerging risks being brought to the Board for a detailed assessment. The Committee considered and approved both the Group's Risk Management Framework and the Group's assessment of its principal risks and uncertainties, as set out on pages 52-71. Through these reviews, the Committee considered the risk management procedures within the business and was satisfied that the key Group risks were being appropriately managed. The risk assessment flags the importance of the internal control framework to manage risk and this forms a separate area of review for the Committee. The Board formally reviewed the Group's principal risks at two meetings during the year. ## INTERNAL CONTROLS Led by the Group's risk assessment process, we reviewed the process by which the Group evaluated its control environment. The Board has delegated responsibility to management for establishing effective risk management and maintaining adequate internal controls, although the Board retains oversight responsibility. Internal controls are designed to provide reasonable assurance regarding (among other things) the reliability of financial reporting and the preparation of the financial statements for external reporting purposes. A comprehensive strategic planning, budgeting and forecasting process is in place. Periodic financial information and performance insight is reported to the Board. ## INTERNAL AUDIT The Group used the internal Group Risk & Assurance team for internal audit services throughout the year. The team continued to undertake independent audits in our operations, utilising a framework of Operational Compliance Audits for our properties. The property audits focus on safety and, where there are gaps identified, action plans. The results are shared with our Operations Performance Team, so best practice is shared to drive improvements. Also, the team completed four other pieces of internal audit work. They reviewed compliance with Senior Accounting Officer requirements; followed up on the progress of previously agreed management actions; reviewed our procure-to-pay framework and business continuity in properties; and the team also reviewed the requirements of the updated UK Corporate Governance Code and assurance mapping for our principal risks. Overall, the conclusion of all audits was that there were no significant issues and controls were well designed, but we noted there were some areas of improvement to be made to maximise controls and operational efficiency, which management is in the process of implementing. ## EXTERNAL AUDIT The effectiveness of the external audit process is facilitated by appropriate audit risk identification at the start of the audit cycle which we receive from Deloitte in a detailed audit plan, identifying its assessment of these key risks. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- For the 2024 financial year, the significant risks identified were valuation of properties and management override. These focus areas were discussed at the Committee and it was agreed that they should be the principal areas of focus as they represent the areas with the greatest level of judgement and materially impact the overall performance of the Group. These risks are tracked throughout the year and we challenged the work done by the auditor to test management's assumptions and estimates around these areas. We assessed the effectiveness of the audit process in addressing these matters through the reporting we receive from Deloitte at both the half-year and year-end and reports from management on how these risks are being addressed. The Committee was satisfied that there had been appropriate focus and challenge on the primary areas of audit risk and assessed the quality of the audit process to be good. During private meetings with the external auditor we discussed: - The auditor's assessment of business and financial statement risks and management activity - The transparency and openness of interactions with management, confirmation that there has been no restriction in scope placed on them by management and the independence of its audit - How it has exercised professional scepticism. I also meet with the external lead audit partner outside the formal process. ## EXTERNAL AUDITOR Each year, the Committee considers the reappointment of the external auditor (including the rotation of the audit partner which is required every five years). We assess independence on an ongoing basis. Deloitte was appointed as the Group's external auditor in 2015, following a tender process and this is the tenth year Deloitte has performed this role. We undertook an external audit tender in late 2023 with consideration of a change of auditor for the year ending 31 December 2025. Following the tender, the Committee, and the Board recommended Deloitte's reappointment as auditor. Stephen Craig was the Deloitte audit partner for the 2024 audit, his fifth year of fulfilling that role. Under partner rotation rules, a different partner has been identified and has met with the Committee on several occasions, the new audit partner will be responsible for the 2025 audit. The Committee reviewed Deloitte's audit work and determined that appropriate plans were in place to carry out an effective and high-quality audit. Deloitte confirmed to the Committee that it maintained appropriate internal safeguards to ensure its independence and objectivity. As part of the Committee's assessment of the ongoing independence of the auditor, we receive details of any relationships between the Group and Deloitte that may have a bearing on their independence and confirmation that they are independent of the Group. The Committee also regularly considers when it next intends to complete a competitive tender process for the Company's external audit. The Committee does not currently anticipate there will be a change of auditor before the 2026 audit cycle. The Committee confirms compliance with the provisions of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit & Risk Committee Responsibilities) Order 2014. ## NON-AUDIT SERVICES To further safeguard the objectivity and independence of the external auditor from becoming compromised, the Committee has a formal policy governing the engagement of the external auditor to provide non-audit services. No material changes have been made to this policy during the year. This precludes Deloitte from providing certain services, such as valuation work or the provision of accounting services. For certain specific permitted services (such as reporting accountant activities and compliance work), the Audit & Risk Committee has pre-approved that Deloitte can be engaged by management, subject to the policies set out above, and subject to specified fee limits for individual engagements and fee limits for each type of specific service. For all other services, or those permitted services that exceed the specified fee limits, I as Chair, or in my absence, another member of the Committee, can pre-approve permitted services. During the year, Deloitte was appointed to undertake non-audit services. Fees for non-audit work performed by Deloitte for the year ended 31 December 2024 were £0.2 million (2023: £0.1 million). The non-audit fees related to the work undertaken by Deloitte LLP in its role as external auditor to the Group for the review of the half-year report and in establishing an Euro Medium Term Note programme. Further disclosure of the non-audit fees incurred during the year ended 31 December 2024 can be found in note 2.6 to the consolidated financial statements on page 171. The Committee was satisfied that both the work performed by Deloitte LLP, and the level of non-audit fees paid to it, were appropriate and did not raise any concerns in terms of Deloitte LLP's independence as auditor to the Group. The Committee approved the fees for audit services for 2024 after a review of the level and nature of work to be performed. This included additional audit procedures required as a result of changes in the regulatory environment, and after being satisfied by Deloitte that the fees were appropriate for the scope of the work required. ## AUDIT & RISK COMMITTEE EVALUATION The Audit & Risk Committee's activities formed part of the evaluation of Board effectiveness performed in the year. Details of this process can be found under Performance evaluation. Ross Paterson Chair – Audit & Risk Committee 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 105 --- GOVERNANCE # SUSTAINABILITY COMMITTEE # Sustainability Governance During the year, the Sustainability Committee continued its oversight of our sustainability framework, which is a key component of our business strategy and is central to delivering our Home for Success purpose. ## Committee membership | Dame Shirley Pearce | Chair of the Sustainability Committee | | --- | --- | | Joe Lister | Chief Executive Officer | | Ilaria del Beato | Non-Executive Director | | Ross Paterson | Non-Executive Director | Our sustainability framework is centred on creating a positive impact across four key areas: young people, communities, our people, and the environment. During the year, the Sustainability Committee regularly reviewed the Group's performance against its targets and ambitions, to ensure Unite Students is a responsible and resilient business. With oversight from the Sustainability Committee, the Group focused on driving lasting improvements in sustainability performance supported by increased sustainability awareness and engagement across the business and with wider stakeholders. # SUSTAINABILITY COMMITTEE ACTIVITIES DURING THE YEAR ## YOUNG PEOPLE The Sustainability Committee oversaw a business-wide focus on embedding our sustainability framework, including new student engagement kitchen talks, delivered by Resident Ambassadors to students at the start of each academic year. Our Student Sustainability Week also provided a strong focus on key sustainability themes including water and energy consumption. Through the Committee's oversight, Unite Students commissioned The Social Market Foundation to deliver a report into the barriers facing care experienced and estranged students with entry and success in Higher Education, and have committed to the Care Leavers Covenant. The Care Leavers Covenant is a commitment from private, public and voluntary sectors to help support care leavers between the age of 16–25 as they move towards independence. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-90.jpeg](img-90.jpeg) # DAME SHIRLEY PEARCE CHAIR OF THE SUSTAINABILITY COMMITTEE ## LOCAL COMMUNITIES Our Positive Impact employee sustainability engagement programme (aligned with the National Union of Students Green Impact programme) saw an increase in employee volunteering and community projects, which has continued to help drive employee engagement. ## OUR PEOPLE The Committee was supportive of increased efforts to embed sustainability across the business, including a review of learning and training frameworks to support wider awareness and knowledge of sustainability. During 2024, members of the Committee joined senior leaders from across the business for an interactive session on sustainability, focusing on climate change and risk, which also highlighted the Committee's commitment to sustainability. The Committee received regular employee engagement updates from the senior leadership team and Ilaria del Beato, the Designated Non-Executive Director for Workforce Engagement during 2024. Our Culture Matters forum continued to evolve and welcomed additional Non-Executive Director attendance during the year. The Committee also heard directly from a Culture Matters representative, providing feedback to assist the Sustainability Committee in its continued monitoring of Culture Matters and the Group's DEIB strategy, We are US. The Committee oversaw the roll out of the Executive Sponsorship programme in late 2024, providing support and mentoring to our five employee Network Groups. ## THE ENVIRONMENT The Sustainability Committee continues to provide oversight of our Net Zero Carbon Pathway and track progress using reporting metrics covering the key activities for delivery of our framework. With input from the Sustainability Committee, the business continues to build on work done as an early adopter of the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations to improve our management of climate-related risk. We maintained a four-star Global ESG Benchmark for Real Assets (GRESB) rating and while the GRESB rating was just below the Threshold target set for the financial year, positive progress was made in a number of areas. Throughout 2024, the Committee monitored progress of the Sustainable Construction Framework following implementation in 2023. This framework has been key to the good progress made to embed our sustainable aspirations across our construction and the resulting reductions in new-build embodied carbon achieved. Progress was also made in respect of embodied carbon targets and operational energy performance. The Sustainability Committee also received regular updates following the launch of our sustainable procurement framework in 2023. The Committee continues to oversee the impact of our supply chain on sustainability objectives. During 2024, the Committee also had oversight of investment into energy efficiency projects and continues to review the investment required to meet our energy intensity targets. ## PRIORITIES FOR 2025 The Sustainability Committee will continue to oversee focused engagement with employees and customers to empower and encourage each to play their part in adopting sustainable behaviours. The Committee will also continue to oversee investment into energy efficiency projects during 2025 and continue to monitor the decarbonisation and climate resilience of our business to ensure our plans remain credible and meet stakeholder expectations, while protecting the business from material financial risks. Developments relating to net zero carbon and climate-related risks will be monitored to ensure the Group's net zero carbon ambition evolves to remains in line with emerging expectations, guidance and regulation in this area. The Committee will maintain oversight of our ongoing commitment to invest 1% of annual adjusted earnings into social initiatives. Dame Shirley Pearce Chair – Sustainability Committee 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 107 --- GOVERNANCE # HEALTH & SAFETY COMMITTEE # Health and Safety Governance ![img-91.jpeg](img-91.jpeg) Health and safety is at the core of everything we do. Throughout 2024, the Health & Safety Committee continued to oversee the governance and performance of health and safety practices across the business. ## Committee membership Professor Sir Steve Smith Chair of the Health & Safety Committee Joe Lister Chief Executive Officer Dame Shirley Pearce Non-Executive Director Angela Jain Non-Executive Director Ilaria del Beato Non-Executive Director (until 31 December 2024) ## HEALTH AND SAFETY FOCUS During 2024, the Health & Safety Committee continued to oversee health and safety performance across the business. This oversight is aligned with our objectives to make Unite Students a Great Place to Live, Work and Invest and during the year focused on fire safety, our cladding remediation programme and the ongoing safety and security at our properties. The Committee also continued its support for our student wellbeing framework, Suport to Stay. This provides support to help students fulfil their potential, regardless of any medical, physical or mental health difficulties. Alongside this, the Committee continued to monitor our ongoing relationships with university partners to ensure student welfare is prioritised. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-92.jpeg](img-92.jpeg) # PROFESSOR SIR STEVE SMITH CHAIR OF THE HEALTH & SAFETY COMMITTEE ## FIRE SAFETY The Committee reviewed the business's approach to fire safety, always keeping in mind the paramount importance of our responsibility to keep our customers safe and that we operate our properties in accordance with best practice aligned with the Fire Safety Act 2022 and Fire Safety Regulations 2022. All our properties continue to be confirmed as safe to operate by third-party accredited fire risk assessors pursuant to the comprehensive annual fire risk assessments completed at each property. This reflects our robust approach to fire safety across our portfolio, and our continued commitment to improving fire safety performance through proactive surveying and appropriate remediation of façades and investment in smoke control systems, passive fire protection and fire doors. We have a dedicated Fire Safety team with valuable hands-on knowledge and experience from working in fire authorities. Our Fire Safety team also work closely with fire and rescue services, local authorities, the Ministry of Housing, Communities and Local Government, as well as fire safety experts, to provide advice and guidance through the lifecycle of our buildings, from development design, occupation and through to disposal. ## CLADDING REMEDIATION PROGRAMME Through 2024, the Committee continued its oversight of the business's comprehensive cladding remediation programme, which provides significant capital expenditure to secure the safety of our customers and people. The programme is divided into phases based on the risk associated with each building, following detailed surveys of our properties to understand property specific issues. The business remediated seven buildings during 2024, bringing this to a total of 43 properties since we launched our cladding programme in 2019. The business employs a dedicated team focused solely on cladding remediation, using an established contractor base with expertise in remediating buildings to a high quality and at pace. The Committee has monitored progress through the year and ensured the operating properties remain safe to operate, with customer safety always our priority. ## BUILDING SAFETY ACT Following the implementation of the Building Safety Act, the Health & Safety Committee continues to oversee the businesses's compliance with the Act. During 2024, the Committee supported the decision to move our Primary Fire Authority to the Greater Manchester Fire and Rescue Services, conscious of their expertise with high-rise buildings. ## SAFETY AND WELLBEING OF CUSTOMERS AND OUR PEOPLE Aligned with our strategic objectives of providing a Great Place to Live and Work, the Committee has continued to oversee our focus on wider safety issues for our customers and people. The Committee has monitored safety performance through the year, comparing the levels and types of incidents with prior years. The Committee noted an increase in the number of safety incidents reported and is confident this reflects a healthy reporting culture, rather than a decrease in safety performance. Five RIDDOR operational incidents were reported in the year (2023:1). This compares favourably to the industry benchmark and highlights the positive safety culture across the business. The Committee also received regular updates from the Risk & Assurance team as they continued to undertake operational compliance audits throughout our buildings to ensure compliance. These audits are focused upon legislative, regulatory and Company policy compliance, incorporating fire safety, health and safety at work and security. ## PROPERTY SECURITY The Health & Safety Committee continued its review of the physical security of our properties to better understand the risks and create more tailored mitigation plans. Moving into 2025, the Committee will oversee the implementation of these security improvements and monitor the type and level of security incidents to understand if these security improvements are proving successful. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # HEALTH & SAFETY COMMITTEE continued ## OUR FOCUS FOR 2025 - Oversee the governance and consistency of health and safety performance across the business while prioritising the safety of our customers, people, properties and our workplace, as we strive to deliver our values. - Support our continued close relationships with our university partners to ensure student welfare is prioritised to help students deal with the financial and wellbeing pressures of university living. - Monitor the health and safety training of our frontline and operational teams so our people can assist to deliver our Trusted Landlord promise. ## DEVELOPMENT SAFETY The Committee was supportive of the comprehensive approach to safety across our development activity, which resulted in two RIDDOR reportable injuries and 21 minor incidents in 2024. This represents good safety performance against the industry norm and is within our Unite Students benchmark. During 2024, the Committee received regular updates on development safety activity and auditing of contractor performance. Work continued with contractors to ensure sites were safe to operate with a robust site safety inspection regime in place. Alongside this, our assurance site safety inspector conducted random quarterly site safety inspections. This independent inspection has provided assurance to the Committee and enabled us to verify that our framework inspector scoring is accurate and that our sites are achieving industry-leading standards, which far exceed statutory compliance. During 2024, the Committee continued to oversee the three-year charity commitment to Mates in Mind which provides mental health support and guidance at all our development sites. The Committee monitored safety observations and near-miss reporting in our development and refurbishment sites to help build a clearer picture of our day-to-day risk profile and to promote a transparent safety culture. During 2024 there was an increase in near-miss reporting, which the Committee is confident supports a positive reporting culture. Professor Sir Steve Smith Chair – Health & Safety Committee 25 February 2025 Safety performance in our development and refurbishment sites | | Hours worked | Reportable incidents | Reportable incidents industry benchmark | Reportable incident KPI | Non-reportable incidents | Non-reportable incidents industry benchmark | Non-reportable incident KPI | | --- | --- | --- | --- | --- | --- | --- | --- | | 2020 | 718,467 | 3 | 0.30 | 0.42 | 15 | 5.00 | 2.09 | | 2021 | 806,774 | 0 | 0.30 | 0 | 16 | 5.00 | 1.98 | | 2022 | 1,860,904 | 0 | 0.30 | 0 | 26 | 5.00 | 1.4 | | 2023 | 843,553 | 0 | 0.30 | 0 | 17 | 5.00 | 2.02 | | 2024 | 1,316,909 | 2 | 0.30 | 0.15 | 21 | 5.00 | 1.59 | KPI calculated as: number of incidents x 100,000 hours/hours worked. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-93.jpeg](img-93.jpeg) THE UNITT GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # REMUNERATION COMMITTEE # Remuneration Governance The Remuneration Committee provides oversight for the Board in respect of the Group's remuneration process. ## Committee membership Nicky Dulieu Chair of the Remuneration Committee Ross Paterson Non-Executive Director Dame Shirley Pearce (until 31 December 2024) Non-Executive Director Professor Sir Steve Smith Non-Executive Director Ilaria del Beato (from 1 January 2025) Non-Executive Director ## DEAR SHAREHOLDER The Directors' Remuneration Report for the year ended 31 December 2024 is split into three sections: this Annual Statement, the Policy Report and the Annual Report on Remuneration. This year, we are asking shareholders to approve a new Remuneration Policy at the Annual General Meeting. The background and the reasons for this are included in this Annual Statement. ## 2024 PERFORMANCE AND REWARD Unite Group's performance in 2024 was strong, reflecting the continued effort and commitment of our people and the strength of our proposition for students and Higher Education providers alike. Our strategy continues to focus on being a Great Place to Live, Work and Invest, with progress made against each of these objectives during the year. Unite Group's value-for-money offering, best-in-class operating platform and unrivalled student experience and support teams is evidenced by our strong occupancy performance and improvements THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-94.jpeg](img-94.jpeg) in Net Promoter Scores during the year. Our employee engagement score also saw a further improvement, recognising a new performance management framework and further efforts to empower colleagues at all levels of the organisation. On the final objective – being a Great Place to Invest – this year's financial highlights included a 16.1% increase in adjusted earnings (5.2% on a per share basis), and a total accounting return of 9.6% driven by 5.7% growth in EPRA NTA and record dividends paid. A successful £450m capital raise in the summer further strengthened our balance sheet and provides the Group with an opportunity to accelerate its investments into development and value-add assets which will deliver on our longer-term growth ambitions. ## SALARIES Joe Lister's starting salary as CEO – £606,900 – was aligned with that of his predecessor, taking into account the 2024 senior management pay increase of 5%. Mike Burt's starting salary as CFO was set at £393,750. The average salary increase across the Group was 8.8%, with a tiered approach focusing on lower-paid colleagues. ## ANNUAL BONUS The annual bonus scheme was operated in line with the policy for Executive Directors in 2024. Following a review of performance against targets set at the start of the year, the Committee confirmed that Executive Directors will each receive bonuses of 67.0% of maximum (equating to 93.8% out of a maximum of 140% of salary). The Committee has reviewed this payout in the context of overall Group performance and believes that the outcome is both fair and appropriate. Further details, including bonus targets and outcomes, are included on page 129. ## NICKY DULIEU ## CHAIR OF THE REMUNERATION COMMITTEE ## LONG-TERM INCENTIVES Following the publication of TAR results by comparators with March 2024 year-ends, the Committee confirmed the final vesting of the 2021 LTIP awards as 76.0%, consistent with the estimated outcome presented in last year's report. LTIP awards made in April 2022 reached the end of their performance period as at 31 December 2024. These awards were based on a combination of absolute EPS, relative TSR, relative TAR and two ESG metrics – operational energy intensity and EPC ratings. Based on performance recorded over the period, overall estimated vesting of the 2022 LTIP is 64.0%. Vesting of the relative TAR element will be finalised following the publication of comparator results over the coming months. Further details are included on page 130. In April 2024, Executive Directors were each granted an award under the LTIP which will vest based on performance over the three financial years to 31 December 2026. Stretching targets for the relative TAR, relative TSR, operational energy intensity and EPC ratings elements were disclosed prospectively in last year's report, while setting of the absolute EPS targets was delayed and disclosed in the 10 April 2024 market announcement. Any award vesting will be required to be held for an additional two-year period. Further details on this award are included on page 131. ## KEY RESPONSIBILITIES - Review, recommend and monitor the level and structure of remuneration for Executive Directors and other senior executives. - Approve the remuneration packages for the Executive Directors and other senior executives, reflecting the performance of the Company. - Determine the balance between base pay and performance-related elements, to align with shareholder and stakeholder interests. THE UNITE GROUP PLC Annual Report and Accounts 2024 113 --- GOVERNANCE # REMUNERATION COMMITTEE continued ## OVERALL PAY OUTCOMES FOR 2024 Taken as a whole, the Committee is satisfied that overall pay outcomes in respect of the year ended 31 December 2024 are appropriate and accordingly we have not applied any discretion to this year's incentive outcomes. ## REVIEW OF THE DIRECTORS' REMUNERATION POLICY The 2025 AGM marks the third anniversary of the adoption of the Directors' Remuneration Policy and in line with UK reporting regulations, a new Policy is being submitted to shareholders for approval. In reviewing the Policy, the Committee took into account Unite Group's historical performance and strategy, and market practice across the UK real estate sector and broader FTSE market since the Policy was approved. The Committee also considered the views of Unite Group's broad range of stakeholders. Overall, the Committee is satisfied that the existing remuneration structure – consisting of salaries, pension contributions and performance-linked short- and long-term incentives – remains appropriate. We proposed two main changes to the Policy and wrote to shareholders representing c.67% of the issued share capital, as well as to key proxy advisers, for comments and feedback at the end of 2024. In total, we received replies from shareholders representing c.45% of the issued share capital, with this feedback having been fully considered by the Committee in agreeing the final proposals, as follows: (1) Increase the annual bonus opportunity from 140% to 150% of salary. This change seeks to ensure that the Policy remains aligned to market practice for a company of Unite Group's size operating in the UK real estate sector, and provides the Committee with additional flexibility to incentivise the senior leadership team to deliver exceptional performance over the next three years. Unite Group's annual bonus opportunity has been changed only twice over the last 20 years: an increase from 100% to 144% of salary in 2008, and a subsequent reduction from 144% to 140% of salary in 2019 (as part of a simplification of the scheme). A maximum opportunity of 150% of salary would be aligned with 12 out of 16 other FTSE 350 Real Estate sector peers and would continue to be weighted at least 70% on financial performance. Shareholder feedback on this change was generally very supportive and accordingly no changes were made to the original proposal. (2) Disapply the bonus deferral requirement in cases where an Executive Director meets or exceeds their in-post shareholding guideline. This change reflects the Committee's view that bonus deferral is a means of aligning the interests of shareholders and Executives over the medium term, by facilitating the building up of a shareholding over time. However, where an Executive has acquired (through self-purchases) or earned (through share-based incentives) a significant total holding of shares – as defined by the in-post shareholding guidelines – the Committee considers it appropriate to relax the mandatory deferral requirement and allow any bonus subsequently earned to be paid entirely in cash. This represents a more competitive, and fairer approach, without diluting our clear emphasis on the importance of the alignment of Executive and shareholder interests through meaningful share ownership. The existing requirement to defer up to 50% of any amount earned for two years remains in place as an Executive Director is building towards their in-post shareholding guideline, and we have maintained rigorous and enforceable malus and clawback provisions for all variable pay. The majority of responses received on this change were supportive. One shareholder responded that the change did not align with its voting policy, while another asked the Committee to consider reducing, rather than removing, the mandatory deferral requirement (but with an exception made for the current CEO noting his already significant shareholding). The Committee re-evaluated its original proposal based on the comments received, before concluding to submit this for approval without further revision noting: (a) the balance of shareholder feedback received was supportive, and (b) other aspects of the Policy and its implementation continue to underpin strong alignment of Executive interests with those of shareholders. However, recognising that circumstances can change, and acknowledging that this is an evolving area of market practice, the Committee will keep under review the deferral mechanism at the next Policy review, to ensure it continues to remain appropriate for Unite Group. As part of the consultation, one shareholder requested further information on how the proposed changes would position the CEO relative to sector peers, which is summarised below as further context for all shareholders. This analysis illustrates that, while Unite Group is currently ranked third out of 17 companies in the sector in market cap terms, the CEO's salary is tenth highest and total remuneration is 12th highest. The cash elements of the CEO's remuneration (i.e. salary, pension and cash bonus) currently make up 52% of the total fair value of his package, ranking tenth of sector comparators (and 12th in monetary terms). With the CEO significantly exceeding his shareholding guidelines, the proposed changes to the bonus deferral mechanism would mean that the cash elements of remuneration would rise to 65% of his total pay from 2025. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- This would be the third highest in the sector in percentage terms eighth highest in monetary terms). In summary, the Committee considers that the proposals ensure that our pay structure remains appropriately positioned in the sector context. Other minor wording changes have also been reflected in the Policy, including a clearer articulation of our longstanding philosophy that Executive Director and senior executives should be paid fairly and competitively, but not excessively – reinforcing Unite Group's commitment to value for money. Finally, as our long-term incentive plan rules approach their tenth anniversary of adoption, we have taken the opportunity to ensure that the current drafting reflects best practice. Resolutions to approve the new, and largely unchanged, scheme rules for the PSP and ESOS will also be submitted at the 2025 AGM. ## IMPLEMENTATION OF THE POLICY IN 2025 ### SALARIES The CEO's salary has been increased by 2.5% with effect from 1 January 2025. The CFO's salary has been increased by 7.9% to reflect the strong start he has made in his first year in the role, and consistent with the Committee's previously-communicated intention of bringing him closer to market levels over the short to medium term. The average salary increase across the Group will be 3.9%. Unite Group maintains its commitment to being an accredited Real Living Wage employer and, for relevant individuals, has implemented the rates set by the Living Wage Foundation (5.3% in London and 5.0% across the rest of the UK). ### PENSION Total employer pension contributions for the CEO and CFO will continue to be in line with that available to the wider employee population at 11% of salary. ### ANNUAL BONUS Joe Lister and Mike Burt will each participate in the 2025 annual bonus, with maximum opportunities of 150% of salary. Up to 50% of any bonus earned will be deferred in shares for two years, unless a Director has met their in-post shareholding guideline, in which case the full bonus earned will be paid in cash. The Committee remains satisfied that the overall blend of financial and non-financial measures continues to support the Group's strategy and reinforce its values. One minor change – reducing the weighting on net debt to EBITDA from 20% to 15% and increasing the weighting on adjusted EPS from 25% to 30% – will be made to reflect an increased focus on profitability in the current business context. For all financial and non-financial elements, challenging targets have been set. Details are on page 135. ### LONG-TERM INCENTIVES Joe Lister and Mike Burt will receive an award of up to 200% of salary delivered through a combination of the PSP and ESOS. The performance metrics used for the 2025 LTIP will be substantially unchanged, save that the EPC ratings measure will be dropped and its weighting reassigned equally across the other measures. This change reflects the Group's strong performance in achieving A-C EPC ratings across its portfolio and the stretch targets of last year's award having been set at 100% achievement by 2026. Further details, including targets for each measure, are set out on page 135. ## Ranking across FTSE 350 Real Estate CEOs Each bar represents a sector peer, including Unite Group. ![img-95.jpeg](img-95.jpeg) Unite Group's current market positioning. Unite Group's market positioning under the proposed Policy and implementation for 2025. ## NON-EXECUTIVE DIRECTOR FEES The Committee resolved to delay the second stage review of the fee payable to the Chair of the Board and agreed instead a modest increase of 2.5% with effect from 1 January 2025. Following a review by the Chair of the Board and the Executive Directors, the fees payable to other Non-Executive Directors have increased by 2.5%. ## WORKFORCE REMUNERATION CONSIDERATIONS The Committee continues to monitor pay and practices for other senior executives and more broadly across the wider workforce when considering the remuneration of Executive Directors. The Group People Director is invited to attend Committee meetings to provide updates on workforce initiatives and to offer an employee perspective. In August 2024, I was invited to meet members of our Culture Matters employee forum, and shared information on the role of the Committee and Executive Director remuneration. The Committee has continued to review the statutory CEO pay ratios and additional ratios looking at both fixed pay and pay excluding long-term incentives – see page 133. The Committee remains satisfied that the year-on-year fluctuations in these ratios mainly reflects differences in the structure of pay at different levels of seniority. Details of our gender diversity and pay gaps are provided on page 47. ## LOOKING AHEAD The Committee will continue to monitor market developments and will consider the appropriateness of any emerging trends for Unite Students. I hope that you find this report a clear account of the Committee's decisions for the year and would be happy to answer any questions you may have at the upcoming AGM. ## Nicky Dulieu Chair of the Remuneration Committee 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 115 --- GOVERNANCE # REMUNERATION AT A GLANCE - 2024 OUTCOMES ## KEY ELEMENTS OF EXECUTIVE DIRECTOR REMUNERATION ![img-96.jpeg](img-96.jpeg) ## WHAT EXECUTIVE DIRECTORS WERE PAID IN 2024 ### JOE LISTER - CEO | Element | £ | % of total | | --- | --- | --- | | Salary | £606,900 | 35.6% | | Pension | £59,460 | 3.5% | | Other benefits | £17,120 | 1.0% | | Annual bonus | £569,272 | 33.4% | | LTIP | £453,103 | 26.6% | | Other | £0 | 0.0% | | Total remuneration | £1,705,856 | | ### MIKE BURT - CFO | Element | £ | % of total | | --- | --- | --- | | Salary | £393,750 | 44.0% | | Pension | £36,186 | 4.0% | | Other benefits | £15,049 | 1.7% | | Annual bonus | £369,338 | 41.3% | | LTIP | £80,943 | 9.0% | | Other | £0 | 0.0% | | Total remuneration | £895,265 | | ## HOW VARIABLE REMUNERATION WAS DETERMINED IN 2024 ### 2024 ANNUAL BONUS | Measure | Outcome | Maximum | | --- | --- | --- | | Adjusted EPS | 15.4% | 25.0% | | TAR | 16.9% | 25.0% | | Net debt to EBITDA | 20.0% | 20.0% | | Higher Education trust | 3.8% | 7.5% | | Customer NPS | 7.5% | 7.5% | | Employee engagement | 3.5% | 7.5% | | GRESB Score | 0.0% | 7.5% | | Total | 67.0% | 100.0% | | | CEO | CFO | | Salary | £606,900 | £393,750 | | Opportunity (% salary) | 140.0% | 140.0% | | Outcome (% maximum) | 67.0% | 67.0% | | Total | £569,272 | £369,338 | ![img-97.jpeg](img-97.jpeg) CEO ANNUAL BONUS OUTCOME OVER THE LAST 10 YEARS (% OF MAXIMUM) ### 2022-24 LTIP | Measure | Outcome | Maximum | | --- | --- | --- | | Adjusted EPS | 0.0% | 28.0% | | Relative TSR | 28.0% | 28.0% | | Relative TAR (est.) | 28.0% | 28.0% | | OEI | 0.0% | 8.0% | | EPC ratings | 8.0% | 8.0% | | Total | 64.0% | 100.0% | | | CEO | CFO | | Shares held | 73,823 | 13,093 | | Outcome (%) | 64.0% | 64.0% | | Share price | 869.9p | 869.9p | | + Dividends | £45,075 | £8,052 | | Total | £453,103 | £80,943 | ![img-98.jpeg](img-98.jpeg) LTIP VESTING OUTCOME OVER THE LAST 10 YEARS (% OF MAXIMUM) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # REMUNERATION AT A GLANCE - 2025 IMPLEMENTATION HOW EXECUTIVE DIRECTOR REMUNERATION WILL BE STRUCTURED IN 2025 ## JOE LISTER - CEO Element | Salary | £622,073 (+2.5%) | | --- | --- | | Pension | Up to 11% of salary | | Other benefits | No change | | Annual bonus | Up to 150% of salary | | LTIP | Grant of 200% salary | ## MIKE BURT - CFO Element | Salary | £425,000 (+7.9%) | | --- | --- | | Pension | Up to 11% of salary | | Other benefits | No change | | Annual bonus | Up to 150% of salary | | LTIP | Grant of 200% salary | KEY STRATEGIC OBJECTIVES REINFORCED THROUGH REMUNERATION A Great Place to Live B Great Place to Work C Great Place to Invest VARIABLE INCENTIVE MEASURES AND WEIGHTINGS FOR 2025 ## 2025 ANNUAL BONUS | Measure | Strategic link | Weighting | | --- | --- | --- | | Adjusted EPS | C | 25.0% | | TAR | C | 25.0% | | Net debt to EBITDA | C | 20.0% | | Customer NPS | A | 7.5% | | Higher Education trust | A | 7.5% | | Employee engagement | B | 7.5% | | GRESB Score | C | 7.5% | Up to 50% of any bonus earned will be deferred in shares for two years, unless a Director has met their in-post shareholding guideline, in which case the full bonus earned will be paid in cash. ## 2025-27 LTIP | Measure | Strategic link | Weighting | | --- | --- | --- | | Adjusted EPS | C | 30.0% | | Relative TSR | C | 30.0% | | Relative TAR | C | 30.0% | | Operational energy intensity | A | 10.0% | Performance will be measured over a three-year period. Any LTIP shares vesting for performance will be subject to a mandatory two-year holding period. DIRECTORS' SHAREHOLDINGS VS. GUIDELINES ![img-99.jpeg](img-99.jpeg) JOE LISTER - CEO ![img-100.jpeg](img-100.jpeg) MIKE BURT - CFO THE UNITE GROUP PLC Annual Report and Accounts 2024 117 --- GOVERNANCE # OVERVIEW OF REMUNERATION ACROSS THE GROUP ## EMPLOYEE ENGAGEMENT ON EXECUTIVE REMUNERATION Our Designated Non-Executive Director for Workforce Engagement and the Group People Director discuss the topic of remuneration with the Culture Matters employee forum, including the structure, role and remit of the Remuneration Committee; how pay policy supports strategy and values; and the alignment of pay practices for Executive Directors and employees. Previous feedback from the forum has led to changes in how the Committee operates, for example, how health, safety and wellbeing are considered when confirming bonus outcomes. Nicky Dulieu attended the employee forum in August 2024 to present on the topic of Executive pay and share her broader experience of serving on remuneration committees. Feedback from the session suggested that members were particularly appreciative of understanding the pay positioning at Unite Group and how it aligns with our values. The Committee was appraised of the session at its November meeting. ## HOW DIFFERENT ELEMENTS OF REMUNERATION CASCADE ACROSS THE GROUP | Eligibility | Element of pay | Details | | --- | --- | --- | | Employees at all levels | Salary | Generally reviewed annually, taking into account Company and individual performance, experience and responsibilities. As an accredited Living Wage employer, all of Unite Group's employees receive at least the voluntary Living Wage rate. | | | Benefits | All employees are eligible for the Company-funded Health Cash Plan and an enhanced sick pay scheme; free 24/7 access to our employee assistance programme which provides counselling and support to employees, including up to eight face-to-face sessions per issue per year. Life assurance cover is provided at 4x annual salary and employees can access a range of deals and discounts. We offer employees 25 days' annual leave a year plus bank holidays and also operate a holiday purchase scheme to allow employees to purchase up to an extra week of annual leave each year. Employees can participate in our charity match, or give-as-you-earn schemes. Financial support is available through season ticket loans, student rental discounts and the Bike2Work Scheme, and employee service is recognised with long-service awards. | | | Pension | All employees can participate in the Unite Group Personal Pension scheme, with an alternative cash pension allowance available in certain circumstances. All employees are eligible to receive a Company contribution of up to 11% of salary, subject to their own contribution level. | | | SAYE | We encourage all employees to become shareholders in Unite Group by participating in the SAYE scheme, under which participants save monthly over three years with the option to acquire shares at a discount at the end of the savings period. Currently c.17% of eligible employees participate in the SAYE. | | | Annual bonus – cash | All employees are eligible to participate in the annual bonus scheme, with outcomes based on Company performance. Maximum opportunities, performance measures and weightings vary by grade; however, metrics are broadly similar across all levels to support delivery of our strategy. | | Executive Directors and other senior leaders | Long-term incentive | Executive Directors and other senior leaders may be invited to participate in the LTIP each year. Performance conditions are consistent for all participants, but award sizes vary. Heads of Department may be invited to participate in the Restricted Share Plan (RSP). This scheme is designed to support retention and to provide a clearer reward outcome for our senior leaders, with awards and the applicable deferral period being consistent for all. | | Executive Directors only | Annual bonus –deferred | Currently only Executive Directors are required to defer a proportion of their bonus into shares, which supports shareholder alignment. | | | Shareholding guidelines | While all employees are strongly encouraged to become shareholders to allow them to share in the success of the Group, currently only Executive Directors are subject to formal shareholding guidelines (both in-post and post-exit). | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # DIRECTORS' REMUNERATION POLICY This report has been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended). It meets the requirements of the UK Listing Authority's Listing Rules and the Disclosure and Transparency Rules. In accordance with the Regulations, the following sections of the Remuneration Report are subject to audit: the single total figure of remuneration for Directors and accompanying notes (page 128); scheme interests awarded during the financial year (page 131); payments to past Directors (page 131); payments for loss of office (page 126); and the statement of Directors' shareholdings and share interests (pages 134 to 136). The remaining sections of the report are not subject to audit. ## REMUNERATION POLICY AND PRINCIPLES This section sets out the new Remuneration Policy which will be put to a binding vote at the 2025 AGM and, if approved, will apply with effect from 1 January 2025. A summary of the principal changes compared to the previously approved Policy is provided in the Annual Statement and highlighted in bold in the sections below. The Group aims to balance the need to attract, retain and motivate Executive Directors and other senior executives of an appropriate calibre with the need to be cost-effective, while at the same time rewarding exceptional performance. The Committee has designed a Remuneration Policy that balances those factors, taking account of prevailing best practice, investor expectations and the level of remuneration and pay awards made generally to employees of the Group. The Remuneration Policy for the Executive Directors and other senior executives is also based on the following principles: - A significant proportion of remuneration should be tied to the achievement of specific and stretching performance conditions that align with the creation of shareholder value and the delivery of the Group's strategic plans, taking care to consider the needs of all stakeholders - There should be a focus on sustained long-term performance, with performance measured over clearly specified timescales, encouraging Executives to take action in line with the Group's Strategic Plan, using good business management principles and taking well-considered risks - Our commitment to providing value-for-money should be reflected by paying senior executives fairly and competitively, but not excessively - Individuals should be rewarded for success, but steps should be taken, within contractual obligations, to prevent rewards for failure – whether financial or operational - Above all, Executive remuneration should support the values and culture of the Group. Pay should be simple and easy to understand, openly communicated to stakeholders and aligned with Group pay. The Committee has designed a Remuneration Policy that balances those factors, taking account of prevailing best practice, investor expectations and the level of remuneration and pay awards made generally to employees of the Group, as well as potential conflicts of interest. ## CONSIDERATION OF SHAREHOLDER VIEWS In designing the new Policy, the Remuneration Committee consulted with Unite Group's top 20 investors and with proxy advisors (Glass Lewis, the Investment Association and ISS) to seek their views on the proposed changes and remuneration at Unite Group more broadly. The Committee thanks investors for the constructive feedback received. This feedback, along with updates to investor body principles published around the time of the review, were used to finalise the proposals. The Committee will continue to monitor trends and developments in corporate governance and market practice to ensure the structure of Executive remuneration remains appropriate. ## OTHER COMPANY CONDITIONS When making decisions on Executive Director remuneration, the Committee considers pay and conditions across Unite Group. We reflect on data such as the Gender Pay Gap reporting and the CEO pay ratio analyses. Prior to the annual salary review, the Group People Director provides the Committee with a summary of the proposed level of increase for overall employee pay. The Remuneration Committee did not formally consult with employees in designing the Remuneration Policy but instead used the dialogue with the Culture Matters forum in August 2024 to shape the final proposals. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # DIRECTORS' REMUNERATION POLICY continued REMUNERATION POLICY TABLE – EXECUTIVE DIRECTORS ## Salary | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To recognise an individual's skills and experience and to provide a competitive base reward. | • Base salaries regularly reviewed with reference to salary levels for similar roles at comparable companies, to individual contribution to performance; and to the experience of each Executive. | • Base salary increases are applied in line with the outcome of the review as part of which the Committee also considers average increases across the Group. • Salary increases will generally be in line with those of other salaried employees. In exceptional circumstances (e.g. material increase in job size or complexity), the Committee has discretion to make appropriate adjustments to salary levels to ensure they remain market competitive. | • None | ## Benefits | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To provide non-cash benefits which are competitive in the market in which the Executive is employed. | • Executives receive benefits which consist primarily of a company car or car allowance, and private health care insurance, or any benefits that the Committee deems appropriate. | • Benefits vary by role and individual circumstances; eligibility and costs are reviewed periodically. • The Committee retains discretion to approve a higher cost in certain circumstances (e.g. relocation) or where external factors change (e.g. insurance premiums). | • None | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Pension | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To provide an opportunity for Executives to build up income for retirement. | • All Executives are either members of The Unite Group Personal Pension scheme or receive a cash pension allowance. • Salary is the only element of remuneration that is pensionable. | • Executive Directors receive a Company pension contribution – or an equivalent cash allowance – aligned to that offered to a majority of employees across the Group in percentage of salary terms (currently 11% of salary). | • None | # Annual bonus | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To incentivise and reward strong performance against financial and non-financial annual targets, so delivering value to shareholders and being consistent with the delivery of the Strategic Plan. | • Performance measures, targets and weightings are set by the Committee at the start of the year. • At the end of the year, the Committee determines the extent to which targets have been achieved. • From 2025 onwards, up to 50% of any bonus earned will be deferred in shares for two years, unless a Director has met their in-post shareholding guideline, in which case the full bonus earned will be paid in cash. • The annual bonus is subject to malus and clawback provisions. | • For Executive Directors, the maximum annual bonus opportunity is 150% of base salary. • Up to 30% of maximum will be paid for Threshold performance under each measure. • Up to 50% of maximum will be paid for On-Target performance under each measure. • A payment equal to the value of dividends which would have accrued on vested deferred bonus shares will be made following the release of awards to participants, either in the form of cash or as additional shares. | • Performance is assessed annually, measured against specific objectives set at the start of each year. • Financial measures will make up at least 70% of the total annual bonus opportunity each year. The remainder will be split between non-financial metrics and personal/team objectives according to business priorities, with weighting on the latter of no more than 20% of the total. • The Committee has discretion to adjust the formulaic bonus outcomes both upwards (within the Policy limits) and downwards (including to zero) to ensure alignment of pay with performance, e.g. if one target is significantly missed, or unforeseen circumstances arise outside management control. The Committee also considers measures outside the bonus framework (e.g. Health & Safety) to ensure there is no reward for failure. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # DIRECTORS' REMUNERATION POLICY continued REMUNERATION POLICY TABLE – EXECUTIVE DIRECTORS CONTINUED ## LTIP | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To drive sustained long-term performance that supports the creation of shareholder value. | • The LTIP comprises a Performance Share Plan (PSP) and an Approved Employee Share Option Scheme (ESOS), with the latter used to deliver a proportion of the LTIP in a tax-efficient manner. • Performance measures, targets and weightings are reviewed and set by the Committee at the start of each cycle. • A proportion of any vested awards may, at the discretion of the Committee, be subject to a holding period following the end of a three-year vesting period. The Committee's current intention is that all awards will be required to be held for an additional two-year period post-vesting. • Awards under the LTIP are subject to malus and clawback provisions. | • The normal aggregate grant limit under the LTIP is 200% of salary for Executive Directors (300% in exceptional circumstances). • LTIP awards may include a grant of approved options, valued on a fair value exchange and subject to HMRC-approved limits on the aggregate value of options outstanding under all awards at any given time (currently £60,000). • Up to 25% of maximum will be paid for Threshold performance under each performance measure. • A payment equal to the value of dividends which would have accrued on vested shares will be made following the release of awards, either in cash or as additional shares. | • Vesting of LTIP awards is subject to continued employment and performance against relevant metrics measured over three years. • The Committee will approve the performance measures, weightings and targets ahead of each grant to ensure that they continue to be linked to the delivery of Unite Group's longer-term strategy. • If no entitlement has been earned at the end of the relevant performance period, awards will lapse. • The Committee has discretion to adjust the formulaic LTIP outcomes to ensure alignment of pay with performance, i.e. the outcome is a true reflection of Company performance. | ## SAYE | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | An all-employee scheme which encourages the ownership of Unite Group shares. | • An HMRC-approved scheme whereby employees may save up to the maximum monthly savings limit over three years. • Options are granted at up to a 20% discount. | • Savings are capped at the prevailing HMRC limit at the time employees are invited to participate. | None | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- REMUNERATION POLICY TABLE – NON-EXECUTIVE DIRECTORS # NED fees | Purpose | Operation | Opportunity | Performance metrics | | --- | --- | --- | --- | | To attract and retain NEDs of the highest calibre with broad commercial and other experience relevant to the Company. | • Fee levels are reviewed annually, with adjustments typically effective 1 January in the year following review. • Fee levels are benchmarked against sector comparators and FTSE-listed companies of similar size and complexity. Time commitment and responsibility are taken into account. • Fees payable to the Board Chair are determined by the Remuneration Committee. • Fees payable to other Non-Executive Directors are determined by the Board Chair and Executive Directors. • Additional fees are payable for additional responsibilities, including, but not limited to, acting as Senior Independent Director or Chair of the Board's Committees. • Expenses incurred by the Board Chair and Non-Executive Directors in the performance of their duties (including taxable travel and accommodation benefits) may be reimbursed or paid for directly by the Company. • The Board Chair and other Non-Executive Directors are not eligible to participate in the annual bonus plan, long-term incentive plans or pension arrangements. | • Fee increases are applied in line with the outcome of the annual fee review. • It is expected that increases to Non-Executive Director fee levels will typically be in line with salaried employees. • In the event that there is a material misalignment with the market or a change in the complexity, responsibility or time commitment required to fulfil a Non-Executive Director role, the Board has discretion to make an appropriate adjustment to the fee level and/or to introduce additional fees. | • None | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # DIRECTORS' REMUNERATION POLICY continued ## NOTES TO THE POLICY TABLE The Committee is satisfied that the Remuneration Policy is in the best interests of shareholders and does not promote excessive risk-taking. In approving this Remuneration Policy, authority is given to the Company to honour any commitments entered into with current or former Directors (such as the vesting or exercise of past share awards). ## PERFORMANCE MEASURE SELECTION AND APPROACH TO TARGET SETTING Measures used under the annual bonus and LTIP are selected annually to reflect the Unite Group's short- and long-term objectives and reflect both financial and non-financial priorities. The Committee considers that EPS (currently used in both the short- and long-term incentive) is an objective and well-accepted measure of the Company's performance. This reinforces the strategic objective of achieving profitable growth, while a focus on Total Accounting Return (also currently used in both the short- and long-term incentive) is consistent with one of our stated objectives and a key indicator of performance in the real estate sector. The use of relative TSR is strongly aligned with shareholders and ensures that Executives are rewarded only if they exceed the returns which an investor could achieve elsewhere in our sector. We currently use sustainability metrics across both variable incentives to support and reinforce the Group's strategy in this area. Targets applying to the annual bonus and LTIP are reviewed annually, based on a number of internal and external reference points. Performance targets are set to be stretching but achievable, with regard to the particular strategic priorities and economic environment in a given year. Under the bonus, target performance typically requires meaningful improvement on the previous year's outturn. For financial measures, targets are typically set with reference to market consensus. ## EMPLOYEE REMUNERATION POLICY Unite Group's approach to annual salary reviews is consistent across the Group, with consideration given to the level of experience, responsibility, individual performance and salary levels in comparable companies. The Company is a fully accredited Living Wage employer. In terms of variable incentives, all employees are eligible to participate in an annual bonus scheme with business area-specific metrics incorporated, where appropriate. Selected senior executives are eligible to participate in the LTIP, with performance conditions aligned to those applying to Executive Directors' awards. Heads of Department may instead be invited to participate in the Restricted Share Plan which vests based on continued employment and supports retention. Specific cash incentives are also in place to motivate, reward and retain staff. All employees are eligible to participate in the Company's SAYE scheme on the same terms. ## SHAREHOLDING GUIDELINES The Committee recognises the importance of Executive Directors aligning their interests with shareholders through building up a significant shareholding in the Company. Shareholding guidelines are in place that require Executive Directors to acquire a holding (excluding shares that remain subject to performance conditions) equivalent to 250% of base salary for the Chief Executive and 200% of base salary for other Executive Directors. Details of the Executive Directors' current shareholdings are provided in the Annual Report on Remuneration. To provide further long-term alignment with shareholders and ensure a focus on successful succession planning, Executive Directors will normally be expected to maintain a holding of Unite Group shares for a period after their employment as a Director of the Group. This post-exit shareholding guideline will be equal to the lower of a Directors' actual shareholding at the time of their departure and the shareholding requirement in effect at the date of their departure, with such shares to be held for a period of at least two years from the date of ceasing to be a Director. The specific application of this shareholding guideline will be at the Committee's discretion. To monitor and enforce the post-exit shareholding requirement, the Committee has established an internal policy document detailing which shares are covered, the valuation methodology, the holding mechanism and any discretions available. In summary, this post-exit requirement will apply to any LTIP awards or deferred bonus share awards granted on or after 9 May 2019, with shares deposited into a Nominee Account until such time that the required post-exit shareholding level has been achieved (calculated annually). Shares held in the Nominee Account will generally be held for not less than two years from the date an individual ceases employment as a Director of the Group. ## MALUS AND CLAWBACK Under the annual bonus and the LTIP, the Remuneration Committee retains discretion to apply malus and clawback in the exceptional circumstances specified in the applicable plan documentation. Such circumstances include: - A material misstatement in the published results of the Group - An error in the methodology for calculating the award level, the performance or vesting outcome which resulted in an overpayment to the participant - Misconduct on the part of the Executive Director concerned - Corporate failure. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- The malus and clawback provisions may be invoked for a period of two years following payment or vesting, a timeframe which reflects the period over which the Company's processes and systems are likely to uncover any of these trigger events. Where the Remuneration Committee determines that malus and/or clawback will apply, the Remuneration Committee has full discretion to determine the basis of application and the means by which the provisions will be implemented. ## PAY FOR PERFORMANCE SCENARIOS The charts below provide an illustration of the potential future reward opportunities for the Executive Directors, and the potential split between the different elements of remuneration under four different performance scenarios: Minimum, On-Target, Maximum, and Maximum including the impact of a 50% share price appreciation on LTIP awards. ![img-101.jpeg](img-101.jpeg) ![img-102.jpeg](img-102.jpeg) Potential reward opportunities are based on the Remuneration Policy, applied to the base salaries effective 1 January 2025. The annual bonus and LTIP are based on the maximum opportunities set out under the Remuneration Policy, being 150% of salary under the annual bonus and a 2025 LTIP grant of 200% of salary. The LTIP awards granted in a year do not normally vest until the third anniversary of the date of grant, and the projected value is based on the face value at award rather than vesting (i.e. the scenarios exclude the impact of any share price movement over the period). The exception to this is the last scenario which, in line with the requirements of reporting regulations, illustrates the maximum outcome assuming 50% share price appreciation for the purpose of LTIP value. The Minimum scenario reflects base salary, pension and benefits (i.e. fixed remuneration) which are the only elements of the Executive's remuneration packages not linked to performance. The On-Target scenario reflects fixed remuneration as above, plus bonus payout of 75% of salary and LTIP threshold vesting at 25% of maximum award (50% of salary). The Maximum scenario is shown on two bases: excluding and including the impact of share price appreciation on the value of LTIP outcomes. In both cases, the scenario includes fixed remuneration and full payout of all incentives (150% of salary under the annual bonus and 200% of salary under the LTIP), with the final scenario also including the impact of a 50% increase in Unite Group's share price on the value of the LTIP (in effect valuing this element of pay at 300% of salary). ## APPROACH TO RECRUITMENT REMUNERATION ### External appointment to the Board When appointing a new Executive Director from outside the Company, the Committee may make use of all the existing components of remuneration: ### Fixed pay - Base salary set with reference to relevant market data, experience and skills, internal relativities and the individual's current basic salary. - Where the starting salary is set below market, any shortfall may be managed with phased increases over two to three years, subject to development in the role. - Company pension contributions, or equivalent cash supplement, aligned to a majority of employees across the Group at the time of appointment (currently 11% of salary). - Eligibility to receive benefits (which include but are not limited to) car or cash alternative, private medical insurance, relocation expenses and participation in all-employee share schemes. ### Annual bonus - The structure described in the Policy table will apply to new appointees with the relevant maximum (currently 150% of salary) being pro-rated to reflect the proportion of employment over the year. - Depending on the timing and responsibilities of the appointment, it may be necessary to set revised performance measures and targets initially. ### LTIP - Awards granted under the LTIP on the same terms as other Executives, as described in the Policy table. - The normal aggregate limit of 200% of salary will apply, or exceptionally up to 300% of salary. In determining appropriate remuneration, the Remuneration Committee will take into consideration all relevant factors (including quantum, nature of remuneration and the jurisdiction from which the candidate was recruited) to ensure that arrangements are in the best interests of both Unite Group and its shareholders. The Committee may make an award on new appointment to buy out incentive arrangements forfeited on leaving a previous employer on a like-for-like basis and awarded in addition to the remuneration structure outlined in the table above. The Committee will consider factors including time to vesting, any performance conditions attached and the likelihood of conditions being met. Buy-out awards will typically be made under the existing annual bonus and LTIP schemes, although in exceptional circumstances the Committee may exercise the discretion available under the Listing Rules to make awards using a different structure. Any buy-out awards would have a fair value no higher than the awards forfeited. THE UNITE GROUP PLC Annual Report and Accounts 2024 125 --- # DIRECTORS' REMUNERATION POLICY ## Internal promotion to the Board If a new Executive Director is promoted internally, the Committee and Board will apply the same policy as for external appointees. Where an individual has contractual commitments made prior to their promotion, the Company will continue to honour these. Pension contributions would be aligned to that offered to a majority of employees at the time of promotion. The Remuneration Policy for other employees is set out on page 124. Incentive opportunities for below Board employees are typically no higher than Executive Directors, but measures may vary. ## Non-Executive Directors In recruiting a new Non-Executive Director, the Remuneration Committee will utilise the Policy as set out in the table on page 123. A base fee in line with the prevailing fee schedule would be payable for Board membership, with additional fees for additional responsibilities such as acting as Senior Independent Director or as Chair of the Board's Committees. ## LEAVERS AND CHANGE OF CONTROL Executive Director service contracts, including arrangements for early termination, are carefully considered by the Committee. In accordance with general market practice, each of the Executive Directors has a rolling service contract requiring 12 months' notice of termination on either side. Such contracts contain no specific provision for compensation for loss of office, other than an obligation to pay for any notice period waived by the Company, where pay is defined as salary, benefits and any other statutory payments only. Where a payment is made in equal monthly instalments, the Committee will expect the Director to mitigate their losses by undertaking to seek and take up, as soon as reasonably practicable, any suitable/similar opportunity to earn alternative income over the period in which the instalments are to be made. The instalment payments will be reduced (including to zero) by the amount of income that the employee earns and/or is entitled to earn. Executive Director service contracts are available to view at the Company's registered office. The Committee will exercise discretion in making payments in the context of outplacement, settling legal claims or potential legal claims by a departing Executive Director, including any other amounts reasonably due to the Executive Director, for example legal fees relating to a settlement agreement. When considering exit payments, the Committee reviews all potential incentive outcomes to ensure they are fair to both shareholders and participants. The sections below summarise how the awards under the annual bonus and LTIP are typically treated in specific circumstances, with the final treatment remaining subject to the Committee's discretion. ## Annual bonus ### Cash element In the event of retirement, ill health, death, disability, redundancy or any other circumstance at the discretion of the Committee, or a change of control, Executive Directors may receive a bonus payment for the year in which they cease employment. This payment will normally be pro-rated for time and will only be paid if financial and individual objectives set at the beginning of the plan year have been met. Otherwise, Executive Directors must be employed at the date of payment to receive an annual bonus. ### Deferred element Deferred shares will normally be retained and released in full following completion of the applicable deferral period. ### LTIP ## Leavers before the end of the performance period In the event of retirement, ill health, death, disability, redundancy or any other circumstance at the discretion of the Remuneration Committee, or in the event of a change of control, the Committee determines whether and to what extent outstanding awards vest based on the extent to which performance conditions have been achieved and the proportion of the vesting period worked. This determination will be made as soon as reasonably practical following the end of the performance period or such earlier date as the Committee may agree (within 12 months in the event of death). In the event of a change of control, awards may be exchanged for new equivalent awards in the acquirer where appropriate. If participants leave for any other reason before the end of the performance period, their award will normally lapse. ## Leavers after the end of the performance period Any awards in a holding period will normally vest following completion of the holding period. ## EXTERNAL APPOINTMENTS With the approval of the Board in each case, and subject to the overriding requirements of the Group, Executive Directors may accept external appointments as Non-Executive Directors of other companies and retain any fees. Joe Lister served as a Non-Executive Director on the Board of Helical Plc until 17 July 2024, and received a fee of c.£35k in respect of his service for 2024. Mike Burt does not currently hold any external appointments. --- # ANNUAL REPORT ON REMUNERATION The following section provides details of how Unite Group's Remuneration Policy was implemented during the financial year ended 31 December 2024 and how the new Policy will be implemented in 2025. ## COMMITTEE MEMBERSHIP IN 2024 The Committee's terms of reference are set out on the Company's website. As of 31 December 2024, the Remuneration Committee comprised four independent Non-Executive Directors. - Nicky Dulieu (Chair) - Ross Paterson - Dame Shirley Pearce - Professor Sir Steve Smith. Certain Executives, including Joe Lister and Amy Round (Group People Director), are invited to attend meetings of the Committee, and the Company Secretary, Christopher Szpojnarowicz, acts as secretary to the Committee. Richard Huntingford and Thomas Jackson are also invited to attend meetings. No individuals are involved in decisions relating to their own remuneration. The Remuneration Committee convened four times during the year and details of members' attendance at meetings are provided on page 93. Key activities of the Remuneration Committee in 2024 included: - Reviewed the Executive Directors' performance against 2021 LTIP targets and approved final vesting - Approved the Remuneration Report for 2023 - Determined the Executive Directors' bonus and LTIP performance targets for 2024 in line with the strategic plan and approved grant of awards under the LTIP in April 2024 - Continued to monitor remuneration market trends and corporate governance developments - Reviewed the CEO pay ratio and gender pay data and disclosures - Reviewed the Remuneration Policy and conducted shareholder consultations on the proposed changes - Considered feedback from the Culture Matters forum - Reviewed the fee payable to the Board Chair - Commenced preparation of the 2024 DRR. ## ADVISORS Ellason LLP was appointed as the independent remuneration advisor to the Committee effective 1 January 2021 and retained during the year. The Committee undertakes due diligence periodically to ensure that Ellason is independent and that the advice provided is impartial and objective. During 2024, Ellason provided independent advice including support on the review of the Remuneration Policy and consultation, updates on the external remuneration environment, performance testing for long-term incentive plans and Directors' Remuneration Report drafting support. Ellason reports directly to the Chair of the Remuneration Committee and does not advise the Company on any other issues. Their total fees for the provision of remuneration services to the Committee in 2024 were £37,538 (2023: £42,823) on the basis of time and materials. Ellason is member and signatory of the Code of Conduct for Remuneration Consultants, details of which can be found at www.remunerationconsultantsgroup.com. None of the individual Directors have a personal connection with Ellason. ## SUMMARY OF SHAREHOLDER VOTING AT AGMS The 2023 Annual Report on Remuneration was approved at the 2024 AGM with 95.02% votes for and 4.98% against with 2,350,322 votes withheld. The Directors' Remuneration Policy was approved at the 2022 AGM with 97.83% votes for and 2.17% against with 1,761,682 votes withheld. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # ANNUAL REPORT ON REMUNERATION continued # SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED) The tables below sets out a single figure for the total remuneration received for 2023 and 2024 by each Executive Director and Non-Executive Director who served in the year ended 31 December 2024: | Executive Directors | | Salary | Taxable benefits | Pension | Annual bonus | LTIP | Other | Single figure | Total fixed | Total variable | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | £ | | | Note 3 | Note 4 | Note 5 | Note 6 | Note 7 | | | | | J Lister | 2024 | 606,900 | 17,120 | 59,460 | 569,272 | 453,103 | 0 | 1,705,856 | 683,481 | 1,022,375 | | Note 1 | 2023 | 431,794 | 17,068 | 38,734 | 332,482 | 548,341 | 2,318 | 1,370,737 | 487,596 | 883,141 | | M Burt | 2024 | 393,750 | 15,049 | 36,186 | 369,338 | 80,943 | 0 | 895,265 | 444,984 | 450,280 | | Note 2 | 2023 | | | | | | | | | | 1. Joe Lister was promoted from CFO to CEO with effect from 1 January 2024. 2. Mike Burt was appointed as CFO and as a Board Director with effect from 1 January 2024. 3. Taxable benefits for 2024 consist primarily of company car or car allowance and private health care insurance. The figures above include car benefits of £15,000 for Joe Lister and Mike Burt. 4. Pension figures include contributions to the Unite Group Personal Pension Scheme and cash allowances, where applicable. 5. Annual bonus figures reflect the full amount earned in respect of the relevant financial year, including any amounts deferred. 6. 2023 figures: Vesting of 2021 awards was confirmed as 76.0% of maximum following the publication of comparator full-year results. The LTIP figures shown have been updated to reflect this outcome and the market price on the date of vesting (12 April 2024) of 939.0p. 2024 figures: See following sections for further details. For both 2023 and 2024, LTIP figures include the value of dividends for vested awards which will be paid as additional shares (estimated, where relevant). Awards in the form of HMRC-approved options are valued based on the embedded gain at vesting (i.e. subtracting the applicable exercise price) and attract no dividends. 7. Other includes the embedded value of SAYE/Sharesave options at grant. | Non-Executive Directors | | Base fee | Committee Chair/SID fees | Taxable benefits | Single figure | | --- | --- | --- | --- | --- | --- | | £ | Note 1 | | | Note 2 | | | R Huntingford | 2024 | 256,606 | - | - | 256,606 | | | 2023 | 238,703 | - | 95 | 238,798 | | R Paterson | 2024 | 62,000 | 10,900 | - | 72,900 | | | 2023 | 52,543 | 10,900 | - | 63,353 | | I Beato | 2024 | 62,000 | - | - | 62,000 | | | 2023 | 52,453 | - | 40 | 52,493 | | S Pearce | 2024 | 62,000 | 10,900 | - | 72,900 | | | 2023 | 52,453 | 10,900 | - | 63,353 | | T Jackson | 2024 | - | - | - | - | | Note 1.1 | 2023 | - | - | - | - | | S Smith | 2024 | 62,000 | 10,900 | - | 72,900 | | | 2023 | 52,453 | 10,900 | 19 | 63,372 | | N Dulieu | 2024 | 62,000 | 20,900 | - | 82,900 | | | 2023 | 48,920 | 14,229 | - | 63,149 | | A Jain | 2024 | 62,000 | - | - | 62,000 | | Note 1.2 | 2023 | 21,855 | - | - | 21,855 | 1. Relevant changes in Non-Executive Directors and responsibilities as follows: 1.1. Reflecting the Relationship Agreement with CPPIB Holdco, Thomas Jackson does not receive any fees in respect of his NED position 1.2. Angela Jain joined the Board as a Non-Executive Director on 1 August 2023. 2. Taxable benefits relate primarily to certain travel expenses. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # INCENTIVE OUTCOMES FOR THE YEAR ENDED 31 DECEMBER 2024 (AUDITED) ## Annual bonus in respect of 2024 performance The maximum annual bonus opportunity for each Executive Director in 2024 was 140% of base salary, with Threshold and On-Target performance paying 30% and 50% of maximum respectively under each performance measure. The 2024 annual bonus was based on an additive combination of financial (weighted 70%) and non-financial (30%) metrics. Further details, including the targets set and performance against each of the metrics, are provided in the tables below: | | Measure | Weight | Threshold 30% max. | On-Target 50% max. | Maximum 100% max. | Actual | Outcome % max. | | --- | --- | --- | --- | --- | --- | --- | --- | | Financial 70% | Adjusted EPS | 25.0% | 44.75p | 46.25p | 47.75p | 46.6p | 61.7% | | | TAR | 25.0% | 6.9% | 8.9% | 10.9% | 9.6% | 67.5% | | | Net debt to EBITDA | 20.0% | 7.5 | 7.1 | 6.6 | 5.5 | 100.0% | | Non-financial 30% | Customer NPS | 7.5% | 11 | 13 | 17 | 23 | 100.0% | | | Higher Education trust | 7.5% | 79 | 80 | 81 | 80 | 50.0% | | | GRESB score | 7.5% | 86 | 87 | 88 | 85 | 0.0% | | | Employee engagement | 7.5% | 70 | 75 | 77 | 74 | 46.0% | | | Maximum bonus % salary | Bonus outcome % max. | | Bonus outcome % salary | | Salary £ | Bonus outcome £ | | J Lister | 140.0% | x | 67.1% | = | 93.8% | x £606,900 | = £569,272 | | M Burt | 140.0% | x | 67.1% | = | 93.8% | x £393,750 | = £369,338 | As in previous years, prior to finalising the annual bonus outcome, the Committee received a detailed report from Professor Sir Steve Smith, Chair of the Health and Safety Committee, which reviewed the Group's operational incidents and fire safety performance during 2024. Following a discussion of the key themes, the Committee concluded that the executive team had continued to promote a culture of openness and transparency, and had worked proactively to address the challenges faced to ensure that students and staff live and work in safe environment, and that health and safety remains Unite Group's number one priority. Having taken the above into account, as well as the Group's broader underlying performance, the Committee is satisfied that the overall formulaic bonus outcome of 93.8% of salary (cf. a maximum of 140% of salary) in respect of 2024 is appropriate. In line with the current Remuneration Policy, 50% of the 2024 annual bonuses earned by Executive Directors will be satisfied in Unite shares, deferred for two years. ## Confirmation of 2021 LTIP vesting Last year, the Committee provided an estimate for the vesting of the 2021 LTIP awards based on relative TAR after two years of the performance period. Following the publication of TAR results by comparators with March 2024 year-ends, the Committee was able to assess this element of the LTIP, with Unite Group's TAR of +22.2% exceeding upper quartile (+14.8%) over the full three-year performance period. The resulting vesting outcome was 100.0% of maximum for the relative TAR element which, when combined with the outcomes for the relative TSR (100.0% of maximum) and EPS (28.0% of maximum) elements, resulted in an overall vesting outcome for the 2021 LTIP of 76.0% of maximum – in line with the estimate set out in last year's report. The Committee was satisfied that this vesting result was supported by broader underlying Group performance, and accordingly applied no discretion in respect of the outcome. The 2023 values included in the single figure of remuneration table for Joe Lister have been updated to reflect the confirmed number of shares vesting, as well as the actual share price on 12 April 2024 of 939.0p. | | Plan | Interests held | Confirmed vesting | Interests vesting | Date vesting | | --- | --- | --- | --- | --- | --- | | J Lister | PSP | 70,850 | 76.0% | 53,846 | 12 April 2024 | | | ESOS | 479 | | 364 | | | | Total | 71,329 | | 54,210 | | THE UNITE GROUP PLC Annual Report and Accounts 2024 129 --- GOVERNANCE # ANNUAL REPORT ON REMUNERATION continued # 2022 LTIP vesting (vested on performance to 31 December 2024) Awards in 2022 were made under the LTIP, consisting of the Unite Group Performance Share Plan (PSP) and the Unite Group Approved Employee Share Option Scheme (ESOS). Further details, including vesting schedules and performance against each of the metrics, are provided in the table below. Vesting of the relative TAR element will be finalised following the publication of comparator results over the coming months, with Unite Group currently estimated to rank above upper quartile, equating to full vesting under this element, and 64% vesting overall. No discretion has been exercised in respect of the 2022 LTIP to-date; the Committee will confirm this position once final vesting of the relative TAR element has been approved later in 2025. | Measure | Note | Weight | Threshold 25% max. | Stretch 100% max. | Outcome | Vesting % max. | | --- | --- | --- | --- | --- | --- | --- | | 2024 Adjusted EPS | | 28.0% | 48.5p | 53.6p | 46.6p | 0.0% | | Relative TSR | Note 1 | 28.0% | Median | Upper quartile | Upper quartile | 100.0% | | Relative TAR | Note 1,2 | 28.0% | Median | Upper quartile | Upper quartile | 100.0% | | OEI | Note 3 | 8.0% | 6.3% | 12.6% | 1.6% | 0.0% | | EPC ratings | Note 4 | 8.0% | 67.0% | 79.0% | 100% | 100.0% | | Overall estimated vesting | | | | | | 64.0% | For all measures: no vesting below Threshold; straight-line vesting between Threshold and Stretch targets. 1. TSR and TAR are measured relative to the constituents of the FTSE 350 Real Estate Supersector Index. 2. Vesting of the relative TAR measure reflects an estimate after two years of the three-year performance period. Actual vesting will be finalised following the publication of comparator results over the coming months and detailed in next year's report. 3. OEI targets are based on a cumulative reduction: 2024 vs. 2019 baseline (kWh/m²). 4. EPC targets are based on the % of floorspace A-C rated in 2024. | | Plan | Interests held | Estimated vesting % max. | Estimated interests vesting | Assumed market price | Estimated value Note 5,6 | | --- | --- | --- | --- | --- | --- | --- | | J Lister | PSP | 73,288 | 64.0% | 46,904 | 869.9p | £453,103 | | | ESOS | 535 | | 342 | | £0 | | | Total | 73,823 | | 47,246 | | £453,103 | | M Burt | PSP | 13,093 | 64.0% | 8,379 | 869.9p | £80,943 | | | ESOS | 0 | | 0 | | £0 | | | Total | 13,093 | | 8,379 | | £80,943 | 5. Estimated value of ESOS is based on embedded gain (i.e. after subtracting 1,121.0p exercise price). 6. Estimated value of PSP includes the accumulated dividends on vested shares. As the market price on the date of vesting is unknown at the time of reporting, the values shown above are estimated using the average market value over the last quarter of 2024 of 869.9p. These values will be trued-up in the 2025 Annual Report on Remuneration to reflect actual relative TAR vesting and the actual share price at the date of vesting for these awards. Joe Lister's awards are subject to a mandatory two-year holding period following vesting; Mike Burt's awards were granted in respect of his previous role and accordingly an additional holding period will not apply. None of the estimated values shown is attributable to share price appreciation, with the market price used in these calculations (869.9p) being 22.4% lower than the share price at grant (1,121.0p). Executives also became entitled to additional shares representing the dividends payable on vested PSP shares over the three-year performance period. The estimated additional value of these shares is included in the relevant rows above and in the single total figures of remuneration table on page 128 and equate to £45,075 and £8,052 for Joe Lister and Mike Burt respectively. Actual dividends payable will be determined on finalising vesting of the TAR element of awards. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # RELATIVE IMPORTANCE OF SPEND ON PAY The table across shows shareholder distributions (i.e. dividends and share buybacks) and total employee pay expenditure for the financial years ended 31 December 2023 and 31 December 2024, along with the percentage change in both. Total employee pay expenditure excludes social security costs; distributions to shareholders reflects actual payments made during the relevant financial year. | | 2024 | 2023 | % change | | --- | --- | --- | --- | | Total employee pay expenditure | £85.2m | £75.7m | 12.5% | | Distributions to shareholders | £137.8m | £117.3m | 17.5% | # SCHEME INTERESTS AWARDED IN 2024 (AUDITED) ## LTIP In April 2024, Executive Directors were granted awards under the LTIP with a face value of 200% of their respective salaries. Any awards vesting for performance will be subject to an additional two-year holding period. | | Date of grant | Interests granted | | | Market price at date of award | Face value | | --- | --- | --- | --- | --- | --- | --- | | | | PSP | ESOS | Total | | | | J Lister | 9 April 2024 | 127,737 | 631 | 128,368 | 949.5p | £1,218,854 | | M Burt | 9 April 2024 | 82,840 | 631 | 83,471 | 949.5p | £792,557 | Vesting of these awards is dependent on the achievement of three-year performance targets as set out below. As noted in last year's report, target setting for the adjusted EPS measure was delayed to give the Committee time to consider a range of relevant internal and external reference points, with these targets subsequently set out in a market announcement on 10 April 2024. The Committee retains overarching discretion under the Remuneration Policy to approve the final vesting of these awards, and any payout will be scrutinised by the Committee to ensure it reflects the underlying performance of the Company and the experience of stakeholders over the period. | Measure | Note | Weight | Threshold 25% max. | Stretch 100% max. | | --- | --- | --- | --- | --- | | 2026 Adjusted EPS | | 28.0% | 50.0p | 53.0p | | Relative TSR | Note 1 | 28.0% | Median | Upper quartile | | Relative TAR | Note 1 | 28.0% | Median | Upper quartile | | OEI | Note 2 | 8.0% | 7.9% | 15.8% | | EPC ratings | Note 3 | 8.0% | 98.6% | 100.0% | For all measures: no vesting below Threshold; straight-line vesting between Threshold and Stretch targets. 1. TSR and TAR are measured relative to the constituents of the FTSE 350 Real Estate Supersector Index. 2. OEI targets are based on a cumulative reduction: 2026 vs. 2023 baseline (kWh/m²). 3. EPC targets are based on the % of floorspace A-C rated in 2026. ## Deferred annual bonus During the year, 50% of the annual bonus earned by Joe Lister in respect of the 2023 financial year was satisfied in Unite Group shares, deferred for two years. Mike Burt's 2023 annual bonus related to his previous role and accordingly no deferral applied. | | Date of grant | Interests granted | Market price at date of award | Date of vesting | | --- | --- | --- | --- | --- | | J Lister | 28 February 2024 | 17,499 | 950.0p | 28 February 2026 | ## SAYE During 2024, no Executive Directors entered into a new savings contract under the SAYE plan. Details of all outstanding awards under this plan are included in the table on page 137. ## PAYMENTS TO PAST DIRECTORS (AUDITED) As set out in last year's report, Richard Smith stepped down from the Board on 31 December 2023 and remained as an advisor to the business until the 3 October 2024. All payments made to Richard in relation to the 2023 financial year were disclosed fully in last year's Remuneration Report. Richard received base salary £440,169, pension £40,702 and other contractual benefits £12,447 through to 3 October 2024. Richard was treated as a Good Leaver in respect of outstanding PSP awards. Vesting of previously granted awards during the 2024 financial year were as follows: 66,173 shares (76.0% vesting) under the 2021 PSP which remain THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # ANNUAL REPORT ON REMUNERATION continued subject to a mandatory two-year holding period; and 1,235 shares under the DBP (in relation to the 2022 annual bonus) which have been added to his nominee account to satisfy his post-exit shareholding requirement. Other than the above, there have been no payments in excess of the de minimis threshold to former Directors during the year ended 31 December 2024 in respect of their former roles as Directors. The Company has set a de minimis threshold of £5,000 under which it would not report such payments. ## EXIT PAYMENTS MADE IN THE YEAR (AUDITED) There have been no exit payments during the year ended 31 December 2024. ## PERCENTAGE CHANGE IN REMUNERATION OF DIRECTORS AND EMPLOYEES These tables are produced in accordance with the Companies (Directors' Remuneration Policy and Directors' Remuneration Report) Regulations 2019 and shows the change in remuneration of Unite Group Directors and employees over time. Executive Director remuneration includes base salary, taxable benefits and annual bonus (where eligible). Non-Executive Director remuneration includes base fee and any additional fees paid, and taxable benefits. Data is shown on a full-time equivalent basis and growth rates are based on a consistent set of employees, i.e. the same individuals appear in the 2024 and 2023 populations for the 2024 analysis and so on. | Base salary/total fee Note 1 | | | | | | | --- | --- | --- | --- | --- | --- | | | 2024 | 2023 | 2022 | 2021 | 2020 | | J Lister | 40.6% | 5.0% | 7.0% | 11.1% | (6.9)% | | M Burt | n/a | n/a | n/a | n/a | n/a | | R Huntingford | 7.5% | 3.0% | 28.0% | 266.3% | n/a | | R Paterson | 14.9% | 3.0% | 3.0% | 11.1% | (7.3)% | | I Beato | 18.2% | 3.0% | 3.0% | 11.1% | (7.3)% | | S Pearce | 15.1% | 3.0% | 6.6% | 29.7% | (7.3)% | | T Jackson | n/a | n/a | n/a | n/a | n/a | | S Smith | 15.1% | 3.0% | 3.0% | 17.0% | n/a | | N Dulieu | 24.3% | 24.0% | n/a | n/a | n/a | | A Jain | 18.0% | n/a | n/a | n/a | n/a | | All employees | 11.4% | 11.6% | 3.6% | 2.9% | 4.4% | | Taxable benefits Note 2 | | | | | | --- | --- | --- | --- | --- | | 2024 | 2023 | 2022 | 2021 | 2020 | | 0.3% | 1.3% | (2.4)% | (1.3)% | 3.4% | | n/a | n/a | n/a | n/a | n/a | | (100)% | n/a | (100)% | n/m | n/a | | n/m | (100)% | 1,190% | (71.1)% | 100% | | (100)% | (11.1)% | 1,400% | n/m | (100)% | | n/m | (100)% | 1,400% | (71.1)% | 100.% | | n/a | n/m | (100)% | n/m | n/a | | (100)% | (62.6)% | 2.0% | n/m | n/a | | n/m | n/m | n/a | n/a | n/a | | n/m | n/a | n/a | n/a | n/a | | 17.3% | 6.1% | 3.2% | 2.3% | 2.3% | | Annual bonus Note 3 | | | | | | | --- | --- | --- | --- | --- | --- | | | 2024 | 2023 | 2022 | 2021 | 2020 | | J Lister | 71.2% | 60.4% | (47.5)% | n/m | (100)% | | M Burt | n/a | n/a | n/a | n/a | n/a | | All employees | 73.3% | 87.7% | (52.8)% | 285.0% | (67.8)% | n/a – not applicable n/m – not meaningful 1. Changes in Directors and responsibilities during the 2023 and 2024 financial years which are relevant to the calculations above are as follows: 1.1. Joe Lister was promoted from CFO to CEO with effect from 1 January 2024 1.2. Mike Burt joined the Board with effect from 1 January 2024 1.3. Nicky Dulieu joined the Board with effect from 1 September 2022 and took on the roles of Senor Independent Director and Chair of the Remuneration Committee with effect from 1 March 2023 1.4. Angela Jain joined the Board with effect from 1 August 2023. 2. For Executive Directors, taxable benefits consist primarily of company car or car allowance and private health care insurance. For Non-Executive Directors, taxable benefits relate primarily to certain travel expenses and accommodation which, given the relatively small numbers involved, can produce sizeable % changes from year to year. 3. The figures shown are reflective of any bonus earned during the respective financial year. Non-Executive Directors are not eligible to participate in the annual bonus scheme and therefore no data is shown for them in the annual bonus table. 132 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # RELATIONSHIP BETWEEN THE REMUNERATION OF THE CEO AND ALL EMPLOYEES There is strong alignment between the Company's approach to remuneration for Executive Directors and other employees (see page 118 for details). Given the significant undertaking required to calculate the single figure of remuneration for all UK employees, the Committee opted to use data already available from the gender pay reporting as the basis for identifying employees at P25, P50 and P75 (Option B). We believe this provides a reasonable estimate for employees' pay at these levels within the organisation. Accordingly, consistent with prior years, we used the most recent gender pay gap data from 5 April 2024 to rank the hourly rates of all UK employees for the whole of 2024 and identify those individuals positioned at P25, P50 and P75, as well as the immediate employees either side of P25, P50 and P75. Total FTE remuneration for each of these individuals was then calculated to 31 December 2024 on the same basis as used in the single figure table for our CEO. In a slight change for 2024, overtime pay has been included in the calculations (where applicable) recognising that this is increasingly a representative part of employee pay at these levels. In reviewing the employee pay data, the Committee is comfortable that the P25, P50 and P75 individuals identified appropriately reflect the employee pay profile at those quartiles, and that the overall picture presented by the ratios is consistent with our pay, reward and progression policies. The Committee notes that the spread of the statutory CEO pay ratios is broadly consistent year-on-year, with the ratio of CEO total remuneration to the P50 employee having risen slightly from 53:1 to 57:1 but the ratios of the P25 and P75 employees having fallen. The reported CEO single figure is broadly flat this year and so the Committee considers that this year-on-year change is principally driven by a change in the shape of the employee population, and in particular an increase in the size of our frontline teams. Reflecting that a significant proportion of the CEO's remuneration is linked to Group performance and share price movements over the longer term, and that, as a result, changes in the headline ratios may be volatile, the Committee also reviews ratios for salary and salary plus annual bonus. Participation in the Group's long-term incentives is currently limited to c.60 senior leaders, with none of the individuals identified as P25, P50 and P75 in this group. On the other hand, the significant majority of our employees are eligible to participate in annual bonus arrangements – and so the Committee considers this ratio, as well as the ratio comparing just salaries, to provide helpful additional context. The Committee notes that these ratios have seen similar trends this year with, for example, that the ratio of the CEO's salary to that of the P50 employee increasing from 19:1 to 23:1 but with the comparative ratios for the P25 and P75 employees being broadly flat. As above, this reflects a change in the shape of the employee population during the year, alongside the Real Living Wage increases awarded to relevant individuals. Having reviewed the data points and associated context, the Committee is satisfied that the fluctuation in the headline ratios this year reflects appropriate differences in the structure of remuneration at different levels of seniority. | CEO pay ratio | 2024 | 2023¹ | 2022 | 2021 | 2020 | 2019 | | --- | --- | --- | --- | --- | --- | --- | | Methodology used | B | B | B | B | B | B | | Average number of employees | 1,938 | 1,859 | 1,889 | 1,900 | 1,756 | 1,450 | | Ratio of CEO single figure total remuneration: | | | | | | | | -To employee at the 25th percentile | 64:1 | 70:1 | 48:1 | 58:1 | 44:1 | 113:1 | | -To employee at the 50th percentile | 57:1 | 53:1 | 42:1 | 56:1 | 38:1 | 96:1 | | -To employee at the 75th percentile | 43:1 | 47:1 | 29:1 | 43:1 | 29:1 | 70:1 | | Additional details | | | | | | | | CEO total single figure (£000) | 1,706 | 1,731 | 1,083 | 1,428 | 934 | 2,336 | | CEO base salary (£000) | 607 | 558 | 523 | 472 | 425 | 457 | | Employees total pay and benefits (£000) | | | | | | | | -at the 25th percentile | 26.6 | 24.7 | 22.4 | 24.4 | 21.2 | 20.6 | | -at the 50th percentile | 29.8 | 32.5 | 25.9 | 25.3 | 24.6 | 24.4 | | -at the 75th percentile | 40.0 | 36.6 | 37.7 | 32.8 | 32.0 | 33.5 | | Employees base salary (£000) | | | | | | | | - at the 25th percentile | 24.0 | 21.9 | 20.0 | 21.1 | 19.6 | 18.1 | | - at the 50th percentile | 26.7 | 28.8 | 23.2 | 21.8 | 22.6 | 21.7 | | - at the 75th percentile | 34.2 | 32.3 | 30.4 | 28.5 | 29.4 | 29.6 | 1. Note: 2023 CEO single figure of remuneration has been trued-up from last year's report to reflect the final vesting outcome and actual market price on the date of vesting for 2021 LTIP awards, with ratios updated accordingly. THE UNITE GROUP PLC Annual Report and Accounts 2024 133 --- GOVERNANCE # ANNUAL REPORT ON REMUNERATION continued ## REVIEW OF PAST PERFORMANCE This graph charts the TSR and FTSE 350 Real Estate Supersector Index over ten years to 31 December 2024. There is no comparator index or group of companies that truly reflect Group activities. The FTSE 350 Real Estate Index was chosen as it reflects trends within the UK property market generally and tends to be the index against which analysts judge the performance of the Company. The table below details the Chief Executive's single figure remuneration over the same period. ![img-103.jpeg](img-103.jpeg) | | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | M Allan | | | | | | | | | | | | M Allan | R Smith | R Smith | R Smith | R Smith | R Smith | R Smith | R Smith | R Smith | J Lister | | | | | | | | Note 1 | | | Note 2 | Note 3 | | CEO single figure £000 | | £223 | | | | | | | | | | | £2,382 | £1,239 | £1,456 | £2,131 | £2,336 | £934 | £1,428 | £1,083 | £1,731 | £1,706 | | Annual bonus (% of max.) | | n/a | | | | | | | | | | | 88.2% | 43.4% | 63.6% | 74.3% | 80.9% | n/a | 73.3% | 36.0% | 55.0% | 67.0% | | LTIP outcome (% of max.) | | n/a | | | | | | | | | | | 100.0% | 100.0% | 96.1% | 81.9% | 97.1% | 33.3% | 36.8% | 18.7% | 76.0% | 64.0% | 1. 2020 annual bonus scheme was cancelled for Executive Directors in April 2020. 2. 2023 single figure has been trued-up from last year's report to reflect the market price on the date of vesting for 2021 LTIP awards. 3. 2024 CEO single figure and LTIP outcome are based on an estimate of the vesting of the TAR element, see page 130 for further details. ## DIRECTORS' INTERESTS IN SHARES (AUDITED) A table setting out the beneficial interests of the current Directors and their families in the share capital of the Company at the beginning and end of the year is below. None of the Directors has a beneficial interest in the shares of any other Group company. Between 31 December 2024 and the sign-off date of this report, there have been no changes in the Directors' interests in shares. The table also shows the shareholding of each Executive Director against their respective shareholding requirement as at 31 December 2024. | | Owned outright | | Subject to deferral/ holding period | | | Unvested and/or subject to perf. | Holding req. | Current holding | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 Dec 2023 | 31 Dec 2024 | Shares, NCOs | Approved options | Shares, NCO | Approved options | % sal | % sal/fee | | | | | Note 1 | | | | | Note 2 | | J Lister | 600,730 | 620,358 | 100,096 | 503 | 290,681 | 1,801 | 250% | 895% | | M Burt | n/a | 33,971 | 0 | 0 | 121,675 | 1,690 | 200% | 70% | | R Huntingford | 12,334 | 15,483 | | | | | | | | R Paterson | 9,416 | 10,527 | | | | | | | | I Beato | 2,276 | 3,387 | | | | | | | | S Pearce | 2,983 | 4,107 | | | | | | | | T Jackson | 0 | 0 | | | | | | | | S Smith | 1,104 | 2,215 | | | | | | | | N Dulieu | 3,314 | 3,869 | | | | | | | | A Jain | 0 | 1,111 | | | | | | | NCO - nil-cost option 1. Includes shares subject to a holding period under the LTIP and deferred bonus shares, where applicable. Excludes SAYE options. 2. Based on share price as at 31 December 2024 of 806.5p. Shares subject to deferral/holding periods are taken on a net of tax basis for the purposes of the current shareholding calculation. 134 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- IMPLEMENTATION OF REMUNERATION POLICY FOR 2025 ## Base salary The CEO's salary has been increased by 2.5% with effect from 1 January 2025. The CFO's salary has been increased by 7.9% to reflect the strong start he has made in his first year in the role, and consistent with the Committee's previously-communicated intention of bringing him closer to market levels over the short to medium term. The average salary increase across the Group will be 3.9%. Unite Group maintains its commitment to being an accredited Real Living Wage employer and, for relevant individuals, has implemented the rates set by the Living Wage Foundation (5.3% in London and 5.0% across the rest of the UK). | Salaries | From 1 Jan 2024 | From 1 Jan 2025 | % change | | --- | --- | --- | --- | | J Lister | £606,900 | £622,073 | +2.5% | | M Burt | £393,750 | £425,000 | +7.9% | ## Pension Executive Directors will continue to receive a pension scheme contribution, a cash allowance of equivalent cost to the Company or a combination of both. Total employer pension contributions are in line with the offering available to the wider employee population at up to 11% of salary. ## Annual bonus For 2025, the maximum bonus opportunity for Joe Lister and Mike Burt will be 150% of salary, with Threshold and On-Target performance paying 30% and 50% of maximum respectively under each performance measure. For both the financial and non-financial elements of the annual bonus, targets have been set to be challenging relative to the business plan. Reflecting concerns around commercial sensitivity at this time, it is the Committee's intention to disclose all targets retrospectively in next year's Directors' Remuneration Report. This decision takes into account Unite Group's status as one of only two listed PBSA providers in the UK and the possible insight that prospective disclosure might provide to our competitors as to our short-term financial and operational strategy. | 2025 bonus measures and weightings | Weight | | --- | --- | | Adjusted EPS | 30.0% | | TAR | 25.0% | | Net debt to EBITDA | 15.0% | | Customer NPS | 7.5% | | Higher Education trust | 7.5% | | Employee engagement | 7.5% | | GRESB score | 7.5% | In line with the new Remuneration Policy, up to 50% of any bonus earned will be deferred in shares for two years, unless a Director has met their in-post shareholding guideline, in which case the full bonus earned will be paid in cash. ## LTIP During 2025, Joe Lister and Mike Burt will each receive an award of up to 200% of salary delivered through a combination of the PSP and ESOS, with vesting dependent on the achievement of three-year performance targets, as set out below. Any awards vesting for performance will be subject to an additional two-year holding period, during which time recovery provisions will also apply. Further details of the grant date and number of interests awarded will be disclosed in next year's report. | 2025 LTIP measure | Note | Weight | | --- | --- | --- | | 2027 Adjusted EPS | | 30.0% | | Relative TSR | Note 1 | 30.0% | | Relative TAR | Note 1 | 30.0% | | OEI | Note 2 | 10.0% | | 2025 LTIP targets | Threshold 25% max. | Stretch 100% max. | | --- | --- | --- | | 2027 Adjusted EPS | 51.7p | 54.7p | | Relative TSR | Median | UQ | | Relative TAR | Median | UQ | | OEI | 4.5% | 9.0% | For all measures: no vesting below Threshold; straight-line vesting between Threshold and Stretch targets. 1. UQ – upper quartile; TSR and TAR are measured relative to the constituents of the FTSE 350 Real Estate Supersector Index, excluding Savills and Rightmove which do not report on an EPRA basis and are not considered relevant comparators for the basis of relative performance measurement. 2. The OEI target range for 2025-27 has been set with reference to historical performance and both the existing CRREM residential multi-family pathway and where we expect a new student housing pathway to be set (due for publication in 2025). ## CHAIRMAN AND NON-EXECUTIVE DIRECTOR FEES Adjustments have been implemented for the fees payable to the Chair of the Board and other Non-Executive Directors as follows: | Fee | From 1 Jan 2024 | From 1 Jan 2025 | % change | | --- | --- | --- | --- | | Base fees | | | | | Board Chair fee | £256,606 | £263,021 | +2.5% | | NED base fee | £62,000 | £63,550 | +2.5% | | Additional fees | | | | | SID | £10,000 | £10,250 | +2.5% | | Committee Chair | £10,900 | £11,173 | +2.5% | SID – Senior Independent Director. Committee Chair fees are currently paid to the Chairs of the Audit & Risk, Remuneration, Health & Safety, and Sustainability Committees. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # ANNUAL REPORT ON REMUNERATION continued ## DIRECTORS' INTERESTS IN SHARES AND OPTIONS UNDER UNITE GROUP INCENTIVES (AUDITED) Deferred bonus (DBP) | | Plan | Held at 1 Jan 2024 | Granted during the year | Exercise price | Vested during the year | Lapsed during the year | Held at 31 Dec 2024 | End of deferral period | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | J Lister | DBP | 1,005 | - | n/a | 1,005 | - | - | 24 Feb 2024 | | | DBP | 10,891 | - | n/a | - | - | 10,891 | 1 Mar 2025 | | | DBP | - | 17,499 | n/a | - | - | 17,499 | 28 Feb 2026 | LTIP awards (PSP and ESOS) | | Plan | Held at 1 Jan 2024 | Granted during the year | Exercise price (£) | Vested during the year | Lapsed during the year | Held at 31 Dec 2024 | Period of qualifying conditions | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | Note 1 | | | | | J Lister | PSP | 70,850 | - | | 53,846 | 17,004 | - | 12 Apr 2021 – 12 Apr 2024 | | | ESOS | 479 | - | 10.835 | 364 | 115 | - | 12 Apr 2021 – 12 Apr 2024 | | | PSP | 73,288 | - | | - | - | 73,288 | 10 Apr 2022 – 10 Apr 2025 | | | ESOS | 535 | - | 11.210 | - | - | 535 | 10 Apr 2022 – 10 Apr 2025 | | | PSP | 89,656 | - | | - | - | 89,656 | 6 Apr 2023 – 6 Apr 2026 | | | ESOS | 635 | - | 9.435 | - | - | 635 | 6 Apr 2023 – 6 Apr 2026 | | | PSP | - | 127,737 | | - | - | 127,737 | 9 Apr 2024 – 9 Apr 2027 | | | ESOS | - | 631 | 9.495 | - | - | 631 | 9 Apr 2024 – 9 Apr 2027 | | M Burt | PSP | 12,935 | - | | 9,830 | 3,105 | - | 12 Apr 2021 – 12 Apr 2024 | | | ESOS | 922 | - | 10,835 | 700 | 222 | - | 12 Apr 2021 – 12 Apr 2024 | | | PSP | 13,093 | - | | - | - | 13,093 | 10 Apr 2022 – 10 Apr 2025 | | | PSP | 25,742 | - | | - | - | 25,742 | 6 Apr 2023 – 6 Apr 2026 | | | ESOS | 1,059 | - | 9.435 | - | - | 1,059 | 6 Apr 2023 – 6 Apr 2026 | | | PSP | - | 82,840 | | - | - | 82,840 | 9 Apr 2024 – 9 Apr 2027 | | | ESOS | - | 631 | 9.495 | - | - | 631 | 9 Apr 2024 – 9 Apr 2027 | Joe Lister's awards vesting for performance during the year are subject to an additional two-year holding period. Mike Burt's awards vesting for performance during the year were granted in respect of his previous role and are not subject to a holding period. Details of the qualifying performance conditions in relation to the above referred-to awards made in prior years are set out on previous pages or in earlier reports. Awards made in prior years took the form of a combination of nil cost options under the PSP and HMRC-approved options under the ESOS. No variations have been made to the terms or conditions of any awards. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- SAYE | | Plan | Held at 1 Jan 2024 | Granted during the year | Option price | Exercised during the year | Held at 31 Dec 2024 | Maturity date | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | Note 1 | | | J Lister | SAYE | 913 | - | 985.2p | - | 913 | 01.12.24 | | | SAYE | 1,251 | - | 741.2p | - | 1,251 | 01.12.26 | As at year-end, Joe Lister held 913 options under the 2021 scheme which had matured but not yet been exercised. ## SHARE PRICE INFORMATION As at 31 December 2024, the middle market price for ordinary shares in the Company was 806.5p per share. During the course of the year, the market price of the Company's shares ranged from 793.0p to 1,046.0p per share. ## DIRECTORS' SERVICE CONTRACTS AND LETTERS OF APPOINTMENT | | Date of appointment | Date of contract/letter of appointment | | --- | --- | --- | | J Lister | 1 Jan 2024 | 1 Jan 2024 | | M Burt | 1 Jan 2024 | 1 Jan 2024 | | R Huntingford | 1 Dec 2020 | 26 Oct 2020 | | R Paterson | 21 Sept 2017 | 21 Sept 2017 | | I Beato | 1 Dec 2018 | 20 July 2018 | | S Pearce | 1 Nov 2019 | 14 Oct 2019 | | T Jackson | 29 Nov 2019 | 29 Nov 2019 | | S Smith | 1 Nov 2019 | 14 Oct 2019 | | N Dulieu | 1 Sept 2022 | 5 Aug 2022 | | A Jain | 1 Aug 2023 | 15 May 2023 | The Directors' Remuneration Report has been approved by the Remuneration Committee and signed on its behalf by: Nicky Dulieu Chair of the Remuneration Committee 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- GOVERNANCE # DIRECTORS' REPORT # Directors' Report As at 31 December 2024, the Company had received notifications from the following companies and institutions of themselves and their clients holding 3% or more of the issued share capital of the Company. The Company has not received any further notifications since that date through to 25 February 2025. ## SHARE CAPITAL | Shareholder | Percentage of share capital | | --- | --- | | Canada Pension Plan Investment Board | 14.85 | | BlackRock Inc | 9.68 | | Norges Bank Investment Management | 8.90 | | APG Asset Management NV | 4.85 | | The Vanguard Group Inc | 4.25 | At the date of this report, there are 488,792,550 ordinary shares of 25p each in issue, all of which are fully paid-up and quoted on the London Stock Exchange. During the year and through to the date of this report, the following numbers of ordinary shares of 25p each were allotted and issued as follows: 50,000,000 – pursuant to the July 2024 capital raise and representing 49,686,114 placing shares, 300,000 retail offer shares, and Director subscribed shares of 13,886 at a price of 924 pence per share 2,808,461 – Unite share scrip scheme 32,086 – pursuant to the exercise of options under Unite Group PLC Savings Related Share Option Scheme 102,901 – pursuant to the exercise of options under Unite Group PLC Performance Share Plan. ![img-104.jpeg](img-104.jpeg) The rights attaching to the Company's ordinary shares, as well as the powers of the Company's Directors, are set out in the Company's Articles of Association. There are no restrictions on the transfer or voting rights of ordinary shares in the capital of the Company (other than those which may be imposed by law from time to time or as set out in the Company's Articles of Association). In accordance with the Market Abuse Regulations, certain employees are required to seek approval to deal in the Company's shares. The Company is not aware of any agreements between shareholders that may result in restrictions on the transfers of securities and/or voting rights. No person holds securities in the Company carrying special rights with regard to control of the Company. Unless expressly specified to the contrary, the Company's Articles of Association may be amended by special resolution of the shareholders. ## PURCHASE OF OWN SHARES The Directors currently have no authority to buy back the Company's shares. The Directors anticipate seeking authority from shareholders to buy back shares in line with institutional investor guidelines at the upcoming 2025 AGM as they consider it prudent to obtain the flexibility that authority provides. Details will be included in the Notice of Annual General Meeting. ## AUTHORITY TO ISSUE SHARES The Directors may only issue shares if authorised to do so by the Articles of Association or the shareholders in general meeting. At the Company's Annual General Meeting held on 16 May 2024, shareholders granted an authority to the Directors THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # CHRISTOPHER SZPOJNAROWICZ ## COMPANY SECRETARY to allot ordinary shares up to an aggregate nominal amount of £36,322,065 (which represented one-third of the nominal value of the issued share capital of the Company as at 26 March 2024). In accordance with guidelines issued by the Investment Association, this resolution also granted the Directors authority to allot further equity securities up to the aggregate amount of £36,322,065 (representing one-third of the nominal value of the issued share capital of the Company as at 26 March 2024). This additional authority was only permitted for fully pre-emptive rights issues. As at 31 December 2024, the shares that had been allotted were to satisfy awards under the Company's share schemes, the scrip scheme and July 2024 capital raise. As this authority is due to expire on 15 August 2025, shareholders will be asked to renew and extend the authority, given to the Directors at the last Annual General Meeting, to allot shares in the Company, or grant rights to subscribe for, or to convert any security into, shares in the Company for the purposes of Section 551 of the Companies Act 2006. Further details on the resolution will be provided in the Notice of this year's Annual General Meeting and its explanatory notes. ## DISAPPLICATION OF PRE-EMPTION RIGHTS If the Directors wish to allot new shares and other equity securities, or sell treasury shares, for cash (other than in connection with an employee share scheme) company law requires that these shares are offered first to shareholders in proportion to their existing holdings. There may be occasions, however, when the Directors need the flexibility to finance business opportunities by the issue of shares without a pre-emptive offer to existing shareholders. This cannot be done under the Companies Act 2006 unless the shareholders have first waived their pre-emption rights. At the forthcoming Annual General Meeting, shareholders will be asked to pass two special resolutions to grant the Directors powers to disapply shareholders' pre-emption rights under certain circumstances. Further details on the resolutions will be provided in the Notice of this year's Annual General Meeting. ## CHANGE OF CONTROL All of the Company's share schemes contain provisions relating to a change of control. Outstanding rewards and options would normally vest and become exercisable on a change of control, subject to the satisfaction of any performance conditions. Other than certain of the Group's banking facilities, there are no other significant agreements to which the Company is a party that affect, alter or terminate upon a change of control of the Company following a takeover bid. Nor are there any agreements between the Company and its Directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. ## GOING CONCERN AND VIABILITY STATEMENT The going concern statement and viability statement are set out on pages 158 and page 62 respectively and are incorporated into this Directors' Report by reference. ## INDEPENDENT AUDITOR AND DISCLOSURE OF INFORMATION TO AUDITORS The Directors who held office at the date of approval of the Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. A resolution to reappoint Deloitte as auditor of the Group will be put to shareholders at the forthcoming Annual General Meeting. ## DIRECTORS' CONFLICTS OF INTEREST The Company has procedures in place for managing conflicts of interest. A Director must notify the Chair (and the Chair notifies the Chief Executive) if he/she becomes aware that he/she, or any of his/her connected parties, may have an interest in an existing or proposed transaction with the Company or the Group. Directors have a continuing duty to update any changes to these conflicts. ## POLITICAL DONATIONS No political donations, contributions or expenditure were made during the year ended 31 December 2024. ## INDEMNITIES There are no qualifying third-party indemnity provisions or qualifying pension scheme indemnity provisions for the benefit of any of the Directors. ## RESEARCH AND DEVELOPMENT The Company is not currently carrying on any activities in the field of research and development. ## BRANCHES OUTSIDE THE UK The Company does not have any branches outside of the UK. 139 --- GOVERNANCE # DIRECTORS' REPORT continued ## APPOINTMENT AND REPLACEMENT OF DIRECTORS The Company's Articles of Association provide that Directors may be appointed by the existing Directors or by the shareholders in a general meeting. Any person appointed by the Directors will hold office only until the next general meeting, notice of which is first given after their appointment and will then be eligible for re-election by the shareholders. A Director may be removed by the Company as provided for by applicable law and shall vacate office in certain circumstances as set out in the Articles of Association. In addition the Company may, by ordinary resolution, remove a Director before the expiration of his/her period of office and, subject to the Articles of Association, may by ordinary resolution appoint another person to be a Director instead. There is no requirement for a Director to retire on reaching any age. ## DISCLOSURES REQUIRED UNDER LISTING RULE 6.6.1R For the purposes of UKLR 6.6.4, the information required to be disclosed by UKLR 6.6.1R can be found in the following locations within the Annual Report: | INFORMATION REQUIRED UNDER LR 6.6.1R | REFERENCE | | --- | --- | | (1) Amount of interest capitalised and tax relief | Note 3.1, page 172 | | (2) Publication of unaudited financial information | N/A | | (3) Details of long-term incentive schemes | Pages 129 and 135 | | (4) Waiver of emoluments by a Director | N/A | | (5) Waiver of future emoluments by a Director | N/A | | (6) Non-pre-emptive issues of equity for cash | Pages 87, 92 and 138 | | (7) Item (6) in relation to major subsidiary undertakings | N/A | | (8) Parent participation in a placing by a listed subsidiary | N/A | | (9) Contracts of significance | N/A | | (10) Provision of services by a controller shareholder | N/A | | (11) Shareholder waiver of dividends | N/A | | (12) Shareholder waiver of future dividends | N/A | | (13) Agreements with controlling shareholders | N/A | All the information referenced above is incorporated by reference into the Directors' Report. ## OTHER INFORMATION INCORPORATED BY REFERENCE The following information in the strategic Report and financial statements is incorporated into this Directors' Report by reference: - Results and dividend on pages 13 and 195 - Greenhouse gas emissions and energy consumption disclosures on pages 63 - Financial instruments and financial risk management on page 61 and Section 4 of the notes to the financial statements on page 186 - Future developments on pages 30-32 - Employment of disabled persons/employee involvement equal opportunities on pages 11, 84 and 99 - Workforce engagement on page 86 - Engagement with customers, partners, suppliers and others on pages 11, 12 and 13 - The Corporate Governance Report (which includes details of Directors who served throughout the year) on pages 74 - 97, the Statement of Directors' responsibilities on page 141 and details of post balance sheet events on page 202 are incorporated into this Directors' Report by reference. ## MANAGEMENT REPORT This Directors' Report together with the strategic report and other sections from the Annual Report forms the Management Report for the purposes of DTR 4.1.8 R. ## ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held at the Company's registered office at South Quay, Temple Back, Bristol, BS1 6FL at 9.30am on 15 May 2025. We request that shareholders who do wish to attend in person pre-register their intention to attend to help us manage numbers. Shareholders are encouraged to monitor our website at https://www.unitegroup.com/investors/agm and London Stock Exchange announcements for any updates regarding the Annual General Meeting arrangements. Formal notice of the meeting is given separately and will be available on the Company's website at: www.unitegroup.com/investors This report was approved by the Board on 25 February 2025 and signed on its behalf by: Christopher Szpojnarowicz Company Secretary 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and Accounts and the Group and Parent Company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRS as adopted by the UK (Adopted IFRS) and applicable law and have elected to prepare the Parent Company financial statements in accordance with United Kingdom Accounting Standards including FRS 101 – Reduced Disclosure Framework (United Kingdom Generally Accepted Practice). Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to: - select suitable accounting policies and then apply them consistently - make judgements and estimates that are reasonable and prudent - state whether they have been prepared in accordance with IFRSs as adopted by the UK (or in accordance with UK Generally Accepted Practice) - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The Directors confirm that: - the Annual Report and Accounts taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy - the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole - the Directors' Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. J J Lister Director 25 February 2025 M J Burt Director THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS ![img-105.jpeg](img-105.jpeg) ![img-106.jpeg](img-106.jpeg) # Financial statements ![img-107.jpeg](img-107.jpeg) 142 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-108.jpeg](img-108.jpeg) # FINANCIAL STATEMENTS 144 Independent auditor's report 153 Consolidated income statement 153 Consolidated statement of comprehensive income 154 Consolidated balance sheet 155 Company balance sheet 156 Consolidated statement of changes in shareholders' equity 157 Company statement of changes in shareholders' equity 157 Consolidated statement of cash flows 158 Notes to the financial statements 213 Financial record ![img-109.jpeg](img-109.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 143 --- FINANCIAL STATEMENTS # INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE UNITE GROUP PLC Report on the audit of the financial statements ## 1. Opinion In our opinion: - the financial statements of The Unite Group PLC (the 'Parent Company') and its subsidiaries (the 'Group') give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 December 2024 and of the Group's profit for the year then ended; - the Group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards; - the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 "Reduced Disclosure Framework"; and - the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements which comprise: - the consolidated income statement; - the consolidated statement of comprehensive income; - the consolidated and Parent Company balance sheets; - the consolidated and Parent Company statements of changes in equity; - the consolidated cash flow statement; - the related sections 1 to 9. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law, and United Kingdom adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 "Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice). ## 2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council's (the 'FRC's') Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group and Parent Company for the year are disclosed in section 2.6 to the financial statements. We confirm that we have not provided any non-audit services prohibited by the FRC's Ethical Standard to the Group or the Parent Company. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## 3. Summary of our audit approach | Key audit matters | The key audit matter that we identified in the current year was: • Investment property and Investment property under development property valuations. Within this report, key audit matters are identified as follows: ☑ Similar level of risk | | --- | --- | | Materiality | The materiality that we used for the Group financial statements was £59.0m which was determined on the basis of net assets. However, we use a lower materiality threshold of £10.0m for balances which impact EPRA earnings. | | Scoping | Our Group audit scope comprised the audit of The Unite Group Plc as well as Group's joint ventures: The Unite UK Student Accommodation Fund ('USAF') and The London Student Accommodation Vehicle ('LSAV'). All audit work was completed by the Group audit team. | | Significant changes in our approach | There have been no significant changes to our approach from the prior year. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 4. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's and Parent Company's ability to continue to adopt the going concern basis of accounting included: - Obtaining an understanding of the relevant controls over the going concern process, including the process to formulate the cashflow forecasts as well as the Board approval process; - Assessing the financing facilities available to the Group and Parent Company, including the associated covenants; - Performing risk assessment procedures including a detailed consideration of the entity's business model, operations and financing; - Assessing the base-case and reasonable worst case as well as evaluating any plans for future mitigating actions. - Assessing the outcome of the reverse stress testing, this includes assessing the likelihood of downside scenarios arising relative to reverse stress tests with reference to the income and cost assumptions; - Testing the arithmetical accuracy of the models used to prepare the Group's forecast and related scenarios; - Assessing the forecasts and sensitivity in the context of compliance with the covenants associated with borrowings; - Assessing the revenue assumptions, for the outturn of the 2024/25 academic year and the assumptions for the 2025/26 academic year. For the 2025/26 academic year specifically, we assessed the Group's current forward sales bookings and UCAS application data to forecast occupancy assumptions for reasonableness; - Assessing the cost assumptions within the forecasts, including consideration of previously incurred costs, the impact of cost inflation, and assumptions made relating to expected future costs associated with climate change and fire-safety related legislation; - Assessing the assumptions regarding refinancing within the going concern period; - Assessing the sufficiency of Group's liquidity and covenant headroom positions with reference to borrowing facility agreements, including the consideration of the availability of undrawn down facilities; and - Assessing the appropriateness of the Group's disclosure concerning the going concern basis of preparation. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors' statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. # 5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. THE UNITE GROUP PLC Annual Report and Accounts 2024 145 --- FINANCIAL STATEMENTS # INDEPENDENT AUDITOR'S REPORT continued ## 5.1. Investment property and investment property under development valuations | Key audit matter description | The Group's principal assets are investment properties (2024: £4,025.5m; 2023: £3,694.3m) and investment properties under development (2024: £451.4m; 2023: £174.6m) which are held at fair value. The Group also holds investments in its joint ventures, USAF and LSAV, with their principal assets also being investment properties. | | --- | --- | | | The property valuations, which are performed by an external valuer, are carried out at six-monthly intervals for the Group and quarterly for the joint ventures in accordance with the Royal Institution of Chartered Surveyors ('RICS') Valuation – Professional Standards (the 'Red Book'). | | | The valuations are determined using actual trading data and a number of subjective assumptions and estimates. We consider the key assumptions to be net operating income (NOI) and property yields. Given the high level of estimation involved, we have determined that there is potential for fraud through possible manipulation of these key assumptions. | | | Valuations are also impacted by refurbishment cost assumptions, including cladding and fire-safety remediation requirements and assumptions relating to climate change legislative requirements. | | | With regards to the investment properties under development, additional estimation is required to forecast discounted cash flows with a deduction for construction costs to complete. | | | Refer to page 101 (Audit & Risk Committee Statement), section 3.1: Wholly owned property assets and section 3.4: Investments in joint ventures. Critical accounting judgements and key sources of estimation uncertainty disclosures relating to investment property and development property valuation are set out in Sections 1 and 3.1. | | How the scope of our audit responded to the key audit matter | We carried out the following audit procedures in response to the identified key audit matter: | | | Understanding the properties and relevant controls: | | | • Obtained an understanding of and tested the relevant controls over the investment property and development property valuation processes. | | | • Performed enquiries with key management to enhance our knowledge of the portfolio and to understand their internal valuation process, the development appraisal process and market. | | | Data provided to the valuer: | | | • Tested the accuracy, completeness and consistency of the information provided to the external valuers. | | | • Tested on a sample basis the forecast cost to complete against budget and costs incurred to date. | | | External valuation: | | | • Assessed the objectivity, competence and capability of the external valuers and reviewed their terms of engagement with the Group to determine whether there were any matters that might have affected their objectivity or may have imposed scope limitations on their work. | | | • With the assistance of our internal real estate valuation specialists, benchmarked the assumptions used against market data, including relevant transactions to identify individual properties where the key assumptions were considered outliers to our expected range. | | | • Along with our internal real estate valuation specialists, met with the external valuer and made enquiries relating to the results of their work on the sample of properties, as well as their views of the broader market. | | | • Made enquiries of the valuers as to whether any special assumptions had been made and how they approach the impact of climate change, cladding and fire-safety remediation in the valuations. | | | • Assessed the valuation methodology used and considered compliance with the Red Book guidance. | | | • Tested the integrity of the model used by the external valuer through recalculation. | | | • Reconciled the external valuation reports to underlying financial records to test for completeness and accuracy within the Group's financial statements. | | | • Compared the property specific assumptions to assess whether there is consistency within the portfolio as well as consistency with related assumptions used in other estimates. | | | Disclosures: | | | • Assessed the appropriateness of the Group's valuation disclosures, including the related sensitivities included within the financial statements. | | Key observations | We concluded that valuation of investment property and investment property under development is appropriate. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 6. Our application of materiality # 6.1. Materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | | Group financial statements | Parent Company financial statements | | --- | --- | --- | | Materiality | £59.0m (2023: £51.0m) | £59.0m (2023: £50.5m) | | Basis for determining materiality | 1.25% (2023: 1.25%) of net assets | 1.25% (2023:1.25%) of net assets. | | Rationale for the benchmark applied | We consider net assets to be a critical financial performance measure for the Group on the basis that it is a key metric used by management, investors, analysts and lenders. | As the parent holding company the principal activity is to hold the investments in subsidiaries. Therefore, the net assets balance is considered to be the key driver of the Parent Company's performance and the most relevant benchmark for materiality. | In addition to net assets, we consider the EPRA earnings to be a critical financial performance measure for the Group and we applied a lower threshold of £10.0m (2023: £8.8m) based on $5\%$ (2023: $5\%$ ) of that measure for testing of all balances impacting this financial performance measure. ![img-110.jpeg](img-110.jpeg) ![img-111.jpeg](img-111.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # INDEPENDENT AUDITOR'S REPORT continued ## 6.2. Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. | | Group financial statements | Parent Company financial statements | | --- | --- | --- | | Performance materiality | 70% (2023: 70%) of Group materiality | 70% (2023: 70%) of Parent Company materiality | | Basis and rationale for determining performance materiality | In determining performance materiality, we considered the following factors: | | | | a. Our risk assessment, including our assessment of the Group's overall control environment, and that we consider it appropriate to rely on controls over a number of business processes; and | | | | b. Our past experience of the audit, which has indicated a low number of corrected and uncorrected misstatements identified in prior periods. | | ## 6.3. Error reporting threshold We agreed with the Audit & Risk Committee that we would report to the Committee all audit differences in excess of £2.9m (2023: £2.4m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit & Risk Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. ## 7. An overview of the scope of our audit ### 7.1. Identification and scoping of components Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level. The Group is audited by one audit team, led by the Senior Statutory Auditor. The Group only operates within the United Kingdom – this includes The Unite Group plc and its related subsidiaries, as well as the two joint ventures, USAF and LSAV. We used individual component performance materiality levels determined on the basis of their individual financial statements, which ranged from £35.4m to £47.2m. We audit all of the results of the Group together with USAF and LSAV, for the purposes of our Group audit. We have also tested the consolidation process to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information. ### 7.2. Our consideration of the control environment The Group uses the following application systems for the recording and reporting of its financial statements: - Oracle EBS – general ledger and room booking system; - Portal Agent Desktop (PAD) – room booking portal used by students and implemented on top of Oracle EBS and therefore where revenue transactions are initiated; and - HFM – used to prepare the Group consolidation at the Group's Head Office. We involved IT specialists to assess the relevant controls over the three systems set out above. Working with IT specialists we identified and assessed relevant risks arising from each relevant IT system and the supporting infrastructure technologies based on the role of application in the Group's flow of transactions. We obtained an understanding of the IT environment as part of these risk assessment procedures. We further performed the following procedures: - Determined whether each general IT control, individually or in combination with other controls, was appropriately designed to address the risk; - Obtained sufficient evidence to assess the operating effectiveness of the controls across the reporting period; and - Altered the nature, timing and extent of our procedures where required if we were unable to rely on controls. From our understanding of the Group and after assessing relevant controls, we tested and relied on controls in performing our audit of the valuation of investment property and investment property under development. As a result of the implementation failure of one relevant control we were unable to take a controls reliant approach in performing our audit of rental income. Additionally, we have obtained an understanding of the relevant controls such as those relating to the financial reporting cycle and going concern. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 7.3. Our consideration of climate-related risks We have made enquiries of management to understand the processes in place to assess the potential impact of climate change on the business and the financial statements. Management consider climate change to be a principal risk which particularly impacts the cost of retrofitting rental accommodation to improve their sustainability credentials and comply with future regulations. These risks are consistent with those identified through our own risk assessment process. As part of our identification of key audit matters, we consider there to be a risk in relation to climate change as part of the valuation of investment properties and investment properties under development. There is a risk that the valuation does not include the relevant assumptions around climate change to the extent assumed by a third party when determining fair value. We made enquiries of the valuer and management as to the assumptions included and considered their appropriateness with the assistance of our internal real estate specialists. In considering the disclosures presented as part of the Strategic Report (pages 2 to 71), we engaged our climate specialists to assess compliance with the TCFD and CFD requirements and the recommendations made by both the Task Force and FRC as set out in their thematic reviews. We have assessed whether these disclosures reflect our understanding of the Group's approach to climate. We have read the Annual Report narrative to consider whether the climate related disclosures are materially consistent with the financial statements and our knowledge obtained in the audit. We have also evaluated the appropriateness of disclosures included in the financial statements in the strategic report. 8. Other information The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9. Responsibilities of directors As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. 10. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. THE UNITE GROUP PLC Annual Report and Accounts 2024 149 --- FINANCIAL STATEMENTS # INDEPENDENT AUDITOR'S REPORT continued ## 11. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. ## 11.1. Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - the nature of the industry and sector, control environment and business performance including the design of the Group's remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets; - results of our enquiries of management, internal audit, the Group's internal legal counsel, the directors and the Audit and Risk committee about their own identification and assessment of the risks of irregularities, including those that are specific to the Group's sector; - any matters we identified having obtained and reviewed the Group's documentation of their policies and procedures relating to: - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; - the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations and IT specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following area: investment property and investment property under development valuations. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules and tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group's ability to operate or to avoid a material penalty. These included the Group's compliance with health and safety matters, including fire safety and fire cladding. ## 11.2. Audit response to risks identified As a result of performing the above, we identified the investment property and investment property under development valuations as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter. In addition to the above, our procedures to respond to risks identified included the following: - reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; - enquiring of management, the Audit & Risk Committee and internal and external legal counsel concerning actual and potential litigation and claims; - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; - reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC; and - in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Report on other legal and regulatory requirements ## 12. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: - the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors' report. ## 13. Corporate Governance Statement The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group's compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: - the directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 80; - the directors' explanation as to its assessment of the Group's prospects, the period this assessment covers and why the period is appropriate set out on page 62; - the directors' statement on fair, balanced and understandable set out on page 81; - the board's confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 81; - the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 52; and - the section describing the work of the Audit & Risk Committee set out on page 101. THE UNITE GROUP PLC Annual Report and Accounts 2024 151 --- FINANCIAL STATEMENTS # INDEPENDENT AUDITOR'S REPORT continued ## 14. Matters on which we are required to report by exception ### 14.1. Adequacy of explanations received and accounting records Under the Companies Act 2006 we are required to report to you if, in our opinion: - we have not received all the information and explanations we require for our audit; or - adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or - the Parent Company financial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. ### 14.2. Directors' remuneration Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. ## 15. Other matters which we are required to address ### 15.1. Auditor tenure Following the recommendation of the Audit & Risk Committee, we were appointed by the board on 10 June 2015 to audit the financial statements for the year ending 31 December 2015 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 10 years, covering the years ending 31 December 2015 to 31 December 2024. ### 15.2. Consistency of the audit report with the additional report to the Audit & Risk Committee Our audit opinion is consistent with the additional report to the Audit & Risk Committee we are required to provide in accordance with ISAs (UK). ### 16. Use of our report This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor's report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R. Stephen Craig FCA (Senior statutory auditor) For and on behalf of Deloitte LLP Statutory Auditor London, United Kingdom 25 February 2025 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2024 | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Rental income | 2.4 | 282.0 | 259.2 | | Other income | 2.4 | 17.3 | 16.9 | | Total revenue | | 299.3 | 276.1 | | Costs of sales | | (86.4) | (76.8) | | Operating expenses | | (43.9) | (41.6) | | Expected credit losses | | (0.9) | (3.0) | | Results from operating activities before (losses)/gains on property | | 168.1 | 154.7 | | Profit/(loss) on disposal of property | | (9.8) | 11.8 | | Net valuation gains/(losses) on property (owned and under development) | 3.1 | 186.7 | (37.2) | | Net valuation losses on property (leased) | 3.1 | (1.9) | (10.4) | | Profit before net financing (costs)/gains and share of joint venture profit | | 343.1 | 118.9 | | Loan interest and similar charges | 4.3 | (19.4) | (19.8) | | Interest on lease liability | 4.3 | (8.8) | (7.7) | | Mark to market changes in interest rate swaps | 4.3 | (0.4) | (17.2) | | Swap cancellation and loan break costs | 4.3 | (3.1) | - | | Finance (costs) | | (31.7) | (44.7) | | Finance income | 4.3 | 16.7 | 1.3 | | Net financing (costs)/gains | | (15.0) | (43.4) | | Share of joint venture profit | 3.4b | 115.9 | 27.0 | | Profit before tax | | 444.0 | 102.5 | | Current tax | 2.5a | (4.8) | (1.2) | | Deferred tax | 2.5a | 2.6 | 2.3 | | Profit for the year | | 441.8 | 103.6 | | Profit for the year attributable to | | | | | Owners of the Parent Company | | 441.9 | 102.5 | | Non-controlling interest | | (0.1) | 1.1 | | | | 441.8 | 103.6 | | Earnings per share | | | | | Basic | 2.2c | 96.3 | 24.7 | | Diluted | 2.2c | 96.1 | 24.6 | All results are derived from continuing activities. # CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2024 | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Profit for the year | | 441.8 | 103.6 | | Share of joint venture movements in effective hedges | 3.4b | (2.3) | (2.1) | | Other comprehensive income for the year | | (2.3) | (2.1) | | Total comprehensive income for the year | | 439.5 | 101.5 | | Attributable to | | | | | Owners of the Parent Company | | 439.6 | 100.4 | | Minority interest | | (0.1) | 1.1 | | | | 439.5 | 101.5 | All other comprehensive income may be classified as profit and loss in the future. There are no tax effects on items of other comprehensive income. THE UNITE GROUP PLC Annual Report and Accounts 2024 153 --- FINANCIAL STATEMENTS # CONSOLIDATED BALANCE SHEET At 31 December 2024 | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Assets | | | | | Investment property (owned) | 3.1 | 4,025.5 | 3,694.3 | | Investment property (leased) | 3.1 | 71.8 | 84.7 | | Investment property under development | 3.1 | 451.4 | 174.7 | | Investment in joint ventures | 3.4b | 1,265.0 | 1,219.0 | | Other non-current assets | 3.3b | 14.8 | 12.7 | | Interest rate swaps | 4.2 | 46.0 | 56.0 | | Right-of-use assets | 3.3a | 4.7 | 1.7 | | Deferred tax asset | 2.5d | 8.2 | 5.6 | | Total non-current assets | | 5,887.4 | 5,248.7 | | Assets classified as held for sale | 3.1 | 92.6 | 25.7 | | Interest rate swaps | 4.2 | 7.4 | - | | Inventories | 3.2 | 13.6 | 26.2 | | Trade and other receivables | 5.2 | 144.6 | 132.8 | | Cash and cash equivalents | 5.1 | 274.3 | 37.5 | | Total current assets | | 532.5 | 222.2 | | Total assets | | 6,419.9 | 5,470.9 | | Liabilities | | | | | Current borrowings | 4.1 | - | (299.4) | | Lease liabilities | 4.6a | (6.0) | (5.4) | | Trade and other payables | 5.4 | (255.5) | (207.8) | | Current tax (liability) / Asset | | (1.2) | 0.6 | | Provisions | 5.5 | (5.1) | (5.2) | | Total current liabilities | | (267.8) | (517.2) | | Borrowings | 4.1 | (1,273.8) | (782.2) | | Lease liabilities | 4.6a | (66.8) | (78.4) | | Total non-current liabilities | | (1,340.6) | (860.6) | | Total liabilities | | (1,608.4) | (1,377.8) | | Net assets | | 4,811.5 | 4,093.1 | | Equity | | | | | Issued share capital | 4.8 | 122.2 | 109.4 | | Share premium | 4.8 | 2,876.9 | 2,447.6 | | Merger reserve | | 40.2 | 40.2 | | Retained earnings | | 1,770.8 | 1,466.0 | | Hedging reserve | | 1.4 | 3.8 | | Equity attributable to owners of the parent company | | 4,811.5 | 4,067.0 | | Non-controlling interest | | - | 26.1 | | Total equity | | 4,811.5 | 4,093.1 | The financial statements of The Unite Group PLC, registered number 03199160, were approved and authorised for issue by the Board of Directors on 25 February 2025 and were signed on its behalf by: Joe Lister Director Mike Burt Director THE UNITE GROUP PLC Annual Report and Accounts 2024 --- At 31 December 2024 COMPANY BALANCE SHEET | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Assets | | | | | Investments in subsidiaries | 3.5 | 2,651.3 | 2,450.8 | | Loan to Group undertaking | 5.2 | 3,416.1 | 2,130.0 | | Interest rate swaps | 4.2 | 46.0 | 56.0 | | Total non-current assets | | 6,113.4 | 4,636.8 | | Trade and other receivables | 5.2 | - | - | | Interest rate swaps | 4.2 | 7.4 | - | | Cash and cash equivalents | | 80.9 | 0.7 | | Total current assets | | 88.3 | 0.7 | | Total assets | | 6,201.7 | 4,637.5 | | Current liabilities | | | | | Amounts due to Group undertakings | 5.6 | (102.1) | (66.7) | | Other payables | 5.4 | (24.8) | (9.1) | | Total current liabilities | | (126.9) | (75.8) | | Borrowings | 4.1 | (1,263.7) | (468.6) | | Total non-current liabilities | | (1,263.7) | (468.6) | | Total liabilities | | (1,390.6) | (544.4) | | Net assets | | 4,811.1 | 4,093.1 | | Equity | | | | | Issued share capital | 4.8 | 122.2 | 109.4 | | Share premium | 4.8 | 2,876.9 | 2,447.6 | | Merger reserve | | 40.2 | 40.2 | | Hedging reserve | | 0.9 | 1.1 | | Retained earnings | | 1,770.9 | 1,494.7 | | Total equity | | 4,811.1 | 4,093.1 | Total equity is wholly attributable to equity holders of The Unite Group PLC. The profit of The Unite Group PLC in 2024 was £414.0 million (2023: £97.2 million). The financial statements of The Unite Group PLC, registered number 03199160, were approved and authorised for issue by the Board of Directors on 25 February 2025 and were signed on its behalf by: Joe Lister Director Mike Burt Director THE UNITE GROUP PLC Annual Report and Accounts 2024 155 --- FINANCIAL STATEMENTS # CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended 31 December 2024 | | Note | Issued share capital £m | Share premium £m | Merger reserve £m | Retained earnings £m | Hedging reserve £m | Attributable to owners of the Parent £m | Non-controlling interest £m | Total £m | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2024 | | 109.4 | 2,447.6 | 40.2 | 1,466.0 | 3.8 | 4,067.0 | 26.1 | 4,093.1 | | Profit/(loss) for the year | | - | - | - | 441.9 | - | 441.9 | (0.1) | 441.8 | | Other comprehensive income for the year: | | | | | | | | | | | Share of joint venture movements in effective hedges | 3.4b | - | - | - | - | (2.3) | (2.3) | - | (2.3) | | Total comprehensive income/(loss) for the year | | - | - | - | 441.9 | (2.3) | 439.6 | (0.1) | 439.5 | | Shares issued | 4.8 | 12.8 | 429.3 | - | - | - | 442.1 | - | 442.1 | | Deferred tax on share-based payments | | - | - | - | 0.1 | - | 0.1 | - | 0.1 | | Fair value of share-based payments | | - | - | - | 2.1 | - | 2.1 | - | 2.1 | | Own shares acquired | | - | - | - | (1.5) | - | (1.5) | - | (1.5) | | Unwind of realised swap gain | | | | | | (0.1) | (0.1) | | (0.1) | | Dividends paid to owners of the Parent Company | 4.9 | - | - | - | (137.8) | - | (137.8) | - | (137.8) | | Disposals of non-controlling interest | | | | | | | | (26.0) | (26.0) | | At 31 December 2024 | | 122.2 | 2,876.9 | 40.2 | 1,770.8 | 1.4 | 4,811.5 | - | 4,811.5 | | | Note | Issued share capital £m | Share premium £m | Merger reserve £m | Retained earnings £m | Hedging reserve £m | Attributable to owners of the Parent £m | Non-controlling interest £m | Total £m | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2023 | | 100.1 | 2,162.0 | 40.2 | 1,479.0 | 6.2 | 3,787.5 | 26.4 | 3,813.9 | | Profit for the year | | - | - | - | 102.5 | - | 102.5 | 1.1 | 103.6 | | Other comprehensive income for the year: | | | | | | | | | | | Share of joint venture movements in effective hedges | 3.4b | - | - | - | - | (2.1) | (2.1) | - | (2.1) | | Total comprehensive income for the year | | - | - | - | 102.5 | (2.1) | 100.4 | 1.1 | 101.5 | | Shares issued | 4.8 | 9.3 | 285.6 | - | - | - | 294.9 | - | 294.9 | | Deferred tax on share-based payments | | - | - | - | 0.2 | - | 0.2 | - | 0.2 | | Fair value of share-based payments | | - | - | - | 2.2 | - | 2.2 | - | 2.2 | | Own shares acquired | | - | - | - | (0.6) | - | (0.6) | - | (0.6) | | Unwind of realised swap gain | | | | | | (0.3) | (0.3) | | (0.3) | | Dividends paid to owners of the Parent Company | 4.9 | - | - | - | (117.3) | - | (117.3) | - | (117.3) | | Dividends to non-controlling interest | | - | - | - | - | - | - | (1.4) | (1.4) | | At 31 December 2023 | | 109.4 | 2,447.6 | 40.2 | 1,466.0 | 3.8 | 4,067.0 | 26.1 | 4,093.1 | The notes on pages 158-212 form part of the financial statements. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended 31 December 2024 | | Note | Issued share capital £m | Share premium £m | Merger reserve £m | Hedging reserve £m | Retained earnings £m | Total £m | | --- | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2024 | | 109.4 | 2,447.7 | 40.2 | 1.1 | 1,494.7 | 4,093.1 | | Profit and total comprehensive income for the year | | - | - | - | - | 414.0 | 414.0 | | Shares issued | 4.8 | 12.8 | 429.2 | - | - | - | 442.0 | | Unwind of realised swap gain | | - | - | - | (0.2) | - | (0.2) | | Dividends to shareholders | 4.9 | - | - | - | - | (137.8) | (137.8) | | At 31 December 2024 | | 122.2 | 2,876.9 | 40.2 | 0.9 | 1,770.9 | 4,811.1 | | | Note | Issued share capital £m | Share premium £m | Merger reserve £m | Hedging reserve £m | Retained earnings £m | Total £m | | --- | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2023 | | 100.1 | 2,162.0 | 40.2 | 1.3 | 1,514.9 | 3,818.5 | | Profit and total comprehensive income for the year | | - | - | - | - | 97.2 | 97.2 | | Shares issued | 4.8 | 9.3 | 285.6 | - | - | - | 294.9 | | Unwind of realised swap gain | | - | - | - | (0.2) | - | (0.2) | | Dividends to shareholders | 4.9 | - | - | - | - | (117.3) | (117.3) | | At 31 December 2023 | | 109.4 | 2,447.7 | 40.2 | 1.1 | 1,494.7 | 4,093.1 | The notes on pages 158-212 form part of the financial statements. # CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2024 | | | Group | | | --- | --- | --- | --- | | | Note | 2024 £m | 2023 £m | | Net cash flows from operating activities | 5.1 | 216.4 | 153.2 | | Investing activities | | | | | Redemption of minority interest | | 27.9 | - | | Payments for investment property | | (347.8) | - | | Capital expenditure on properties | | (267.9) | (135.3) | | Acquisition of intangible assets | | (5.1) | (1.8) | | Acquisition of plant and equipment | | (2.5) | (0.9) | | Proceeds from sale of investment property | | 123.1 | - | | Interest received | | 16.7 | 1.3 | | Dividends received | | 27.6 | 27.3 | | Net cash flows used in investing activities | | (428.0) | (109.4) | | Financing activities | | | | | Proceeds from the issue of share capital | | 442.0 | 294.9 | | Payments to acquire own shares | | (1.5) | (0.6) | | Interest paid in respect of financing activities | | (35.6) | (31.1) | | Repayment of lease liabilities | | (8.8) | (7.7) | | Swap cancellation and loan break costs | | (3.1) | - | | Proceeds from non-current borrowings | | 543.7 | - | | Repayment of borrowings | | (350.5) | (182.5) | | Dividends paid to the owners of the Parent Company | | (124.2) | (103.4) | | Withholding tax paid on distributions | | (13.6) | (12.0) | | Dividends paid to non-controlling interest | | - | (1.9) | | Net cash flows from financing activities | | 448.4 | (44.3) | | Net increase/(decrease) in cash and cash equivalents | | 236.8 | (0.5) | | Cash and cash equivalents at start of year | | 37.5 | 38.0 | | Cash and cash equivalents at end of year | | 274.3 | 37.5 | THE UNITE GROUP PLC Annual Report and Accounts 2024 157 --- # Notes to the Financial Statements ## Section 1: Basis of preparation This section lays out the Group's accounting policies that relate to the financial statements as a whole. Where an accounting policy is specific to a particular note to the financial statements, the policy is described in the note to which it relates and has been clearly identified in a box. ### Basis of consolidation The financial statements consolidate those of Unite Group PLC (the Company) and its subsidiaries (together referred to as the Group) and include the Group's interests in jointly controlled entities. The Company financial statements present information about the Company as a separate entity and not as a group. The Company financial statements have been prepared in accordance with Financial Reporting Standard 101 -- Reduced disclosure framework (FRS 101), and the Group financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the United Kingdom (Adopted IFRS), in conformity with the Companies Act 2006, and approved by the Directors. On publishing the Company financial statements here together with the Group financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related notes. The Company is also taking advantage of the FRS 101 disclosure exemptions from requirements of IFRS 7, IFRS 13 and IAS 1 including presenting a Company statement of cash flows. The accounting policies have been applied consistently to all periods presented in these consolidated financial statements. The Company is a public company limited by shares and is registered in England, United Kingdom, where it is also domiciled. Subsidiaries are those entities controlled by the Company. Control exists when the Company has an existing right that gives it the current ability to direct the relevant activities of the subsidiary, has exposure or right to variable returns from its involvement in the subsidiary and has the ability to use its power to affect its returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-Group balances and transactions, and any unrealised gains and losses arising from intra-Group transactions, such as property disposals and management fees, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the Group's retained interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains except where the loss provides evidence of a reduction in the net realisable value of current assets or an impairment in the value of non-current assets. Non-controlling interests are shown as a line item within equity and comprise the non-controlling interests in subsidiaries which are not directly or indirectly attributable to the Group. Non-controlling interests were assigned to one subsidiary as at 31 December 2023. There was no non-controlling interest as at 31 December 2024 (see note 3.4). ### Measurement convention The financial statements are prepared on the historical cost basis except for investment property (owned), investment property (leased), investment property (under development), investments in subsidiaries and interest rate swaps all of which are stated at their fair value. ### Going concern In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for at least 12 months from the date of this report. The Directors have considered a range of scenarios for future performance through the 2024/25 and 2025/26 academic years. This included a base case assuming cash collection and performance for the 2024/25 academic year remains in line with current expectations and sales performance for the 2025/26 academic year consistent with published guidance; and a reasonable worst-case scenario where income for the 2025/26 academic year is impacted by reduced sales, equivalent to occupancy of around 90%. The impact of our ESG asset transition plans are included within the capex element of our cashflows, which have been modelled to align with the Group's 2030 net zero carbon targets. Under each of these scenarios, the Directors are satisfied that the Group has sufficient liquidity and will maintain covenant compliance over the next 12 months. To further support the Directors' going concern assessment, a Reverse Stress Test was performed to determine the level of performance at which adopting the going concern basis of preparation may not be appropriate. This involved assessing the minimum amount of income required to ensure financial covenants would not be breached. Within the tightest covenant, occupancy could fall to approximately 50% in the Group and 70% in the funds before there would be a breach. The Group has capacity for property valuations to fall by around 70% in the Group and 40% in the funds before there would be a breach of LTV and gearing covenants in facilities where such covenants exist. Were income or asset values to fall beyond these levels, the Group has certain cure rights, such that an immediate default could be avoided. --- The Directors are satisfied that the possibility of such an outcome is sufficiently remote that adopting the going concern basis of preparation is appropriate. Apart from the undrawn RCF, £150m of which matures in March 2026, there is no borrowing maturity in the wholly-owned group until 2027. Refinancing for the USAF £395m secured bond is well progressed in advance of its maturity in June 2025. The LSAV Bank of America loan has two extension options at the borrower's discretion. The Group are currently in the process of extending which will take the maturity out to May 2026. The Directors have considered the impact of climate change in the context of our strategic report and the Group's target of net zero carbon emissions by 2030. These considerations did not have a material impact on our financial reporting. There is limited exposure and vulnerability of climate change on the Group's investment property portfolio, carrying value of non-current assets, and the estimates of future profitability used in our assessment of the recoverability of deferred tax assets. Accordingly, after making enquiries and having considered forecasts and appropriate sensitivities, the Directors have formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of these financial statements. ## Standards and interpretations effective in the current period The accounting policies used in these financial statements are consistent with those applied in the last annual financial statements, as amended where relevant to reflect the adoption of new standards, amendments and interpretations which became effective in the year as listed below: - Amendments to IAS 1 – Classification of liabilities as current or non-current - Amendments to IAS 1 – Non-current Liabilities with Covenants - Amendments to IAS 7 and IFRS 7 – Disclosures: Supplier finance arrangements - Amendments to IFRS 16 – Lease liability in a sale and leaseback. ## Impact of accounting standards and interpretations in issue but not yet effective At the date of approval of these financial statements there are a number of new standards and amendments to existing standards in issue but not yet effective. The Group has not adopted the new or amended standards in preparing these consolidated financial statements. The standards are set out below: - Amendments to IFRS9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and IFRS 7 – Disclosure of the classification and measurement of financial instruments - IFRS 18 Presentation and Disclosure in Financial Statements - IFRS 19 Subsidiaries without Public Accountability: Disclosures. The Group has yet to assess the full outcome of these new standards, amendments and interpretations, however with the exception of IFRS 18 these other new standards, amendments and interpretations are not expected to have a significant impact on the Group's financial statements. ## Critical accounting judgements and key sources of estimation uncertainty The Group's significant accounting policies are stated in the relevant notes to the Group financial statements. The preparation of financial statements requires management to exercise judgement in applying the Group's accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses. ## Critical accounting judgements The areas which involve a high degree of judgement or complexity in applying the accounting policies of the Group are explained in more detail in the accounting policy descriptions in the related notes to the financial statements. Classification of joint venture vehicles (note 3.4) has the most significant impact on the financial statements of the Group. ## Key sources of estimation uncertainty The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and assumptions are reviewed on an ongoing basis with revisions recognised in the period in which the estimates are revised and in any future periods affected. The areas involving the most sensitive estimates and assumptions that are significant to the financial statements are valuation of investment property and investment property under development (note 3.1). THE UNITE GROUP PLC Annual Report and Accounts 2024 159 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Section 2: Results for the year > **i** > This section focuses on the results and performance of the Group and provides a reconciliation between the primary statements and EPRA performance measures. On the following pages you will find disclosures explaining the Group's results for the year, segmental information, taxation, earnings and net tangible asset value (NTA) per share. > > The Group uses EPRA earnings, adjusted earnings and NTA movement as key comparable indicators across other real estate companies in Europe. EPRA earnings, adjusted earnings and NTA movement are Alternative Performance Measures (APMs), further details of which are set out in section 8. ### IFRS performance measures | | Note | 2024 £m | 2023 £m | 2024 pps | 2023 pps | | --- | --- | --- | --- | --- | --- | | Profit after tax * | 2.2b | 441.9 | 102.5 | 96.3 | 24.7 | | Net assets * | 2.3d | 4,811.5 | 4,067.0 | 982 | 931 | * Profit after tax represents profit attributed to the owners of the Parent Company, and net assets represents equity attributable to the owners of the Parent Company. ### EPRA performance measures | | Note | 2024 £m | 2023 £m | 2024 pps | 2023 pps | | --- | --- | --- | --- | --- | --- | | EPRA earnings | 2.2c | 201.9 | 176.1 | 44.0 | 42.4 | | Adjusted earnings ** | 2.2c | 213.8 | 184.3 | 46.6 | 44.3 | | EPRA NTA | 2.3d | 4,758.4 | 4,014.7 | 972 | 920 | ** Adjusted earnings are calculated as EPRA earnings after adding back software as a service costs (net of deferred tax) and abortive costs (see note 2.2a), in order to reflect the performance of the Group's underlying operating activities. ## 2.1 Segmental information The Board of Directors monitors the business along two activity lines: The Operations segment manages rental properties, owned directly by the Group or by joint ventures. Its revenues are derived from rental income and asset management fees earned from joint ventures. The way in which the Operations segment adds value to the business is set out in the Operations review on pages 24-26. The Operations segment is the main contributor to adjusted earnings and adjusted EPS and these are therefore the key indicators which are used by the Board to monitor the Group's financial performance. The Board does not manage or monitor the Operations segment through the balance sheet and therefore no segmental information for assets and liabilities is provided. The Group's Property business undertakes the acquisition and development of properties. The way in which the Property segment adds value to the business is set out in the Property review on pages 29-32. The reportable segments for the years ended 31 December 2024 and 31 December 2023 are Operations and Property. The Group undertakes its Operations and Property activities directly and through joint ventures with third parties. The joint ventures are an integral part of each segment and are included in the information used by the Board to monitor the business. Detailed analysis of the performance of each of these reportable segments is provided in the following sections 2.2 to 2.3. The Group's properties are located exclusively in the United Kingdom. The Group therefore has one geographical segment. ## 2.2 Earnings EPRA earnings and adjusted earnings amend IFRS measures by removing principally the unrealised investment property valuation gains and losses such that users of the financial statements are able to see the extent to which dividend payments (dividend per share) are underpinned by earnings arising from operational activity. In 2024 and 2023, software as a service costs, which were previously capitalised under the existing intangibles policy have been excluded from adjusted earnings (net of deferred tax), to align with the International Financial Reporting Interpretations Committee (IFRIC) agenda decision in 2021. The reconciliation between profit attributable to owners of the Parent Company and EPRA earnings is available in note 2.2b. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 2.2a) EPRA earnings 2024 | | Unite Students £m | Share of joint ventures | | | Group on EPRA basis Total £m | | --- | --- | --- | --- | --- | --- | | | | USAF £m | LSAV £m | Total £m | | | Rental income | 282.0 | 59.0 | 57.0 | 116.0 | 398.0 | | Property operating expenses | (87.2) | (20.7) | (14.0) | (34.7) | (121.9) | | Net operating income | 194.8 | 38.3 | 43.0 | 81.3 | 276.1 | | Management fees | 21.9 | (4.6) | - | (4.6) | 17.3 | | Overheads | (37.5) | (0.5) | (0.4) | (0.9) | (38.4) | | Interest on lease liabilities | (8.8) | - | - | - | (8.8) | | Net financing costs | (6.9) | (11.5) | (16.8) | (28.3) | (35.2) | | Operations segment result | 163.5 | 21.7 | 25.8 | 47.5 | 211.0 | | Property segment result | (3.8) | - | - | - | (3.8) | | Unallocated to segments | (4.8) | (0.2) | (0.3) | (0.5) | (5.3) | | EPRA earnings | 154.9 | 21.5 | 25.5 | 47.0 | 201.9 | | Software as a service costs | 11.9 | - | - | - | 11.9 | | Adjusted earnings | 166.8 | 21.5 | 25.5 | 47.0 | 213.8 | Included in the above is rental income of £20.3 million and property operating expenses of £11.5 million relating to sale and leaseback properties. Included in the above is also rental income of £4.0 million and property operating expenses of £1.2 million, relating to a build-to-rent property. Unallocated to segments includes the fair value of share-based payments of (£2.3 million), contributions to the Unite Foundation and social causes of (£0.6 million), a deferred tax credit of £2.6 million and current tax charge of (£5.1 million). Depreciation and amortisation totalling (£5.7 million) is included within overheads. The software as a service costs are presented net of deferred tax of £4.0 million. 2023 | | Unite Students £m | Share of joint ventures | | | Group on EPRA basis Total £m | | --- | --- | --- | --- | --- | --- | | | | USAF £m | LSAV £m | Total £m | | | Rental income | 259.2 | 57.5 | 52.8 | 110.3 | 369.5 | | Property operating expenses | (79.8) | (20.0) | (13.2) | (33.2) | (113.0) | | Net operating income | 179.4 | 37.5 | 39.6 | 77.1 | 256.5 | | Management fees | 21.4 | (4.5) | - | (4.5) | 16.9 | | Overheads | (32.2) | (0.4) | (0.5) | (0.9) | (33.1) | | Interest on lease liabilities | (7.7) | - | - | - | (7.7) | | Net financing costs | (22.9) | (9.4) | (15.1) | (24.5) | (47.4) | | Operations segment result | 138.0 | 23.2 | 24.0 | 47.2 | 185.2 | | Property segment result | (2.7) | - | - | - | (2.7) | | Unallocated to segments | (6.0) | (0.2) | (0.2) | (0.4) | (6.4) | | EPRA earnings | 129.3 | 23.0 | 23.8 | 46.8 | 176.1 | | Software as a service costs | 8.2 | - | - | - | 8.2 | | Adjusted earnings | 137.5 | 23.0 | 23.8 | 46.8 | 184.3 | Included in the above is rental income of £19.0 million and property operating expenses of £10.2 million relating to sale and leaseback properties. Included in the above is also rental income of £3.8 million and property operating expenses of £1.2 million, relating to a build-to-rent property. Unallocated to segments includes the fair value of share-based payments of (£3.4 million), costs due to leadership changes of (£2.9 million), contributions to the Unite Foundation and social causes of (£1.6 million), a deferred tax credit of £2.5 million and current tax charge of (£1.0 million). Depreciation and amortisation totalling (£6.3 million) is included within overheads. The software as a service costs are presented net of deferred tax of £2.8 million. THE UNITE GROUP PLC Annual Report and Accounts 2024 161 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 2.2b) IFRS reconciliation to EPRA earnings and adjusted earnings EPRA earnings excludes movements relating to changes in values of investment properties (owned, leased and under development), profits/losses from the disposal of properties and swap/debt break costs which are included in the profit reported under IFRS. EPRA earnings and adjusted earnings reconcile to the profit attributable to owners of the Company as follows: | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Profit attributable to owners of the Parent Company | | 441.9 | 102.5 | | Net valuation (gains)/losses on property (owned) | 3.1 | (186.7) | 37.2 | | (Gains)/losses on property disposals (owned) | | 9.8 | (11.8) | | Net valuation losses on property (leased) | 3.1 | 1.9 | 10.4 | | Amortisation of fair value of debt recognised on acquisition | | (4.1) | (4.3) | | Share of joint venture (gains)/losses on investment property | 3.4b | (67.0) | 21.9 | | Share of joint venture property disposals | 3.4b | 2.4 | 3.5 | | Swap cancellation and loan break costs | 4.3 | 3.1 | - | | Mark to market changes in interest rate swaps | 4.3 | 0.4 | 17.2 | | Current tax relating to property disposals | | 0.2 | (0.1) | | Deferred tax | 2.5d | - | (0.2) | | Non-controlling interest share of reconciling items* | | - | (0.2) | | EPRA earnings | | 201.9 | 176.1 | | Software as a service costs | | 11.9 | 8.2 | | Adjusted earnings | | 213.8 | 184.3 | * The non-controlling interest, arises as a result of the Company not owning 100% of the share capital of one of its subsidiaries, USAF (Feeder) Guernsey Limited. This non-controlling interest was disposed of in 2024. More detail is provided in note 3.4. ## 2.2c) Earnings per share Basic EPS calculation is based on the earnings attributable to the equity shareholders of The Unite Group PLC and the weighted average number of shares which have been in issue during the year. Basic EPS is adjusted in line with EPRA guidelines in order to allow users to compare the business performance of the Group with other listed real estate companies in a consistent manner and to reflect how the business is managed on a day-to-day basis. The calculations of basic and EPRA EPS and adjusted EPS for the year ended 31 December 2024 and 2023 are as follows: | | Note | 2024 £m | 2023 £m | 2024 pps | 2023 pps | | --- | --- | --- | --- | --- | --- | | Earnings | | | | | | | Basic | | 441.9 | 102.5 | 96.3 | 24.7 | | Diluted | | | | 96.1 | 24.6 | | EPRA | 2.2b | 201.9 | 176.1 | 44.0 | 42.4 | | Diluted EPRA | | | | 43.9 | 42.2 | | Adjusted earnings | 2.2b | 213.8 | 184.3 | 46.6 | 44.3 | | Diluted adjusted earnings | | | | 46.5 | 44.2 | | | 2024 | 2023 | | --- | --- | --- | | Weighted average number of shares (thousands) | | | | Basic | 458,969 | 415,733 | | Dilutive potential ordinary shares (share options) | 1,087 | 1,165 | | Diluted | 460,056 | 416,898 | Movements in the weighted average number of shares have resulted from the issue of shares arising from the capital raise in July 2024, employee share-based payment schemes and the scrip dividend. In 2024, there were 37,319 options excluded from the potential dilutive shares that did not affect the diluted weighted average number of shares (2023: 16,505). THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 2.3 Net assets ## 2.3a) EPRA NTA EPRA NTA makes adjustments to IFRS measures by removing the fair value of financial instruments and the carrying value of intangibles. The reconciliation between IFRS NAV and EPRA NTA is available in note 2.3c. 2024 | | Unite Students £m | Share of joint ventures | | | Group on EPRA basis Total £m | | --- | --- | --- | --- | --- | --- | | | | USAF £m | LSAV £m | Total £m | | | Investment properties (owned)* | 4,025.5 | 829.6 | 996.9 | 1,826.5 | 5,852.0 | | Investment properties (leased) | 71.8 | - | - | - | 71.8 | | Investment properties under development | 451.4 | - | - | - | 451.4 | | Total property portfolio | 4,548.7 | 829.6 | 996.9 | 1,826.5 | 6,375.2 | | Debt on properties | (1,263.7) | (273.1) | (338.0) | (611.1) | (1,874.8) | | Lease liabilities | (72.8) | - | - | - | (72.8) | | Cash | 274.3 | 70.4 | 20.0 | 90.4 | 364.7 | | Net debt | (1,062.2) | (202.7) | (318.0) | (520.7) | (1,582.9) | | Other assets and (liabilities) | 11.7 | (22.6) | (12.6) | (35.2) | (23.5) | | EPRA net assets | 3,498.2 | 604.3 | 666.3 | 1,270.6 | 4,768.8 | | Intangible assets | (10.4) | - | - | - | (10.4) | | EPRA NTA | 3,487.8 | 604.3 | 666.3 | 1,270.6 | 4,758.4 | | Loan to value** | 22% | 24% | 32% | 29% | 24% | | Loan to value post-IFRS 16 | 23% | 24% | 32% | 29% | 25% | 2023 | | Unite Students £m | Share of joint ventures | | | Group on EPRA basis Total £m | | --- | --- | --- | --- | --- | --- | | | | USAF £m | LSAV £m | Total £m | | | Investment properties (owned)* | 3,727.8 | 827.8 | 954.7 | 1,782.5 | 5,510.3 | | Investment properties (leased) | 84.7 | - | - | - | 84.7 | | Investment properties under development | 174.7 | - | - | - | 174.7 | | Total property portfolio | 3,987.2 | 827.8 | 954.7 | 1,782.5 | 5,769.7 | | Debt on properties | (1,067.6) | (243.5) | (337.0) | (580.5) | (1,648.1) | | Lease liabilities | (83.8) | - | - | - | (83.8) | | Cash | 37.5 | 18.2 | 21.5 | 39.7 | 77.2 | | Net debt | (1,113.9) | (225.3) | (315.5) | (540.8) | (1,654.7) | | Other assets and (liabilities) | (39.0) | (22.3) | (29.7) | (52.1) | (91.0) | | EPRA net assets | 2,834.3 | 580.2 | 609.5 | 1,189.7 | 4,024.0 | | Intangible assets | (9.3) | - | - | - | (9.3) | | EPRA NTA | 2,825.0 | 580.2 | 609.5 | 1,189.7 | 4,014.7 | | Loan to value** | 26% | 27% | 33% | 30% | 28% | | Loan to value post-IFRS 16 | 28% | 27% | 33% | 30% | 29% | * Investment property (owned) includes assets classified as held for sale in the IFRS balance sheet. ** Loan to value (LTV) calculated excluding investment properties (leased) and the corresponding lease liabilities. LTV is an APM - see section 8. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 2.3b) Movement in EPRA NTA during the year Contributions to EPRA NTA by each segment during the year is as follows: 2024 | | Note | Unite Students £m | Share of joint ventures | | | Group on EPRA basis Total £m | | --- | --- | --- | --- | --- | --- | --- | | | | | USAF £m | LSAV £m | Total £m | | | Operations | | | | | | | | Operations segment result | 2.2a | 163.5 | 21.7 | 25.8 | 47.5 | 211.0 | | Add back amortisation of intangibles | 3.3b | 4.0 | - | - | - | 4.0 | | Total Operations | | 167.5 | 21.7 | 25.8 | 47.5 | 215.0 | | Property | | | | | | | | Rental growth | | 269.6 | 29.7 | 46.4 | 76.1 | 345.7 | | Yield movement | | (107.0) | (2.8) | (4.3) | (7.1) | (114.1) | | Disposal (losses) | | (5.5) | (2.4) | - | (2.4) | (7.9) | | Investment property gains (owned)* | | 157.1 | 24.5 | 42.1 | 66.6 | 223.7 | | Investment property loss (leased) | 3.1 | (1.9) | - | - | - | (1.9) | | Disposals losses investment property (leased) | | (4.3) | - | - | - | (4.3) | | Investment property gains (under development) | 3.1 | 24.1 | - | - | - | 24.1 | | Pre-contract/other development costs | 2.2a | (3.8) | - | - | - | (3.8) | | Total Property | | 171.2 | 24.5 | 42.1 | 66.6 | 237.8 | | Unallocated | | | | | | | | Shares issued | | 442.1 | - | - | - | 442.1 | | Investment in joint ventures | | 28.3 | (18.7) | (9.6) | (28.3) | - | | Dividends paid | | (137.8) | - | - | - | (137.8) | | Swap cancellation and debt break costs | | (3.5) | - | - | - | (3.5) | | Purchase of intangibles | | (5.1) | - | - | - | (5.1) | | Share-based payment charge | | (2.4) | - | - | - | (2.4) | | Other | | 2.5 | (3.4) | (1.5) | (4.9) | (2.4) | | Total Unallocated | | 324.1 | (22.1) | (11.1) | (33.2) | 290.9 | | Total EPRA NTA movement in the year | | 662.8 | 24.1 | 56.8 | 80.9 | 743.7 | | Total EPRA NTA brought forward | | 2,825.0 | 580.2 | 609.5 | 1,189.7 | 4,014.7 | | Total EPRA NTA carried forward | | 3,487.8 | 604.3 | 666.3 | 1,270.6 | 4,758.4 | * Investment property gains (owned) includes gains on assets classified as held for sale in the IFRS balance sheet. The £2.4 million Other balance within the Unallocated segment includes the purchase of own shares of (£1.5 million), contributions to the Unite Foundation and other social causes of (£0.6 million) and tax credits of £2.6 million. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 2.3b) Movement in EPRA NTA during the year continued 2023 | | Note | Unite Students | Share of joint ventures | | | Group on EPRA basis Total | | --- | --- | --- | --- | --- | --- | --- | | | | | USAF £m | LSAV £m | Total £m | | | Operations | | | | | | | | Operations segment result | 2.2a | 137.8 | 23.3 | 24.1 | 47.4 | 185.2 | | Add back amortisation of intangibles | 3.3b | 5.2 | - | - | - | 5.2 | | Total Operations | | 143.0 | 23.3 | 24.1 | 47.4 | 190.4 | | Property | | | | | | | | Rental growth | | 185.2 | 41.8 | 56.1 | 97.9 | 286.7 | | Yield movement | | (215.9) | (34.4) | (85.7) | (120.1) | (339.6) | | Disposal Gains / (losses) | | 11.8 | (3.7) | 0.3 | (3.4) | 8.4 | | Investment property (losses)/gains (owned)* | | (18.9) | 3.7 | (29.3) | (25.6) | (44.5) | | Investment property losses (leased) | 3.1 | (10.4) | - | - | - | (10.4) | | Investment property losses (under development) | 3.1 | (6.6) | - | - | - | (6.6) | | Pre-contract/other development costs | 2.2a | (2.8) | - | - | - | (2.8) | | Total Property | | (38.7) | 3.7 | (29.3) | (25.6) | (64.3) | | Unallocated | | | | | | | | Shares issued | | 294.9 | - | - | - | 294.9 | | Investment in joint ventures | | 27.3 | (21.8) | (5.5) | (27.3) | - | | Dividends paid | | (117.3) | - | - | - | (117.3) | | Abortive acquisition costs | | (1.6) | - | - | - | (1.6) | | Share-based payment charge | | (3.4) | - | - | - | (3.4) | | Other | | (0.4) | (0.2) | (0.2) | (0.4) | (0.8) | | Total Unallocated | | 199.6 | (22.0) | (5.7) | (27.7) | 172.0 | | Total EPRA NTA movement in the year | | 303.9 | 5.0 | (10.9) | (6.1) | 298.0 | | Total EPRA NTA brought forward | | 2,521.1 | 575.2 | 620.4 | 1,195.6 | 3,716.7 | | Total EPRA NTA carried forward | | 2,825.0 | 580.2 | 609.5 | 1,189.7 | 4,014.7 | The £0.8 million Other balance within the Unallocated segment includes the purchase of own shares of (£0.6 million), contributions to the Unite Foundation of (£1.6 million) and tax credits of £1.1 million. THE UNITE GROUP PLC Annual Report and Accounts 2024 165 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 2.3c) Reconciliation to IFRS To determine EPRA NTA, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments, associated tax and the carrying value of intangibles. To determine EPRA NRV, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments, associated tax and real estate transfer tax. To determine EPRA NDV, net assets reported under IFRS are adjusted to exclude the fair value of financial instruments, but include the fair value of fixed interest rate debt and the carrying value of intangibles. The net assets reported under IFRS reconcile to EPRA NTA, NRV and NDV as follows: 2024 | | NTA £m | NRV £m | NDV £m | | --- | --- | --- | --- | | Net asset reported under IFRS | 4,811.5 | 4,811.5 | 4,811.5 | | Mark to market interest rate swaps | (53.6) | (53.6) | - | | Unamortised swap gain | (1.0) | (1.0) | (1.0) | | Mark to market of fixed rate debt | - | - | 31.7 | | Unamortised fair value of debt recognised on acquisition | 11.1 | 11.1 | 11.1 | | Current tax | 0.8 | 0.8 | - | | Deferred tax | - | - | - | | Intangibles per IFRS balance sheet | (10.4) | - | - | | Real estate transfer tax | - | 467.4 | - | | EPRA reporting measures | 4,758.4 | 5,236.2 | 4,853.3 | 2023 | | NTA £m | NRV £m | NDV £m | | --- | --- | --- | --- | | Net asset reported under IFRS | 4,067.0 | 4,067.0 | 4,067.0 | | Mark to market interest rate swaps | (58.1) | (58.1) | - | | Unamortised swap gain | (1.2) | (1.2) | (1.2) | | Mark to market of fixed rate debt | - | - | 35.0 | | Unamortised fair value of debt recognised on acquisition | 15.2 | 15.2 | 15.2 | | Current tax | 0.7 | 0.7 | - | | Deferred tax | 0.4 | 0.4 | - | | Intangibles per IFRS balance sheet | (9.3) | - | - | | Real estate transfer tax | - | 306.7 | - | | EPRA reporting measures | 4,014.7 | 4,330.7 | 4,116.0 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 167 # 2.3d) NTA, NRV and NDV per share The Board uses EPRA NTA to monitor the performance of the Property segment on a regular basis. | | Note | 2024 £m | 2023 £m | 2024 pps | 2023 pps | | --- | --- | --- | --- | --- | --- | | Net assets | | 4,811.5 | 4,067.0 | 982 | 931 | | EPRA NTA | 2.3a | 4,758.4 | 4,014.7 | 974 | 931 | | EPRA NTA (diluted) | 2.3a | 4,761.4 | 4,018.6 | 972 | 920 | | EPRA NRV | 2.3c | 5,236.2 | 4,330.7 | 1,071 | 994 | | EPRA NRV (diluted) | | 5,239.2 | 4,334.6 | 1,069 | 992 | | EPRA NDV | 2.3c | 4,853.3 | 4,116.0 | 993 | 944 | | EPRA NDV (diluted) | | 4,856.3 | 4,119.9 | 994 | 943 | | Number of shares (thousands) | | | | 2024 | 2023 | | Basic | | | | 488,792 | 435,855 | | Outstanding share options | | | | 1,308 | 1,165 | | Diluted | | | | 490,100 | 437,019 | # 2.4 Revenue and costs ## Accounting policies The Group recognises revenue from the following major sources: - Rental income - Management and performance fees - Acquisition fees. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of its service to a customer. ## Rental income Rental income comprises direct-lets to students and leases to universities and commercial tenants. This revenue is recognised in the income statement over the length of the tenancy period as the Group provides the services to its customers. Included in the rental contract is the use of utilities, broadband services and contents insurance. The Group does not offer these services as standalone products. Under IFRS 15 the Group does not consider these services to be individually material and has, consequently, bundled these obligations as a single contract. The transaction prices for rental income are explicitly stated in each contract. A contract liability can result from payments received in advance, until the date at which control is transferred to the customer and at that point the revenue begins to be recognised over the tenancy period. Lease incentives are sometimes recognised on commercial units; these are recognised as an integral part of the total rental income and spread over the term of the lease. The Group recognises rental income derived from contracts over 12 months in length in the Income Statement on a straight-line basis in accordance with IFRS 16. ## Management and performance fees The Group acts as asset and property manager for USAF and LSAV and receives management fees in relation to these services. Revenue from these fees is recognised on a straight-line basis over time as the joint ventures simultaneously receive and consume benefits as the Group performs its management obligations which are determined by the services provided over the course of each academic year, and this reflects the profile of activities being performed. Detailed calculations in order to determine the transaction prices for these revenue streams are held within the joint venture agreements. --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 2.4 Revenue and costs continued The Group is entitled to a USAF performance fee if the joint venture outperforms certain benchmarks. The Group recognises a USAF performance fee at a point in time in the year to which the fee relates. The Group initially assesses the probability of a fee being earned and its transaction price at half year and adjusts for any potential risks to receiving this income at year-end, when the achieved outturn is known. The USAF performance fee is settled within 12 months of the year to which the fee relates and the Group receives an enhanced equity interest in USAF as consideration for the performance fee. The Group is entitled to a LSAV performance fee if the joint venture outperforms certain benchmarks over its life ending in 2032. The Group recognises an LSAV performance fee at an amount which is considered highly probable to become due based upon estimates of the future performance of the joint venture; such estimates include future rental income and the discount rate (yield). Prior to the maturity of the joint venture, the Group pro-rates the total LSAV performance fee over the life of the joint venture and recognises a proportion of the fee, only where sufficient certainty over outperformance of the benchmark is determined to exist. As per IFRS 15, the estimated amount of variable consideration is included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. The performance fee is variable and dependent on meeting specific performance targets. Accordingly where there is too much uncertainty over the cumulative outperformance of the benchmarks, particularly in earlier periods of the performance fee period, which cover each ten-year term of the venture, then no amounts of performance fee can be recognised as it is not highly probable that the performance fee will be earned. Management and performance fees are presented in revenue net of the Group's share of the corresponding expense within the relevant fund. At 31 December 2024, no amounts are deemed to meet the highly probable criteria and therefore we have not disclosed any future fees receivable from these ongoing contracts. ## Acquisition fees The Group receives acquisition fees from its joint venture partners. This revenue is linked to the acquisition of land or property and is therefore recognised at the point in time that control of the asset is transferred to the joint venture. The transaction price for this revenue stream is stipulated in the joint venture agreement as a percentage of the value of the acquisition. No such land or property acquisitions have occurred in 2024 or 2023. The Group earns revenue from the following activities: | | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | --- | | Rental income* | Operations segment | 2.2a | 282.0 | 259.2 | | Management fees | Operations segment | | 17.3 | 17.1 | | | | | 299.3 | 276.3 | | Impact of minority interest on management fees | | | - | (0.2) | | Total revenue | | | 299.3 | 276.1 | * EPRA earnings includes £398.0 million (2023: £369.5 million) of rental income, which is comprised of £282.0 million (2023: £259.2 million) recognised on wholly-owned assets and a further £116.0 million (2023: £110.3 million) from joint ventures, which is included in share of joint venture profit/(loss) in the consolidated income statement. The cost of sales included in the consolidated income statement includes property operating expenses of £86.4 million (2023: £76.8 million). THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 2.5 Tax As a REIT, rental profits and gains on disposal of investment properties are exempt from corporation tax. The Group pays UK corporation tax on the profits from its residual business, including management fees received from joint ventures, together with UK income tax on rental income that arises from investments held by offshore subsidiaries in which the Group holds a non-controlling interest. ## Accounting policies The tax charge for the year is recognised in the income statement, statement of comprehensive income and the statement of changes in equity, according to the accounting treatment of the related transaction. The tax charge comprises both current and deferred tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable in respect of previous years. The current tax charge is based on tax rates that are enacted or substantively enacted at the year-end. Deferred tax arises due to certain temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for taxation purposes. Temporary differences relating to investments in subsidiaries and joint ventures are not provided for to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. As a REIT, rental profits and gains on disposal of investment properties and property rich investments are exempt from corporation tax. As a result, no deferred tax provision has been recognised at the balance sheet date in respect of property assets or units in USAF and LSAV held by members of the REIT Group. ## 2.5a) Tax - income statement The total taxation charge/(credit) in the income statement is analysed as follows: | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Corporation tax on residual business income arising in UK companies | 4.9 | 1.0 | | Income tax on UK rental income arising in non-UK companies | 0.1 | 0.4 | | Prior year adjustments | (0.2) | (0.2) | | Current tax charge | 4.8 | 1.2 | | Reversal of deferred tax provision in respect of REIT property business assets | - | - | | Origination and reversal of temporary differences | (2.6) | (2.3) | | Adjustments in respect of prior periods | - | - | | Deferred tax (credit) | (2.6) | (2.3) | | Total tax charge/(credit) in income statement | 2.2 | (1.1) | The movement in deferred tax provided is shown in more detail in note 2.5d. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 2.5a) Tax - income statement continued In the income statement, a tax charge of £2.2 million arises on a profit before tax of £444.0 million. The taxation charge that would arise at the standard rate of UK corporation tax is reconciled to the actual tax charge as follows: | | 2024 £m | 2023 £m | | --- | --- | --- | | Profit before tax | 444.0 | 102.5 | | Income tax using the UK corporation tax rate of 25% (2023: 23.5%) | 111.0 | 24.1 | | Property rental business profits exempt from tax in the REIT Group | (42.7) | (45.7) | | Property revaluations not subject to tax | (66.6) | 16.2 | | Mark to market changes in interest rate swaps not subject to tax | (0.4) | 3.0 | | Unrealised gains on investments | (0.4) | - | | Effect of other permanent differences | 1.4 | 1.3 | | Effect of tax deduction transferred to equity on share schemes | 0.1 | 0.2 | | Rate difference on deferred tax | - | - | | Prior years adjustments | (0.2) | (0.2) | | Total tax charge/(credit) in income statement | 2.2 | (1.1) | As a UK REIT, the Group is exempt from UK corporation tax on the profits from its property rental business. Accordingly, the element of the Group's profit before tax relating to its property rental business has been separately identified in the reconciliation above. No deferred tax asset has been recognised in respect of the Group's accumulated tax losses on the basis that they are not expected to be utilised in future periods. At 31 December 2024, these losses totalled £15.3 million (2023: £15.3 million). Although the Group does not pay UK corporation tax on the profits from its property rental business, it is required to distribute 90% of the profits from its property rental business after accounting for tax adjustments as a Property Income Distribution (PID). PIDs are charged to tax in the same way as property income in the hands of the recipient. For the year ended 31 December 2024, the required PID is expected to be fully paid by the end of 2025. ## 2.5b) Tax - other comprehensive income Within other comprehensive income a tax charge totalling £nil (2023: £nil) has been recognised. ## 2.5c) Tax - statement of changes in equity Within the statement of changes in equity a tax charge totalling £nil (2023: £0.2 million charge) has been recognised representing deferred tax. An analysis of this is included below in the deferred tax movement table. ## 2.5d) Tax - balance sheet The table below outlines the deferred tax (assets)/liabilities that are recognised in the balance sheet, together with their movements in the year: 2024 | | At 31 December 2023 £m | Charged/(Credited) in income £m | Charged/(Credited) in equity £m | At 31 December 2024 £m | | --- | --- | --- | --- | --- | | Investments | 0.4 | (0.4) | - | - | | Property, plant and machinery | (4.9) | (2.3) | - | (7.2) | | Share schemes | (1.1) | - | 0.1 | (1.0) | | Tax value of carried forward losses recognised | - | 0.1 | (0.1) | - | | Net tax liabilities/(assets) | (5.6) | (2.6)* | - | (8.2) | * The £2.6m credit above includes tax movements totalling £2.3m in respect of Property, plant and machinery and Losses which are included in EPRA, which is why they are not included in the IFRS reconciliation in note 2.2b). THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 2.5d) Tax - balance sheet continued 2023 | | At 31 December 2022 | Charged/ (Credited) in income | Charged/ (Credited) in equity | At 31 December 2023 | | --- | --- | --- | --- | --- | | | £m | £m | £m | £m | | Investments | 0.4 | - | - | 0.4 | | Property, plant and machinery | (2.8) | (2.1) | - | (4.9) | | Share schemes | (1.2) | (0.4) | 0.5 | (1.1) | | Tax value of carried forward losses recognised | - | 0.2 | (0.2) | - | | Net tax liabilities/(assets) | (3.6) | (2.3)* | 0.3 | (5.6) | * The £2.3 million credit above includes tax movements totalling £2.5 million in respect of Property, plant and machinery, Share schemes, and Losses which are included in EPRA, which is why they are not included in the IFRS reconciliation in note 2.2b); removing them results in achieving the £0.2 million movement which is excluded as per EPRA's best practice recommendations. The deferred tax liability at 31 December 2024 has been calculated based on the rate at which it is expected to reverse. As a REIT, disposals of investment property and property rich investments are exempt from tax and as a result no deferred tax liability has been recognised in relation to these assets. ## Company Deferred tax has not been recognised on temporary differences of £1.7 million (2023: £1.7 million) in respect of revaluation of subsidiaries and investment in joint ventures as it is considered unlikely that these investments will be divested. ## 2.6 Audit fees During the year, the Group obtained the following services from the Company's auditor and its associates: | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Fees payable to the Group's auditors for the audit of the Parent Company and consolidated financial statements | 0.6 | 0.5 | | Fees payable to the Group's auditors for other services to the Group: | | | | - Audit of the financial statements of subsidiaries | 0.1 | 0.1 | | Total audit fees payable to the Group's auditors | 0.7 | 0.6 | | Audit-related assurance services | 0.1 | 0.1 | | Other services | 0.1 | - | | Total non-audit fees | 0.2 | 0.1 | Non-audit fees in 2023 relate entirely to services provided in respect of the half-year review. Within 2024, non-audit fees include services provided in respect of the half year review and reporting accounting procedures. Details on the Company's policy on the use of the auditor for non-audit services is also set out in the Audit & Risk Committee report on pages 101-105. No services were provided pursuant to contingent fee arrangements. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # NOTES TO THE FINANCIAL STATEMENTS continued ## Section 3: Asset management The Group holds its property portfolio directly and through its joint ventures. The performance of the property portfolio, whether wholly-owned or in joint ventures, is the key factor that drives net asset value (NAV), one of the Group's key performance indicators. The following pages provide disclosures about the Group's investments in property assets and joint ventures and their performance over the year. ### 3.1 Wholly-owned property assets The Group's wholly-owned property portfolio is held in four groups on the balance sheet at the carrying values detailed below. In the Group's EPRA NTA all these groups are shown at market value, except where otherwise stated. #### i) Investment property (owned) These are assets that the Group intends to hold for a long period to earn rental income or capital appreciation. The assets are measured at fair value in the balance sheet with changes in fair value taken to the income statement. #### ii) Investment property (leased) These are assets the Group sold to institutional investors and simultaneously leased back. These right-of-use assets are measured at fair value in the balance sheet with changes in fair value taken to the income statement. #### iii) Investment property (under development) These are assets which are currently in the course of construction and which will be transferred to Investment property on completion. The assets are initially recognised at cost and are subsequently measured at fair value in the balance sheet with changes in fair value taken to the income statement. #### iv) Investment property classified as held for sale These are assets whose carrying amount will be recovered through a sale transaction rather than to hold for long-term rental income or capital appreciation. This condition is regarded as met only when the sale is highly probable and the investment property is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification. The assets are measured at fair value in the balance sheet, with changes in fair value taken to the income statement. They are presented as current assets in the IFRS balance sheet. ### Accounting policies #### Investment property (owned) and investment property (under development) Investment property (owned) and investment property (under development) are held at fair value. The external valuation of property assets involves significant judgement and changes to the core assumptions: rental income, occupancy and property management costs, as well as estimated future costs, could have a significant impact on the carrying value of these assets. Further details of the valuation process are included below. Construction and borrowing costs are capitalised if they are directly attributable to the acquisition and construction of a property asset. Capitalisation of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. Capitalisation of borrowing costs continues until the assets are substantially ready for their intended use but stops if development activities are suspended. The capitalisation rate is arrived at by reference to the actual rate payable on borrowings for development purposes or, with regard to that part of the development cost financed out of general borrowings, to the average rate. During the year the average capitalisation rate used was 6.4% (2023: 6.4%). The recognition of acquisitions of investment property and land occurs at the date when control passes to Unite Group. The recognition of disposals of investment property occurs on legal completion when control passes from Unite Group. In accordance with IFRS 15, gains/(losses) from the disposal of investment property are recognised at a point in time. Contingent consideration receivables are recognised on disposals where the amount of additional consideration is readily identifiable. It is recognised at the constrained value determined by the amount that is highly probable to be receivable at the time of the disposal, and any subsequent change in value is recognised in profit or loss in the later period. The fair value of development properties is determined using a residual method, valuing each property at an estimate of what its fair value would be completed, less the estimated total costs to complete (inclusive of a profit for the developer. #### Investment property (leased) The Group holds certain investment property under historical sale and leaseback arrangements, acting as an intermediate lessor and subleasing its right-of-use assets. For each leased property, the Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability (see note 4.6a) with respect to all lease arrangements in which it is the lessee. The right-of-use assets are initially measured at cost in accordance with IFRS 16 and subsequently at fair value in the balance sheet with changes in fair value taken to the income statement in accordance with IAS 40. --- # Valuation process The valuations of the properties are performed twice a year on the basis of valuation reports prepared by external, independent valuers, having an appropriate recognised professional qualification. The fair values are based on market values as defined in the RICS Appraisal and Valuation Manual, issued by the Royal Institution of Chartered Surveyors, and taking account of committed fire safety and external facade works as provided by Unite. CB Richard Ellis Ltd, Jones Lang LaSalle Ltd and Messrs Knight Frank LLP, Chartered Surveyors were the valuers in the years ended 31 December 2024 and 2023. The Group has transferred the 2024 addition in respect of committed spend on fire safety and façade works taking place in 2025 and 2026 to property valuations, which is presented as a deduction to fair value below. The valuations are based on: Information provided by the Group such as current rents, occupancy, operating costs, terms and conditions of leases and nomination agreements and capital expenditure. This information is derived from the Group's financial systems and is subject to the Group's overall control environment. Assumptions and valuation models used by the valuers – the assumptions are typically market related, such as yield, discount rates and NOI. These are based on their professional judgement and market observation. The information provided to the valuers – and the assumptions and the valuation models used by the valuers – are reviewed by leadership of the Property function and the CFO. This includes a review of the fair value movements over the year. The fair value of the Group's wholly-owned properties and the movements in the carrying value of the Group's wholly-owned property portfolio during the year ended 31 December 2024 are shown in the table below. | | Investment property (owned) £m | Investment property (leased) £m | Investment property under development £m | Total £m | | --- | --- | --- | --- | --- | | At 1 January 2024 | 3,694.3 | 84.7 | 174.7 | 3,953.7 | | Additions | 282.9 | - | 64.9 | 347.8 | | Cost capitalised | 68.3 | 2.2 | 198.8 | 269.3 | | Interest capitalised | - | - | 15.5 | 15.5 | | Transfer from investment property under development | 37.0 | - | (37.0) | - | | Transfer from work in progress | - | - | 17.9 | 17.9 | | Transfer to assets held for sale | (92.6) | - | - | (92.6) | | Disposals | (112.2) | (13.2) | (7.5) | (132.9) | | Valuation gains | 228.4 | - | 33.9 | 262.3 | | Valuation losses | (65.8) | (1.9) | (9.8) | (77.5) | | Net valuation gains/(losses) | 162.6 | (1.9) | 24.1 | 184.8 | | Committed fire safety and external facade works | (14.8) | - | - | (14.8) | | Carrying value at 31 December 2024 | 4,025.5 | 71.8 | 451.4 | 4,548.7 | THE UNITE GROUP PLC Annual Report and Accounts 2024 173 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Valuation process continued The fair value of the Group's wholly-owned properties and the movements in the carrying value of the Group's wholly-owned property portfolio during the year ended 31 December 2023 are shown in the table below. 2023 | | Investment property (owned) | Investment property (leased) | Investment property under development | Total | | --- | --- | --- | --- | --- | | | £m | £m | £m | £m | | At 1 January 2023 | 3,623.4 | 90.3 | 202.7 | 3,916.4 | | Additions | - | - | - | - | | Cost capitalised | 66.5 | 4.8 | 58.9 | 130.2 | | Interest capitalised | - | - | 8.4 | 8.4 | | Transfer from investment property under development | 88.7 | - | (88.7) | - | | Transfer from work in progress | - | - | - | - | | Transfer to assets held for sale | (33.5) | - | - | (33.5) | | Disposals | - | - | - | - | | Valuation gains | 121.1 | - | 32.4 | 153.5 | | Valuation losses | (151.7) | (10.4) | (39.0) | (201.1) | | Net valuation gains/(losses) | (30.6) | (10.4) | (6.6) | (47.6) | | Committed fire safety and external facade works | (20.2) | | | (20.2) | | Carrying value at 31 December 2023 | 3,694.3 | 84.7 | 174.7 | 3,953.7 | Assets classified as held for sale at 31 December 2024 are comprised of £92.6 million of investment property (owned). Assets held for sale are reported within the Property segment and represent a portfolio of properties (split across the Group and joint ventures) intended to be sold within the next 12 months. Total interest capitalised in investment properties (owned) and investment properties under development at 31 December 2024 was £81.9 million (2023: £66.4 million) on a cumulative basis. Total internal costs capitalised in investment properties (owned) and investment properties under development was £84.4 million at 31 December 2024 (2023: £77.1 million) on a cumulative basis. Interests in land not currently under construction totalling £13.5 million (2023: £8.3 million). ## Capital Commitments The Company has contractual commitments of £324.7 million due within one year (2023: £282.9 million) and £263.0 million due within two to four years (2023: £208.5 million). This relates to land, property, plant, and equipment as well as committed development costs. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Recurring fair value measurement All investment and development properties are classified as Level 3 in the fair value hierarchy. | | 2024 | 2023 | | --- | --- | --- | | Class of asset | £m | £m | | London – rental properties | 1,286.7 | 1,154.9 | | Prime regional – rental properties | 1,314.2 | 1,156.0 | | Major regional – rental properties | 1,346.7 | 1,246.0 | | Provincial – rental properties | 100.7 | 104.0 | | London – development properties | 269.5 | 86.2 | | Prime regional – development properties | 157.7 | 57.0 | | Major regional – development properties | 13.0 | 22.0 | | London build-to-rent | 69.8 | 66.9 | | Prime regional build-to-rent - development properties | 11.2 | 9.5 | | Investment property (owned) | 4,569.5 | 3,902.5 | | Investment property (leased) | 71.8 | 84.7 | | Market value (including assets classified as held for sale) | 4,641.3 | 3,987.2 | | Investment property (classified as held for sale) | (92.6) | (33.5) | | Market value | 4,548.7 | 3,953.7 | The valuations have been prepared in accordance with the latest version of the RICS Valuation – Global Standards (incorporating the International Valuation Standards) and the UK national supplement (the Red Book) based on net rental income, estimated future costs, occupancy, property management costs and the net initial yield or discount rate. Where the asset is leased to a university, the valuations also reflect the length of the lease, the allocation of maintenance and insurance responsibilities between the Group and the lessee, and the market's general perception of the lessee's creditworthiness. The resulting valuations are cross-checked against comparable market transactions. For development properties, the fair value is usually calculated by estimating the fair value of the completed property (using the discounted cash flow method) less estimated costs to completion. | Fair value using unobservable inputs (Level 3) | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Opening fair value | 3,953.7 | 3,916.4 | | Additions | 347.8 | - | | Gains and losses recognised in income statement | 184.8 | (47.5) | | Transfer to assets held for sale | (92.6) | (33.5) | | Capital expenditure | 302.7 | 138.5 | | Disposals | (132.9) | - | | Committed fire safety and external facade works | (14.8) | (20.2) | | Closing fair value | 4,548.7 | 3,953.7 | | Investment property (classified as held for sale) | 92.6 | 33.5 | | Closing fair value (including assets classified as held for sale) | 4,641.3 | 3,987.2 | THE UNITE GROUP PLC Annual Report and Accounts 2024 175 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued Quantitative information about fair value measurements using unobservable inputs (Level 3) 2024 | | Fair value £m | Valuation technique | Unobservable inputs | Range | Weighted average | | --- | --- | --- | --- | --- | --- | | London - rental properties | 1,286.7 | RICS Red Book | Net rental income (£ per week) | £214- £479 | £351 | | | | | Estimated rental growth (% p.a.) | 2% - 3% | 3% | | | | | Discount rate (yield) (%) | 4.2% - 4.8% | 4.5% | | Prime regional - rental properties | 1,314.2 | RICS Red Book | Net rental income (£ per week) | £160-£342 | £221 | | | | | Estimated rental growth (% p.a.) | 2% - 9% | 4% | | | | | Discount rate (yield) (%) | 4.3% - 7.1% | 5.1% | | Major regional - rental properties | 1,346.7 | RICS Red Book | Net rental income (£ per week) | £87-£224 | £158 | | | | | Estimated rental growth (% p.a.) | 2% - 6% | 3% | | | | | Discount rate (yield) (%) | 5.1% - 7.9% | 6.2% | | Provincial - rental properties | 100.7 | RICS Red Book | Net rental income (£ per week) | £119-£171 | £133 | | | | | Estimated rental growth (% p.a.) | 2% - 6% | 3% | | | | | Discount rate (yield) (%) | 7.2% - 38.1% | 14.7% | | London - development properties | 269.5 | RICS Red Book | Estimated cost to complete (£m) | £71m-£171m | £123m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.4%-4.5% | 4.5% | | | | | Net rental income (£ per week) | £299-£485 | £345 | | Prime regional - development properties | 157.7 | RICS Red Book | Estimated cost to complete (£m) | £22m- £263m | £165m | | | | | Estimated rental growth (% p.a.) | 3.0% | 3% | | | | | Discount rate (yield) (%) | 4.4%-5.2% | 4.6% | | | | | Net rental income (£ per week) | £247-£271 | £258 | | Major regional - development properties | 13.0 | RICS Red Book | Estimated cost to complete (£m) | £107m | £107m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 5.4% | 5.4% | | | | | Net rental income (£ per week) | £236 | £236 | | | 4,488.5 | | | | | | Investment property - build-to-rent | 69.8 | RICS Red Book | Net rental income (£ per week) | £490 | £490 | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.6% | 4.6% | | Development property - build-to-rent | 11.2 | RICS Red Book | Estimated cost to complete (£m) | £17m | £17m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.4% | 4.4% | | | | | Net rental income (£ per week) | £226 | £226 | | | 4,569.5 | | | | | | Investment property - leased | 71.8 | Discounted cash flows | Net rental income (£ per week) | £119- £233 | £156 | | | | | Estimated rental growth (% p.a.) | 1% - 5% | 3% | | | | | Discount rate (yield) (%) | 10.0% | 10.0% | | Fair value at 31 December 2024 | 4,641.3 | | | | | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Quantitative information about fair value measurements using unobservable inputs (Level 3) continued 2023 | | Fair value £m | Valuation technique | Unobservable inputs | Range | Weighted average | | --- | --- | --- | --- | --- | --- | | London - rental properties | 1,154.9 | RICS Red Book | Net rental income (£ per week) | £206-£424 | £324 | | | | | Estimated rental growth (% p.a.) | 2% - 4% | 3% | | | | | Discount rate (yield) (%) | 4.0% - 4.7% | 4.3% | | Prime regional - rental properties | 1,156.0 | RICS Red Book | Net rental income (£ per week) | £152-£270 | £189 | | | | | Estimated rental growth (% p.a.) | 2% - 5% | 3% | | | | | Discount rate (yield) (%) | 4.3% - 6.7% | 4.9% | | Major regional - rental properties | 1,246.0 | RICS Red Book | Net rental income (£ per week) | £84-£189 | £135 | | | | | Estimated rental growth (% p.a.) | 2% - 5% | 3% | | | | | Discount rate (yield) (%) | 4.9% - 7.2% | 5.7% | | Provincial - rental properties | 104.0 | RICS Red Book | Net rental income (£ per week) | £103-£162 | £136 | | | | | Estimated rental growth (% p.a.) | 2% - 3% | 3% | | | | | Discount rate (yield) (%) | 7.0% - 21.7% | 8.9% | | London - development properties | 86.2 | RICS Red Book | Estimated cost to complete (£m) | £102.2m-£177.1m | £150.1m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.0% | 4.0% | | Prime regional - development properties | 57.0 | RICS Red Book | Estimated cost to complete (£m) | £50.0m - £52.0m | £51.4m | | | | | Estimated rental growth (% p.a.) | 3.0% | 3% | | | | | Discount rate (yield) (%) | 4.4%-5.2% | 4.7% | | Major regional - development properties | 22.0 | RICS Red Book | Estimated cost to complete (£m) | £19.4m - £124.1m | £97.6m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 5.2% | 5.2% | | | 3,826.1 | | | | | | Investment property (BTR) | 66.9 | RICS Red Book | Net rental income (£ per week) | £412 | £412 | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.1% | 4.1% | | Development property (BTR) | 9.5 | RICS Red Book | Estimated cost to complete (£m) | £12.6m | £12.6m | | | | | Estimated rental growth (% p.a.) | 3% | 3% | | | | | Discount rate (yield) (%) | 4.4% | 4.4% | | | 3,902.5 | | | | | | Investment property - leased | 84.7 | Discounted cash flows | Net rental income (£ per week) | £106 - £207 | £168 | | | | | Estimated rental growth (% p.a.) | 1.8% - 2.7% | 2.3% | | | | | Discount rate (yield) (%) | 6.3% | 6.3% | | Fair value at 31 December 2023 | 3,987.2 | | | | | THE UNITE GROUP PLC Annual Report and Accounts 2024 177 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Fair value sensitivity analysis A decrease in net rental income or occupancy will result in a decrease in the fair value, whereas a decrease in the discount rate (yield) will result in an increase in fair value. There are inter-relationships between these rates as they are partially determined by market conditions. These two key sources of estimation uncertainty are considered to represent those most likely to have a material impact on the valuation of the Group's investment property (owned and development) within the next 12 months as a result of reasonably possible changes in assumptions used. The potential effect of such reasonably possible changes has been assessed by the Group and is set out below: | Class of asset | Fair value at 31 December 2024 | +5% change in estimated net rental income | -5% change in estimated net rental income | +25 bps change in net initial yield | -25 bps change in net initial yield | | --- | --- | --- | --- | --- | --- | | | £m | £m | £m | £m | £m | | Rental properties | | | | | | | London | 1,286.7 | 1,338.5 | 1,208.5 | 1,204.4 | 1,350.7 | | Prime regional | 1,314.2 | 1,369.1 | 1,236.8 | 1,240.7 | 1,372.0 | | Major regional | 1,346.7 | 1,402.7 | 1,267.1 | 1,278.3 | 1,396.6 | | Provincial | 100.7 | 105.9 | 95.6 | 98.0 | 103.8 | | Development properties | | | | | | | London | 269.5 | 281.7 | 257.6 | 256.8 | 284.0 | | Prime regional | 157.7 | 166.3 | 150.6 | 150.3 | 167.5 | | Major regional | 13.0 | 12.8 | 11.6 | 11.7 | 12.8 | | Build-to-rent | | | | | | | London | 69.8 | 71.6 | 64.8 | 64.7 | 72.1 | | Prime regional | 11.2 | 11.8 | 10.6 | 10.6 | 11.9 | | Market value | 4,569.5 | 4,760.4 | 4,303.2 | 4,315.5 | 4,771.4 | ## 3.2 Inventories ### Accounting policies Inventories are shown at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. All costs directly associated with the purchase of land, and all subsequent qualifying expenditure is capitalised. | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Interests in land | 13.5 | 25.3 | | Other stocks | 0.1 | 0.9 | | Inventories | 13.6 | 26.2 | At 31 December 2024 and 31 December 2023 interests in land includes conditionally exchanged schemes. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 3.2 Inventories continued # Accounting policies # Leased assets The Group assesses whether a contract is or contains a lease at its inception. The Group recognises a right-of-use asset and a corresponding lease liability (see note 4.6a) with respect to all lease arrangements in which it is the lessee. Right-of-use assets are initially measured at cost, which comprises a value set equal to the lease liability, adjusted for prepaid or accrued lease payments and lease incentives. They are subsequently measured at this initial value less accumulated depreciation and impairment losses. # Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Property, plant and equipment mainly comprise leasehold improvements at the Group's head office and London office as well as computer hardware at these sites. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives. Freehold land is not depreciated. The estimated useful lives are as follows: Right-of-use assets Shorter of lease and economic life Property, plant and equipment 4-7 years # Intangible assets # Software-as-a-Service (SaaS) arrangements IAS 38 Intangible Assets – In March 2019, the IFRS Interpretations Committee (IFRIC), concluded that SaaS arrangements are likely to be service arrangements, rather than booked as intangible or leased assets, because the customer only has a right to use software on a supplier's cloud infrastructure. Therefore, the supplier controls the software and not the customer. Intangible assets predominantly comprise of on-premises computer software which allows customers to book online and processes transactions within the sales cycle. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. The assets are amortised on a straight-line basis over four to seven years, being the estimated useful lives of the intangible assets, from the date they are available for use. Amortisation is charged to the income statement within overheads. # 3.3 Right of use assets and other non-current assets # 3.3a) Right-of-use assets | | 2024 | | | 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | Buildings £m | Other £m | Total £m | Buildings £m | Other £m | Total £m | | Cost | | | | | | | | At 1 January | 5.0 | 0.8 | 5.8 | 5.0 | 1.3 | 6.3 | | Additions | 3.9 | - | 3.9 | - | - | - | | Disposals | - | (0.5) | (0.5) | - | (0.5) | (0.5) | | At 31 December | 8.9 | 0.3 | 9.2 | 5.0 | 0.8 | 5.8 | | Amortisation | | | | | | | | At 1 January | (3.7) | (0.4) | (4.1) | (2.9) | (0.7) | (3.6) | | Depreciation/amortisation charge for the year | (0.7) | (0.2) | (0.9) | (0.8) | (0.2) | (1.0) | | Disposals | - | 0.5 | 0.5 | - | 0.5 | 0.5 | | At 31 December | (4.4) | (0.1) | (4.5) | (3.7) | (0.4) | (4.1) | | Carrying value at 1 January | 1.3 | 0.4 | 1.7 | | | | | Carrying amount at 31 December | 4.5 | 0.2 | 4.7 | 2.1 | 0.6 | 2.7 | The Group leases several assets including office equipment and vehicles. The average lease term is five years (2023: three years). THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 3.3a) Right-of-use assets continued Approximately 7% of the leases expired in the current financial year (2023: 15%). The expired office contract was replaced and therefore, there were £3.0 million additions in 2024 (2023: £nil million). The maturity analysis of lease liabilities is presented in note 4.6a. Details of interest on lease liabilities and total cash outflows for leases are presented in notes 4.3 and 5.1. ## 3.3b) Other non-current assets The Group's other non-current assets can be analysed as follows: | | 2024 | | | 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | Property, plant and equipment £m | Intangible assets £m | Total £m | Property, plant and equipment £m | Intangible assets £m | Total £m | | Cost or valuation | | | | | | | | At 1 January | 14.5 | 68.6 | 83.1 | 13.6 | 67.0 | 80.6 | | Additions | 1.8 | 5.1 | 6.9 | 0.9 | 1.6 | 2.6 | | Disposals | - | - | - | - | - | - | | At 31 December | 16.3 | 73.7 | 90.0 | 14.5 | 68.6 | 83.1 | | Depreciation, amortisation and impairment losses | | | | | | | | At 1 January | (11.1) | (59.3) | (70.4) | (10.4) | (54.8) | (65.2) | | Depreciation/amortisation charge for the year | (0.8) | (4.0) | (4.8) | (0.7) | (4.5) | (5.2) | | At 31 December | (11.9) | (63.3) | (75.2) | (11.1) | (59.3) | (70.4) | | Carrying value at 1 January | 3.4 | 9.3 | 12.7 | 3.2 | 12.2 | 15.4 | | Carrying amount at 31 December | 4.4 | 10.4 | 14.8 | 3.4 | 9.3 | 12.7 | Intangible assets include £0.5 million (2023: £1.9 million) of assets not being amortised as they are not yet ready for use. Property, plant and equipment assets include £nil (2023: £nil) of assets not being depreciated as they are not ready for use. At 31 December 2024, the Group had capital commitments of £nil (2023: £nil) relating to intangible assets and £nil (2023: £nil) relating to property, plant and equipment. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 # 3.4 Investments in joint ventures (Group) ## Accounting policies Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement. The consolidated financial statements include joint ventures initially at cost, subsequently increased or decreased by the Group's share of total gains and losses of joint ventures on an equity basis. Interest free joint venture investment loans are initially recorded at fair value – the difference between the nominal amount and fair value being treated as an investment in the joint venture. The implied discount is amortised over the contracted life of the investment loan. The Directors consider that the agreements integral to its joint ventures result in the Group having joint control over the key matters required to operate the joint ventures. A significant degree of judgement is exercised in this assessment due to the complexity of the contractual arrangements. USAF and LSAV are jointly owned entities that are accounted for as joint ventures. Due to the complexity of the contractual arrangements and Unite Group's role as manager of the joint venture vehicles, the assessment of joint control involves judgements around a number of significant factors. These factors include how Unite Group as fund manager has the ability to direct relevant activities such as acquisitions, disposals, capital expenditure for refurbishments and funding whether through debt or equity. This assessment for USAF is complex because of the number of unit holders and how their rights are represented through an Advisory Committee. For some of the activities it is not clear who has definitive control of the activities: in some scenarios the Group can control, in others the Advisory Committee. However, for the activities which are considered to have the greatest impact on the returns of USAF, acquisitions and equity financing, it has been determined that the Group and the Advisory Committee have joint control in directing these activities and that on balance, it is appropriate to account for USAF as a joint venture. The assessment for LSAV is more straightforward because the Group and GIC each own 50% of the joint venture and there is therefore much clearer evidence that control over the key activities is shared by the two parties. The Group has two joint ventures: | Joint venture | Group's share of assets/results 2024 (2023) | Objective | Partner | Legal entity in which Group has interest | | --- | --- | --- | --- | --- | | The UNITE UK Student Accommodation Fund (USAF) | 29.1%* (29.5%)* | Operate student accommodation throughout the UK | Consortium of investors | UNITE UK Student Accommodation Fund, a Jersey Unit Trust | | London Student Accommodation Venture (LSAV) | 50% (50%) | Operate student accommodation in London and Birmingham | GIC Real Estate Pte, Ltd Real estate investment vehicle of the Government of Singapore | LSAV Unit Trust, a Jersey Unit Trust and LSAV (Holdings) Ltd, incorporated in Jersey | * At the start of the year, part of the Group's interest was held through a subsidiary, USAF (Feeder) Guernsey Limited, in which there was an external investor. This was disposed of during the year. In 2023, a non-controlling interest occurred on consolidation of the Group's results representing the external investor's share of profits and assets relating to its investment in USAF. In 2023, the ordinary shareholders of Unite Group PLC were beneficially interested in 28.15% of USAF. 181 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 3.4a) Net assets and results of the joint ventures The summarised balance sheets and results for the year, and the Group's share of these joint ventures are as follows: | 2024 | USAF | | | LSAV | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | | | £m | | | £m | | £m | | | Summarised balance sheet | Gross | MI | Share | Gross | Share | Gross | Share | | Investment property | 2,847.3 | - | 829.6 | 1,993.8 | 996.9 | 4,841.1 | 1,826.5 | | Cash | 241.6 | - | 70.4 | 40.0 | 20.0 | 281.6 | 90.4 | | Borrowings Non-Current | (937.3) | - | (273.1) | (276.0) | (138.0) | (1,213.3) | (411.1) | | Borrowings Current | - | - | - | (400.0) | (200.0) | (400.0) | (200.0) | | Swap assets | - | - | - | - | - | - | - | | Other current assets | 7.9 | - | 2.3 | 22.8 | 11.4 | 30.7 | 13.7 | | Other current liabilities | (85.7) | - | (25.0) | (47.8) | (23.9) | (133.5) | (48.9) | | Net assets | 2,073.8 | - | 604.2 | 1,332.8 | 666.4 | 3,406.6 | 1,270.6 | | Minority interest | - | - | - | - | - | - | - | | Swap liabilities | - | - | - | - | - | - | - | | EPRA net assets | 2,073.8 | - | 604.2 | 1,332.8 | 666.4 | 3,406.6 | 1,270.6 | | Summarised income statement | | | | | | | | | Rental income | 207.5 | - | 58.8 | 112.2 | 56.1 | 319.7 | 114.9 | | Other income | 0.7 | - | 0.2 | 1.8 | 0.9 | 2.5 | 1.1 | | Total Revenue | 208.2 | - | 59.0 | 114.0 | 57.0 | 322.2 | 116.0 | | Cost of sales | (73.1) | - | (20.7) | (28.0) | (14.0) | (101.1) | (34.7) | | Operating expenses | (2.6) | - | (0.7) | (1.4) | (0.7) | (4.0) | (1.4) | | Results from operating activities before (losses)/gains on property | 132.5 | - | 37.6 | 84.6 | 42.3 | 217.1 | 79.9 | | Profit/(loss) on disposal of property | (8.5) | - | (2.4) | - | - | (8.5) | (2.4) | | Net valuation movement | 81.4 | - | 26.2 | 81.5 | 40.8 | 162.9 | 67.0 | | Net financing (costs)/gains | (40.5) | - | (11.5) | (33.6) | (16.8) | (74.1) | (28.3) | | Profit before tax | 164.9 | - | 49.9 | 132.5 | 66.3 | 297.4 | 116.2 | | Taxation | (0.1) | - | - | (0.6) | (0.3) | (0.7) | (0.3) | | Profit for the year after tax | 164.8 | - | 49.9 | 131.9 | 66.0 | 296.7 | 115.9 | | Other comprehensive income | (0.7) | - | (0.3) | (3.6) | (2.0) | (4.3) | (2.3) | | Total comprehensive (expense)/income | 164.1 | - | 47.6 | 128.3 | 64.0 | 292.4 | 113.6 | | Dividends received from the joint ventures during the year | | | 13.8 | | 13.8 | | 27.6 | * Investment property includes assets classified as held for sale in the IFRS balance sheet. 182 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 3.4a) Net assets and results of the joint ventures continued | 2023 | USAF | | | LSAV | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | | | £m | | | £m | | £m | | | Summarised balance sheet | Gross | MI | Share | Gross | Share | Gross | Share | | Investment property | 2,940.8 | 38.7 | 827.8 | 1,909.4 | 954.7 | 4,850.2 | 1,821.2 | | Cash | 64.7 | 0.9 | 18.2 | 43.0 | 21.5 | 107.7 | 40.6 | | Debt | (865.0) | (11.4) | (243.5) | (674.0) | (337.0) | (1,539.0) | (591.9) | | Swap assets | 1.4 | - | 0.4 | 3.6 | 1.8 | 5.0 | 2.2 | | Other current assets | 12.4 | 0.2 | 3.5 | (2.8) | (1.4) | 9.6 | 2.3 | | Other current liabilities | (92.1) | (1.2) | (25.8) | (56.6) | (28.4) | (148.7) | (55.4) | | Net assets | 2,062.2 | 27.2 | 580.6 | 1,222.6 | 611.2 | 3,284.8 | 1,219.1 | | Minority interest | - | (27.2) | - | - | - | - | (27.2) | | Swap liabilities | (1.4) | - | (0.4) | (3.6) | (1.7) | (5.0) | (2.1) | | EPRA net assets | 2,060.7 | - | 580.1 | 1,219.0 | 609.5 | 3,279.8 | 1,189.7 | | Summarised income statement | | | | | | | | | Rental income | 203.4 | 2.7 | 57.3 | 103.6 | 51.8 | 307.0 | 111.8 | | Other income | 0.9 | - | 0.2 | 2.0 | 1.0 | 2.9 | 1.2 | | Total Revenue | 204.3 | 2.7 | 57.5 | 105.6 | 52.8 | 309.9 | 113.0 | | Cost of sales | (70.6) | (1.5) | (19.9) | (26.4) | (13.2) | (97.0) | (34.6) | | Operating expenses | (2.4) | - | (0.6) | (1.2) | (0.6) | (3.6) | (1.2) | | Results from operating activities before (losses)/gains on property | 131.3 | 1.2 | 37.0 | 78.0 | 39.0 | 209.3 | 77.2 | | Profit/(loss) on disposal of property | (13.1) | - | (3.7) | 0.6 | 0.3 | (12.5) | (3.4) | | Net valuation movement | 20.3 | - | 7.4 | (59.2) | (29.6) | (38.9) | (22.2) | | Net financing (costs)/gains | (33.5) | - | (9.5) | (30.0) | (15.0) | (63.5) | (24.5) | | Profit before tax | 105.0 | 1.2 | 31.2 | (10.6) | (5.3) | 94.4 | 27.1 | | Taxation | (0.1) | - | - | (0.2) | (0.1) | (0.3) | (0.1) | | (Loss)/Profit for the year after tax | 104.9 | 1.2 | 31.2 | (10.8) | (5.4) | 94.1 | 27.0 | | Other comprehensive income | (2.3) | - | (0.7) | (1.2) | (0.6) | (3.5) | (1.3) | | Total comprehensive (expense)/income | 102.6 | 1.2 | 30.5 | (12.0) | (6.0) | 90.6 | 25.7 | | Dividends received from the joint ventures during the year | | 0.8 | 21.8 | | 5.4 | | 28.0 | Net assets and profit/(loss) for the year above include the non-controlling interest, whereas EPRA NTA excludes the non-controlling interest. USAF and LSAV use derivatives to hedge their borrowings. These derivatives are designated in cash flow hedge relationships which are considered to be fully effective. The share of joint venture mark to market movements on hedging instruments is recognised in the Group's Other Comprehensive Income within the share of joint venture mark to market movements on hedging instruments. The total notional value of borrowings in hedge relationships at 31 December 2024 is £340 million (2023: £415.0 million). See note 4.5 for further details. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 3.4b) Movement in carrying value of the Group's investments in joint ventures The carrying value of the Group's investment in joint ventures increased by £46.0 million during the year ended 31 December 2024 (2023: £7.6 million decrease), resulting in an overall carrying value of £1,265.0 million (2023: £1,219.0 million). The following table shows how the decrease has arisen: | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Recognised in the income statement: | | | | Operations segment result | 47.5 | 47.4 | | Non-controlling interest share of Operations segment result | (0.2) | 1.3 | | Management fee adjustment relating to trading with joint venture | 4.8 | 4.5 | | Net valuation (losses)/gains on investment property | 67.0 | (21.9) | | Property disposals | (2.4) | (3.5) | | Ineffective swap | (0.4) | (0.4) | | Other | (0.4) | (0.4) | | | 115.9 | 27.0 | | Recognised in equity: | | | | Movement in effective hedges | (2.3) | (2.1) | | Other adjustments to the carrying value: | | | | Profit adjustment related to trading with joint venture | (4.8) | (4.5) | | Disposal of non-controlling interest | (27.9) | - | | Additional capital invested in USAF | (7.4) | - | | Distributions received | (27.5) | (28.0) | | Increase/(Decrease) in carrying value | 46.0 | (7.6) | | Carrying value at 1 January | 1,219.0 | 1,226.6 | | Carrying value at 31 December | 1,265.0 | 1,219.0 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 185 # 3.4c) Transactions with joint ventures The Group acts as asset and property manager for the joint ventures and receives management fees in relation to these services. In addition, the Group is entitled to performance fees from USAF and LSAV if the joint ventures outperform certain benchmarks. No performance fees were recognised in the year (2023: £nil). | | 2024 £m | 2023 £m | | --- | --- | --- | | USAF | 16.9 | 16.6 | | LSAV | 4.9 | 4.8 | | Asset management fees | 21.8 | 21.4 | | Investment management fees | - | - | | Total fees | 21.8 | 21.4 | On an EPRA basis, fees from joint ventures are shown net of the Group's share of the cost to the joint ventures. The Group's share of the management fees to the joint ventures is £4.6 million (2023: £4.5 million), which results in management fees from joint ventures of £17.3 million being shown in the Operating segment result in note 2.2a (2023: £16.9 million). During the year, the Group purchased seven properties from USAF for gross proceeds of £235.5m and sold two properties to USAF for total gross proceeds of £118.5m. Both sale and purchase were transacted at fair value which was the same as the carrying value. As part of these transactions, the Group paid £117.0m of cash to USAF reflecting the net difference in value between these assets, this balance is presented within investing activities in the consolidated statement of cash flows. # 3.5 Investments in subsidiaries (Company) ## Accounting policies In the financial statements of the Company, investments in subsidiaries are held at fair value. Changes in fair value are recognised in profit or loss and presented in retained earnings in equity. ### Carrying value of investment in subsidiaries The movements in the Company's interest in unlisted subsidiaries and joint ventures during the year are as follows: | | Investment in subsidiaries | | | --- | --- | --- | | | 2024 | 2023 | | | £m | £m | | At 1 January | 2,450.8 | 2,397.0 | | Revaluation | 200.5 | 53.8 | | At 31 December | 2,651.3 | 2,450.8 | The carrying value of investment in subsidiaries has been calculated using the equity attributable to the owners of the Company from the consolidated balance sheet adjusted for the fair value of fixed rate loans. This includes investment property, investment property under development and swaps at a fair value calculated by a third-party expert. All investment properties and investment properties under development are classified as Level 3 in the IFRS 13 fair value hierarchy are discussed on page 187. The fixed rate loans range between Level 1 and Level 2 in the IFRS 13 fair value hierarchy are discussed further on page 187. Significant assumptions underlying the valuation of investment in subsidiaries are valuation of investment property and investment property under development, together with the value of borrowings and inter-company debt. A full list of the Company's subsidiaries and joint ventures can be found in note 9. --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Section 4: Funding i The Group finances its development and investment activities through a mixture of retained earnings, borrowings and equity. The Group continuously monitors its financing arrangements to manage its gearing. Interest rate swaps are used to manage the Group's risk to fluctuations in interest rate movements. The following pages provide disclosures about the Group's funding position, including borrowings, gearing and hedging instruments; its exposure to market risks; and its capital management policies. ## Accounting policies ### Financial instruments Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value, less any attributable transaction costs, and subsequently at amortised cost. Total financial assets at amortised costs is £37.5m (2023: £34.8m). Total financial liabilities at amortised costs is £1,347.5m (2023: 1,123.9m). With the exception of investments in subsidiaries and derivative financial instruments, no other financial assets or liabilities have been classified as either fair value through profit or loss or fair value through other comprehensive income. The accounting policies applicable to specific financial assets and liabilities, and financing costs, are set out in the relevant notes. ### Impairment of financial assets The Group recognises a loss allowance for expected credit losses on trade receivables. The Accounting Policy is set out in full in note 5.2. ### Derivative financial instruments The Group enters into derivative financial instruments to manage its exposure to interest rate risk. Further details of derivative financial instruments, including the relevant accounting policies, are disclosed in notes 4.2 and 4.5. ## 4.1 Borrowings ### Accounting policies Interest bearing borrowings are recognised initially at fair value, less attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis. The table below analyses the Group's borrowings which comprise bank and other loans by when they fall due for payment: | | Group – Carrying value | | Company – Carrying value | | | --- | --- | --- | --- | --- | | | 2024 | 2023 | 2024 | 2023 | | | £m | £m | £m | £m | | Current | | | | | | In one year or less, or on demand | - | 299.4 | - | - | | Non-current | | | | | | In more than one year but not more than two years | 147.6 | - | 147.6 | - | | In more than two years but not more than five years | 572.3 | 320.7 | 572.3 | 45.7 | | In more than five years | 543.8 | 447.6 | 543.8 | 423.0 | | | 1,263.7 | 1,067.6 | 1,263.7 | 468.7 | | Unamortised fair value of debt recognised on acquisition | 10.1 | 14.0 | - | - | | Total borrowings | 1,273.8 | 1,081.6 | 1,263.7 | 468.7 | In addition to the borrowings currently drawn as shown above, the Group has available undrawn facilities of £750.0 million (2023: £550.0 million). A further overdraft facility of £10.0 million (2023: £10.0 million) is also available. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- The carrying value and fair value of the Group's borrowings is analysed below: | | 2024 | | 2023 | | | --- | --- | --- | --- | --- | | | Carrying value | Fair value | Carrying value | Fair value | | Group | £m | £m | £m | £m | | Level 1 IFRS fair value hierarchy | 975.0 | 956.6 | 875.0 | 852.3 | | Other loans and unamortised arrangement fees | 288.7 | 275.4 | 192.6 | 180.3 | | Total borrowings | 1,263.7 | 1,232.0 | 1,067.6 | 1,032.6 | | | 2024 | | 2023 | | | | Carrying value | Fair value | Carrying value | Fair value | | Company | £m | £m | £m | £m | | Level 1 IFRS fair value hierarchy | 975.0 | 956.6 | 275.0 | 268.4 | | Other loans and unamortised arrangement fees | 288.7 | 275.4 | 193.7 | 180.3 | | Total borrowings | 1,263.7 | 1,232.0 | 468.7 | 448.7 | The fair value of loans classified as Level 1 in the IFRS fair value hierarchy is determined using quoted prices in active markets for identical liabilities. The following table shows the changes in liabilities arising from financing activities: 2024 | Group | At 1 January 2024 | Financing cash flows | Interest expense | Fair value adjustments | Other changes | At 31 December 2024 | | --- | --- | --- | --- | --- | --- | --- | | Borrowings | 1,081.6 | 193.2 | - | (4.1) | 3.1 | 1,273.8 | | Lease liabilities | 83.8 | (19.8) | 8.8 | - | - | 72.8 | | Interest rate swaps | (56.0) | - | - | 0.4 | 2.2 | (53.4) | | Total liabilities from financing activities | 1,109.4 | 173.4 | 8.8 | (3.7) | 5.3 | 1,293.2 | | Company | | | | | | | | Borrowings | 468.6 | 800.0 | - | 0.2 | (5.1) | 1,263.7 | | Interest rate swaps | (56.0) | - | - | 0.4 | 2.2 | (53.4) | | Total liabilities from financing activities | 412.5 | 800.0 | - | 0.6 | (2.9) | 1,210.3 | 2023 | Group | At 1 January 2023 | Financing cash flows | Interest expense | Fair value adjustments | Other changes | At 31 December 2023 | | --- | --- | --- | --- | --- | --- | --- | | Borrowings | 1,265.9 | (182.5) | - | (4.3) | 2.5 | 1,081.6 | | Lease liabilities | 92.3 | (16.2) | 7.7 | - | - | 83.8 | | Interest rate swaps | (73.2) | - | - | 17.2 | - | (56.0) | | Total liabilities from financing activities | 1,285.0 | (198.7) | 7.7 | 12.9 | 2.5 | 1,109.4 | | Company | | | | | | | | Borrowings | 649.6 | (182.5) | - | 0.8 | 0.8 | 468.7 | | Interest rate swaps | (73.2) | - | - | 17.2 | - | (56.0) | | Total liabilities from financing activities | 576.4 | (182.5) | - | 18.0 | 0.8 | 412.7 | THE UNITE GROUP PLC Annual Report and Accounts 2024 187 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 4.2 Interest rate swaps The Group uses interest rate swaps to manage the Group's exposure to interest rate fluctuations. In accordance with the Group's Treasury Policy, the Group does not hold or issue interest rate swaps for trading purposes. The derivatives of the Company are the same as those of the Group, and the hedge accounting disclosures in note 4.5a are also relevant for the Company. ### Accounting policies Interest rate swaps are recognised initially and subsequently at fair value, with mark to market movements recognised in the income statement unless cash flow hedge accounting is applied. The Group designates certain interest rate derivatives as hedging instruments. The interest rate swap is designated as the hedging instrument in a hedge of the variability in cash flows attributable to the interest risk of borrowings. At inception, the Group documents the relationship between the hedging instrument and the hedged item, along with the risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements: - There is an economic relationship between the hedged item and the hedging instrument - The effect of credit risk does not dominate the value changes that result from that economic relationship - The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. The effective portion of changes in fair value of the interest rate swap is recognised in Other Comprehensive Income and presented under the heading of Hedging reserve in equity, limited to the cumulative change in fair value of the hedged item from inception of the hedge. Any ineffective portion of changes in the fair value of the interest rate swap is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised hedged item. If the Group expects that some or all of the loss accumulated in the hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss. The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria. This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in Other Comprehensive Income and accumulated in the hedging reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the hedging reserve is reclassified immediately to profit or loss. The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The following table shows the fair value of interest rate swaps which at 31 December 2024 are not designated in accounting hedge relationships: | | 2024 £m | 2023 £m | | --- | --- | --- | | Current | 7.4 | - | | Non-current | 46.0 | 56.0 | | Fair value of interest rate swaps | 53.4 | 56.0 | The fair value of interest rate swaps has been calculated by a third-party, discounting estimated future cash flows on the basis of market expectations of future interest rates, representing Level 2 in the IFRS 13 fair value hierarchy. At 31 December 2024, the fair value above comprises current assets of £7.4 million and non-current assets of £46.0 million (2023: non-current assets of £56.0 million). 188 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 4.3 Net financing costs/(gains) # Accounting policies Net financing costs comprise interest payable on borrowings and interest on lease liabilities, less interest receivable on funds invested (both calculated using the effective interest rate method) and gains and losses on hedging instruments that are recognised in the income statement. | | 2024 | 2023 | | --- | --- | --- | | Recognised in the income statement: | £m | £m | | Interest income | (16.7) | (1.3) | | Finance income | (16.7) | (1.3) | | Gross interest expense on loans | 39.0 | 32.5 | | Amortisation of fair value of debt recognised on acquisition | (4.1) | (4.3) | | Interest capitalised | (15.5) | (8.4) | | Loan interest and similar charges | 19.4 | 19.8 | | Interest on lease liabilities | 8.8 | 7.7 | | Mark to market changes in interest rate swaps | 0.4 | 17.2 | | Swap cancellation and loan break costs | 3.1 | - | | Finance costs | 31.7 | 44.7 | | Net financing costs | 15.0 | 43.4 | The average cost of the Group's wholly-owned debt at 31 December 2024 is $3.0\%$ (2023: $2.7\%$ ). The overall average cost of debt on an EPRA basis is $3.6\%$ (2023: $3.2\%$ ). # 4.4 Gearing LTV is a key indicator that the Group uses to manage its indebtedness. The Group also monitors gearing, which is calculated using EPRA net tangible assets (NTA) and adjusted net debt. Adjusted net debt excludes IFRS 16 lease liabilities, the unamortised fair value of debt recognised on acquisition and mark to market of interest rate swaps as shown below. The Group's gearing ratios are calculated as follows: | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Cash and cash equivalents | 5.1 | 274.3 | 37.5 | | Current borrowings | 4.1 | - | (299.4) | | Non-current borrowings | 4.1 | (1,273.8) | (782.2) | | Lease liabilities | 4.6a | (72.8) | (83.8) | | Interest rate swaps | 4.2 | 53.4 | 56.0 | | Net debt per balance sheet | | (1,018.9) | (1,071.9) | | Lease liabilities | 4.6a | 72.8 | 83.8 | | Unamortised fair value of debt recognised on acquisition | 2.3c | 11.1 | 15.2 | | Adjusted net debt | | (935.0) | (972.9) | | Reported net asset value | | 4,811.5 | 4,067.0 | | EPRA NTA | 2.3c | 4,758.4 | 4,014.7 | | Gearing | | | | | Basic (net debt/reported net asset value) | | 21% | 26% | | Adjusted gearing (adjusted net debt/EPRA NTA) | | 20% | 24% | | Loan to value | 2.3a | 24% | 28% | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 4.5 Financial risk factors The Group's activities expose it to a variety of financial risks: market risks (primarily interest rate risk), credit risk and liquidity risk. The Group's Treasury Policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. Details on credit risk can be found in note 5.3. ## 4.5a) Interest rate risk The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with defined risk appetite; ensuring the most cost-effective hedging strategies are applied. The Group's exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note. The Group holds its debt finance under both floating and fixed rate arrangements. The floating debt is hedged through the use of interest rate swap agreements. The Group's guideline has been to hedge 75%-95% of the Group's interest rate exposure for terms of approximately two to ten years. At 31 December 2024, 89% (2023:96% of the Group's borrowing was held at fixed rates, driven by lower borrowings as a result of the capital raise in July 2024. Excluding the £450 million (2023: £200 million) of swaps the fixed investment borrowing is at an average rate of 4.1% (2023: 3.1%) following the new bond issuance in June 2024 for an average period of 5.8 years (2023: 4.4 years), including all debt with current swaps the average rate is 3.3% (2023: 2.9%). Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates upon the issuance of forecast fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year. As the critical terms of the hedge contracts and their corresponding hedged items are the same, the Group performs a qualitative assessment of effectiveness and it is expected that the value of the interest rate swap contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying interest rates. The main source of hedge ineffectiveness in these hedge relationships has historically been the effect of the counterparty and the Group's own credit risk on the fair value of the hedge contracts, which is not reflected in the fair value of the hedged item attributable to the change in interest rates. No other sources of ineffectiveness emerged from these hedging relationships. However, changes in anticipated draw down of debt in 2022 as a result of planned property disposals have meant that the hedged items were no longer expected to occur. As a result the hedge relationships were discontinued from 1 July 2021 and the interest rate swaps are no longer designated as 'effective'. The fair value of these instruments is assets of £53.4 million (2023: £56.0 million) with £7.4 million maturing in 12 months (2023: £nil). The interest rate swaps settle on a monthly basis. The floating rate on the interest rate swaps is one-month SONIA (2023: one-month SONIA). The Group will settle the difference between the fixed and floating interest rate on a net basis. At the end of the current year and the previous year, the Group had no cash flow hedges in hedge relationships. The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments as at 31 December 2024. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the reporting date was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. If interest rates had been 1% higher and all other variables were held constant the Group's profit for the year ended. As the notional value of the interest rate swap contracts is greater than the amount of borrowing at variable rate, the Group is exposed to fluctuations in interest rates. If interest rates had been 1% higher and all other variables were held constant the Group's profit for the year ended 31 December 2024 would increase by £3.7 million (2023: £1.7 million). There would be with no impact directly recognised in the Statement of Changes in Equity. The Group's sensitivity to interest rates has remained reasonably consistent year-on-year. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 4.5b) Credit risk on financial instruments In order to minimise credit risk, the Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and investments in these instruments, where the counterparties have minimum A- credit rating, are considered to have low credit risk for the purpose of impairment assessment. The credit rating information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information including CDS prices and its own trading records to rate its major customers. The Group's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties in line with Board Policy. Before accepting any new customer, the finance team uses external credit ratings to assess the potential customer's credit quality and defines credit limits by customer. Monitoring procedures are also in place to ensure that follow-up action is taken when ratings deteriorate. The Group does not hold any credit enhancements to cover its credit risks associated with its financial assets. The Group considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable: - When there is a breach of financial covenants by the debtor - Information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full (without taking into account collateral held by the Group). Details of the credit quality of the Group's financial assets as well as the Group's maximum exposure to credit risk by credit risk rating grades are set out in note 5.3. # 4.5c) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group's short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk are set out below. For development activities, the Group has a policy of raising substantially the full amount of capital required for each development before commencing construction. The funding requirements of developments are therefore secured at the outset of works. The Group has the following financial instruments which impact the liquidity risk of the Group either now or in the future: - Financial assets including interest rate swaps, trade receivables, amounts due from joint ventures, other receivables and cash - Financial liabilities including borrowings, lease liabilities, interest rates swaps, trade payables, retentions on construction contracts for properties, other payables and accrued expenses. The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. 2024 | | Weighted average effective interest rate % | Less than 1 month £m | 1-3 months £m | 3 months - 1 year £m | 1-5 years £m | 5+ years £m | Total £m | Carrying amount £m | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Variable interest rate instruments | 6.2% | 0.8 | 1.5 | 6.9 | 170.8 | - | 180.0 | 149.4 | | Fixed interest rate instruments | 4.4% | 1.9 | 3.9 | 44.0 | 458.5 | 783.4 | 1,291.7 | 1,124.4 | | Lease liabilities | 4.2% | 1.0 | 2.9 | 7.9 | 48.5 | 48.8 | 109.1 | 72.8 | | Trade and other payables | n/a | - | 177.0 | - | - | - | 177.0 | 177.0 | | Total | | 3.7 | 185.3 | 58.8 | 677.8 | 832.2 | 1,757.8 | 1,523.6 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued 2023 | | Weighted average effective interest rate | Less than 1 month | 1-3 months | 3 months - 1 year | 1-5 years | 5+ years | Total | Carrying amount | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | % | £m | £m | £m | £m | £m | £m | £m | | Variable interest rate instruments | 7.0% | 0.3 | 0.6 | 2.6 | 57.9 | - | 61.5 | 46.5 | | Fixed interest rate instruments | 3.1% | 1.1 | 2.2 | 28.8 | 399.4 | 766.2 | 1,197.7 | 1,036.9 | | Lease liabilities | 4.2% | 1.1 | 2.3 | 10.2 | 54.5 | 66.8 | 134.9 | 83.8 | | Trade and other payables | n/a | - | 134.0 | - | - | - | 134.0 | 134.3 | | Total | | 2.5 | 139.1 | 41.6 | 511.8 | 833.0 | 2,361.1 | 1,302.2 | The Company has £180.0m (2023: £61.5m) of variable rate borrowings with a weighted average rate of 6.2% and £1,291.7m of fixed rate borrowings with a weighted average rate of 4.4% (2023: 3.1%). The maturity of the Company's borrowings is disclosed in note 4.1. The Group has access to financing facilities as described below, of which £610.0 million were unused at the reporting date (2023: £560.0 million). The Group expects to meet its other obligations from operating cash flows. ## 4.5c) Liquidity risk continued | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | Unsecured bank overdraft facility, reviewed annually and payable at call: | | | | - amount used | - | - | | - amount unused | 10.0 | 10.0 | | Unsecured committed bank loan facilities which may be extended by mutual agreement: | | | | - amount used | 150.0 | 50.0 | | - amount unused | 750.0 | 550.0 | | | 900.0 | 600.0 | ## 4.5d) Covenant compliance The Group monitors its covenant position and the forecast headroom available on a monthly basis. At 31 December 2024, the Group was in full compliance with all of its borrowing covenants. The Group's unsecured borrowings carry several covenants. The covenant regime is IFRS based and gives the Group substantial operational flexibility, allowing property acquisitions, disposals and developments to occur with relative freedom. | | 2024 | | 2023 | | | --- | --- | --- | --- | --- | | | Covenant | Actual | Covenant | Actual | | Gearing | <1.50 | 0.21 | <1.5 | 0.27 | | Unencumbered assets ratio | >1.70 | 4.48 | >1.7 | 3.71 | | Secured gearing | <0.25 | - | <0.25 | - | | Development assets ratio | <30% | 8% | <30% | 3% | | Joint venture ratio | <55% | 22% | <55% | 23% | | Interest cover | >2.00 | 81.56 | >2.00 | 8.23 | The Liberty Living Finance PLC bond issuer substitution to Unite Group PLC was completed in December 2024 bringing the £300m 2029 bond under The Unite Group PLC. 192 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 4.6 Leases # 4.6a) Lease liabilities # Accounting policies The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset (see note 3.1a) and a corresponding lease liability with respect to all lease arrangements in which it is the lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the Group's incremental borrowing rate (since the rate implicit in the leases cannot be readily determined) of $4.17\%$ . The lease liability is presented as a separate line in the consolidated balance sheet. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability whenever: - The lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate - The lease payments change due to changes in an index, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used) - A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The Group did not make any such adjustments during the period presented. | Lease liabilities | Undiscounted cash flows | | Carrying value | | | --- | --- | --- | --- | --- | | | 2024 £m | 2023 £m | 2024 £m | 2023 £m | | Analysed as: | | | | | | Non-current | 97.3 | 121.3 | 66.8 | 78.4 | | Current | 11.8 | 13.6 | 6.0 | 5.4 | | Total lease liability | 109.1 | 134.9 | 72.8 | 83.8 | | Lease liability maturity analysis | | | | | | Year 1 | 11.8 | 13.6 | 6.0 | 5.4 | | Year 2 | 12.2 | 13.5 | 6.6 | 7.4 | | Year 3 | 12.0 | 13.7 | 6.9 | 7.9 | | Year 4 | 12.2 | 13.5 | 7.7 | 8.8 | | Year 5 | 12.1 | 13.8 | 8.1 | 8.8 | | Onwards | 48.8 | 66.8 | 37.5 | 45.5 | | Total | 109.1 | 134.9 | 72.8 | 83.8 | The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group's treasury function. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 4.6b) Lease receivables The Group accounts for its tenancy contracts offered to commercial and individual tenants as operating leases. Operating lease contracts with universities contain RPI uplifts and market review clauses. The lessee does not have an option to purchase the property at the expiry of the lease period. ### Maturity analysis of operating lease receivables The future minimum lease payments receivable under non-cancellable operating leases are as follows: | | 2024 £m | 2023 £m | | --- | --- | --- | | Year 1 | 254.0 | 236.8 | | Year 2 | 155.0 | 129.5 | | Year 3 | 106.4 | 83.8 | | Year 4 | 87.3 | 71.9 | | Year 5 | 73.9 | 60.4 | | Onwards | 270.2 | 273.6 | | Total | 946.8 | 856.0 | ## 4.7 Capital management The capital structure of the Group consists of shareholders' equity and adjusted net debt, including cash held on deposit. The Group's equity is analysed into its various components in the Statement of Changes in Equity. The components and calculation of adjusted net debt is set out in note 4.4. Capital is managed so as to continue as a going concern and to promote the long-term success of the business and to maintain sustainable returns for shareholders and joint venture partners. The Group uses a number of key metrics to manage its capital structure: - Net debt (note 4.4) - Gearing (note 4.4) - LTV (note 2.3a) - Weighted average cost of investment debt (note 4.5a) - Interest cover (note 4.5d). In order to manage levels of adjusted gearing over the medium term, the Group seeks to deliver NAV growth and to recycle capital invested in lower performing assets to fund new investment. Three property assets were sold in 2024. The Group only commits to development schemes where there is a meaningful spread between development yields and funding costs. The Group does not commit to developing new sites until sufficient funding is secured to fulfill the cost of the development in full. The Board monitors the ability of the Group to pay dividends out of available cash and distributable profits. Based on the assumption that no shareholders take up the final scrip dividend, the full year will be covered by operating cash flows. The full year dividend is expected to be £182.1 million compared to operating cash flow of £216.4 million. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 4.8 Equity # Accounting policies Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares, other than on a business combination, are shown as a deduction, net of tax, in equity from the proceeds. Share issue costs incurred directly in connection with a business combination are deducted from the proceeds of the issue. The Company's issued share capital has increased during the year as follows: | Called up, allotted and fully paid ordinary shares of £0.25p each | 2024 | | | 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | No. of shares | Ordinary shares £m | Share Premium £m | No. of shares | Ordinary shares £m | Share Premium £m | | At 1 January | 435,854,542 | 109.4 | 2,447.6 | 400,317,225 | 100.1 | 2,162.0 | | Shares issued (capital raise) | 50,000,000 | 12.1 | 430.1 | 33,149,172 | 8.6 | 286.3 | | Shares issued (scrip dividend) | 2,808,461 | 0.7 | (0.7) | 2,232,001 | 0.6 | (0.6) | | Share options exercised | 129,071 | - | (0.1) | 156,144 | 0.1 | (0.1) | | At 31 December | 488,792,074 | 122.2 | 2,876.9 | 435,854,542 | 109.4 | 2,447.6 | The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company's residual assets. The Company's reserves are as follows: - Called-up share capital reserves contain the nominal value of the shares issued - Share premium reserves contain the excess consideration received above the nominal value of the shares issued - Merger reserves contain the excess in the value of shares issued by the Company in exchange for the value of shares acquired in respect of subsidiaries acquired (specifically on the acquisition of the Unilodge portfolio in June 2001) - Hedging reserves contain the cumulative gains and losses on hedging instruments deemed effective - Retained earnings contain the cumulative profits and losses of the Company net of dividends paid and other adjustments. # 4.9 Dividends # Accounting policies Dividends are recognised through equity on the earlier of their approval by the Company's shareholders or their payment. During the year, the Company paid the final 2023 dividend of £64.0 million - 23.6p per share - and an interim 2024 dividend of £52.0 million - 12.4p per share (2023: final 2022 dividend 21.7p and an interim dividend 11.8p). After the year-end, the Directors proposed a final dividend per share of 24.9p (2023: 23.6p), bringing the total dividend per share for the year to 37.3p (2023: 35.4p). No provision has been made in relation to this dividend. The Group has modelled tax adjusted property business profits for 2024 and 2025 and the PID requirement in respect of the year ended 31 December 2024 is expected to be satisfied by the end of 2025. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Section 5: Working capital > This section focuses on how the Group generates its operating cash flows. Careful management of working capital is vital to ensure that the Group can meet its trading and financing obligations within its ordinary operating cycle. > > On the following pages you will find disclosures around the Group's cash position and how cash is generated from the Group's trading activities, and disclosures around trade receivables and payables. ### Accounting policies Cash and cash equivalents comprise cash balances and call deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. ## 5.1 Cash and cash equivalents The Group's cash position at 31 December 2024 was £274.3 million (2023: £37.5 million). Of this balance, £180m was cash equivalents money market deposits, £94.3 million was cash. The Group's cash balances include £1.1 million (2023: £1.1 million) whose use at the balance sheet date is restricted by funding agreements to pay operating costs. The Group generates cash from its operating activities as follows: | | | Group | | | --- | --- | --- | --- | | | Note | 2024 £m | 2023 £m | | Profit for the year | | 441.8 | 103.6 | | Adjustments for: | | | | | Depreciation and amortisation | 3.3 | 5.7 | 6.3 | | Fair value of share based payments | 6.1 | 2.4 | 3.4 | | Change in value of investment property (owned and under development) | 3.1 | (186.7) | 37.2 | | Change in value of investment property (leased) | 3.1 | 1.9 | 10.4 | | Net finance costs | 4.3 | 2.7 | 18.5 | | Interest payment for leased assets | | 8.8 | 7.7 | | Swap break and debt exit costs | | 3.1 | - | | Mark to market changes in interest rate swaps | | 0.3 | 17.2 | | Loss/(profit) on disposal of investment property | | 9.8 | (11.8) | | Share of joint venture profit | 3.4b | (115.9) | (27.0) | | Trading with joint venture adjustment | 3.4b | 4.6 | 4.5 | | Tax charge/(credit) | 2.5a | 2.1 | (1.1) | | Cash flows from operating activities before changes in working capital | | 180.6 | 168.8 | | Decrease/(increase) in trade and other receivables | | (12.0) | (24.8) | | (Increase)/decrease in inventories | | (5.3) | (13.5) | | Increase/(decrease) in trade and other payables | | 48.2 | 24.4 | | Cash flows from operating activities | | 211.5 | 155.0 | | Tax paid/ (received) | | 4.9 | (1.8) | | Net cash flows from operating activities | | 216.4 | 153.2 | Cash flows consist of the following segmental cash inflows/(outflows): Operations £210.4 million (2023: £178.0 million), Property (£249.6 million) (2023: (£354.0 million)) and Unallocated £276.0 million (2023: £175.5 million). The Unallocated amount includes a net cash outflow of dividends paid of £137.8 million (2023: £117.3 million) and a cash inflow of £442.0 million (net of fees) as a result of the capital raise in July 2024 (2023: £295.0 million). 196 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # 5.2 Trade and other receivables ## Accounting policies On the basis that trade receivables meet the business model and cash flow characteristics tests, they are initially recognised at transaction price and then subsequently measured at amortised cost. The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to whether the tenant is a commercial organisation (including universities) or an individual student. The expected loss rates are based on the payment profile for sales by academic year as well as the corresponding historical credit losses during the period. The historical rates are adjusted to reflect any current and forward-looking macroeconomic factors affecting the customer's ability to settle the amount outstanding, however given the short period exposed to credit risk, the impact of macroeconomic factors has not been considered significant within the reporting period. Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to make payments within a reasonable period from the invoice date and failure to engage with the Group on alternative payment arrangements, amongst others, are considered indicators of no reasonable expectation of recovery. Other financial asset balances are assessed for expected credit losses based on the underlying nature of the asset, including maturity and age of the asset such as whether a longer-term asset or a short-term working capital balance is subject to regular settlement arrangements, using the 12-month ECL model. No credit losses have been recognised in respect of these balances. Financial assets written off may still be subject to enforcement activities under the Group's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss. The Company's impairment policies in relation to financial assets are consistent with those of the Group, with additional consideration given to loans to Group undertakings. In this respect, the Company recognises lifetime ECL when there has been a significant increase in credit risk (such as changes to credit ratings) since initial recognition. However, if the credit risk on the loans have not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. The Company expects that the loans to Group undertakings will be repaid in full at maturity or when called. If the Group undertakings were unable to repay loan balances, the Company expects that in such circumstances the counterparty would negotiate extended credit terms with the Company. As such, the expected credit loss is considered immaterial. No change in credit risk is deemed to have occurred since initial recognition and therefore a 12-month expected credit loss has been calculated based on the assessed probability of default. Trade and other receivables can be analysed as follows: | | Note | Group | | Company | | | --- | --- | --- | --- | --- | --- | | | | 2024 £m | 2023 £m | 2024 £m | 2023 £m | | Trade receivables | | 37.5 | 34.8 | - | - | | Amounts owed by joint ventures | | 56.7 | 49.4 | - | - | | Prepayments and accrued income | | 16.2 | 14.8 | - | - | | Other receivables | | 34.2 | 33.8 | - | - | | Trade and other receivables | | 144.6 | 132.8 | - | - | | Loans to Group undertakings (non-current) | 5.6 | - | - | 3,416.1 | 2,130.0 | | Trade and other receivables (non-current) | | - | - | 3,416.1 | 2,130.0 | The Group offers tenancy contracts to commercial (universities and retail unit tenants) and individual tenants based on the academic year. The Group monitors and manages the recoverability of its receivables based on the academic year to which the amounts relate. Rental income is payable immediately, therefore all receivables relating to tenants are past the payment due date. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 5.2 Trade and other receivables continued We do not anticipate there to be any expected credit loss on amounts receivable from joint ventures as these remain profitable. Details of amounts due from Group undertakings to the Company are disclosed in note 5.6. | 2024 | Ageing by academic year | | | | | --- | --- | --- | --- | --- | | | Total | 2024/25 | 2023/24 | Prior years | | | £m | £m | £m | £m | | Rental debtors | | | | | | Commercial tenants (past due and impaired) | 1.5 | 0.5 | 0.6 | 0.4 | | Individual tenants (past due and impaired) | 47.3 | 39.9 | 2.8 | 4.6 | | Expected credit loss carried | (11.3) | (2.9) | (3.4) | (5.0) | | Trade receivables | 37.5 | 37.5 | - | - | | 2023 | Ageing by academic year | | | | | --- | --- | --- | --- | --- | | | Total | 2023/24 | 2022/23 | Prior years | | | £m | £m | £m | £m | | Rental debtors | | | | | | Commercial tenants (past due and impaired) | 1.8 | 0.6 | 0.5 | 0.7 | | Individual tenants (past due and impaired) | 51.4 | 39.5 | 3.7 | 8.2 | | Expected credit loss carried | (18.4) | (5.3) | (4.2) | (8.9) | | Trade receivables | 34.8 | 34.8 | - | - | Included within trade receivables is £20.3 million of receivables relating to joint venture debtors (2023: £16 million). Movements in the Group's expected credit losses of trade receivables can be shown as follows: | | 2024 | 2023 | | --- | --- | --- | | | £m | £m | | At 1 January | 18.4 | 15.6 | | Expected credit loss charged to income statement in year | 0.9 | 3.0 | | Receivables written off during the year (utilisation of expected credit loss) | (8.0) | (0.2) | | At 31 December | 11.3 | 18.4 | The loss allowance for trade receivables is estimated as an amount equal to the lifetime expected credit loss (ECL). This loss has been estimated using the Group's history of loss for similar assets and takes into account current and forecast conditions. The impact of credit losses is not considered significant in respect of the financial statements. ## 5.3 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It arises principally from the Group's cash balances, the Group's receivables from customers and joint ventures and loans provided to the Group's joint ventures. At the year-end, the Group's maximum exposure to credit risk was as follows: | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | Cash | 5.1 | 274.3 | 37.5 | | Trade receivables | 5.2 | 37.5 | 34.8 | | Amounts due from joint ventures (excluding loans that are capital in nature) | 5.2 | 56.7 | 49.4 | | | | 368.5 | 121.7 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- 5.3a) Cash The Group operates investment guidelines with respect to surplus cash. Counterparty limits for cash deposits are largely based upon long-term ratings published by credit rating agencies and credit default swap rates. Deposits are placed with financial institutions with A- or better credit ratings. 5.3b) Trade receivables The Group's customers can be split into two groups – (i) students (individuals) and (ii) commercial organisations including universities. The Group's exposure to credit risk is influenced by the characteristics of each customer. 5.3c) Joint ventures Amounts receivable from joint ventures fall into two categories – working capital balances and investment loans. The Group has strong working relationships with its joint venture partners, and the joint ventures themselves have strong financial performance, retain net asset positions and are cash generative, and therefore the Group views this as a low credit risk balance. No impairment has therefore been recognised in 2024 or 2023. 5.4 Trade and other payables Accounting policies Trade payables are initially recognised at the value of the invoice received from a supplier (fair value) and subsequently at amortised cost. The carrying value of trade payables is considered approximate to fair value. Group amounts are payable on demand. Trade and other payables due within one year can be analysed as follows: | | Group | | Company | | | --- | --- | --- | --- | --- | | | 2024 | 2023 | 2024 | 2023 | | | £m | £m | £m | £m | | Trade payables | 73.7 | 42.3 | - | - | | Retentions on construction contracts for properties | 8.1 | 6.3 | - | - | | Amounts due to Group undertakings | - | - | 102.1 | 66.7 | | Other payables and accrued expenses | 95.3 | 85.4 | 24.8 | 9.1 | | Deferred income | 78.4 | 73.8 | - | - | | Trade and other payables | 255.5 | 207.8 | 126.9 | 75.8 | Included within other payables and accrued expenses is £19.4 million of capital expenditure accruals (2023: £19.1 million). Deferred income relates to rental income that has been collected in advance of it being recognised as income and includes £41.1 million of income relating to joint ventures (2023: £38.4 million). 5.5 Provisions Accounting policies Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation and are discounted to present value where the effect is material. The Group continues to carry out replacement works for properties with HPL cladding and those where there is a legal obligation to do so, with activity prioritised according to risk assessments. The remaining cost of the works is expected to be £5.6 million (Unite share: £5.3 million), of which £5.1 million is in respect of wholly-owned properties. Whilst the overall timetable for these works is uncertain, management anticipate this will be incurred over the next 12-24 months. THE UNITE GROUP PLC Annual Report and Accounts 2024 199 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 5.5 Provisions continued The Government's Building Safety Bill, covering building standards, was passed in April 2022 and has introduced more stringent fire safety regulations. The Group will ensure it remains aligned to fire safety regulations as they evolve and continue to make any required investment to ensure its buildings remain safe to occupy. The Group has provided for the costs of remedial work where there is a legal obligation to do so. The amounts provided reflect the current best estimate of the extent and future cost of the remedial works required and are based on known costs and quotations where possible, and reflect the most likely outcome. However, these estimates may be updated as work progresses or if government legislation and regulation changes. The regulations continue to evolve in this area and Unite Group will ensure that its buildings are safe for occupation and compliant with laws and regulations. The Group has not recognised any assets in respect of future claims, but expect to recover 50–75% of remediation costs through claims from contractors. The Group has recognised provisions for the cost of these cladding works as follows: | | Gross £m | | | | Unite Group Share £m | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Wholly-owned | USAF | LSAV | Total | Wholly-owned | USAF | LSAV | Total | | At 31 December 2022 | 29.5 | 55.6 | 28.2 | 113.3 | 29.5 | 15.6 | 14.1 | 59.2 | | Adjustment due to re-estimates | (3.6) | (3.3) | - | (6.9) | (3.6) | (0.9) | - | (4.5) | | Additions | 21.3 | 51.5 | 22.2 | 95.0 | 21.3 | 14.5 | 11.1 | 46.9 | | Utilisation | (21.8) | (49.7) | (6.9) | (78.4) | (21.8) | (14.0) | (3.5) | (39.3) | | Transferred to valuations | (20.2) | (48.2) | (12.3) | (80.7) | (20.2) | (13.6) | (6.2) | (40.0) | | At 31 December 2023 | 5.2 | 5.9 | 31.2 | 42.3 | 5.2 | 1.6 | 15.5 | 22.3 | | Adjustment due to re-estimates | (0.1) | (2.0) | - | (2.1) | (0.1) | (0.6) | - | (0.7) | | Additions | - | - | - | - | - | - | - | - | | Utilisation | - | (3.4) | (4.6) | (8.0) | - | (0.9) | (2.2) | (3.1) | | Transferred to valuations | - | - | (26.6) | (26.6) | - | - | (13.3) | (13.3) | | At 31 December 2024 | 5.1 | 0.5 | - | 5.6 | 5.1 | 0.1 | - | 5.2 | ## 5.6 Transactions with other Group companies The Company was charged by Unite Integrated Solutions plc for corporate costs of £5.0 million (2023: £4.8 million). As a result of these intercompany transactions, the following amounts were due from/to the Company's subsidiaries at the year-end. | | 2024 £m | 2023 £m | | --- | --- | --- | | Unite Holdings Limited | 121.9 | 126.6 | | LDC (Holdings) Limited | 1,658.0 | 1,112.0 | | Liberty Living Group | 1,509.2 | 891.4 | | LDC (Portfolio) Ltd | 127.0 | - | | Amounts due from Group undertakings | 3,416.1 | 2,130.0 | | Unite Integrated Solutions plc | 102.1 | 62.0 | | Amounts due to Group undertakings | 102.1 | 62.0 | The Parent Company has received management fees from its joint ventures, which are disclosed in note 3.4c. The Company ensures the recoverability of intercompany receivable balances at the balance sheet date by ensuring that the counterparties have sufficient net assets to settle the balance outstanding. 200 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Section 6: Key management and employee benefits The Group's greatest resource is its staff and it works hard to develop and retain its people. The remuneration policies in place are aimed to help recognise the contribution that Unite Group's people make to the performance of the Group. On the following pages you will find disclosures around wages and salaries and share option schemes which allow employees of the Group to take an equity interest in the Group. ## Accounting policies The Group operates a defined contribution pension scheme. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. ## 6.1 Staff numbers and costs With the exception of the Directors, who are employed by Unite Group PLC, all employees are employed by subsidiaries of the Group. The employee costs of Unite Group PLC are borne by another Group company. The average number of persons employed by the Group (including Directors) during the year (calculated on a monthly basis), analysed by category, was as follows: | | Number of employees | | | --- | --- | --- | | | 2024 | 2023 | | Managerial and administrative | 617 | 580 | | Site operatives | 1,291 | 1,241 | | | 1,908 | 1,821 | The aggregate payroll costs of these persons were as follows: | | 2024 £m | 2023 £m | | --- | --- | --- | | Wages and salaries | 79.6 | 72.1 | | Social security costs | 7.9 | 6.8 | | Pension costs | 3.8 | 3.3 | | Fair value of share-based payments | 2.4 | 3.4 | | | 93.7 | 85.6 | The wages and salaries costs include redundancy costs of £0.5 million (2023: £0.2 million) and costs due to senior leadership changes of £nil million (2023: £2.9 million). The total number of persons employed by the Group (including Directors) and Company as at 31 December 2024 was 625 managerial and administrative and 1,281 site operatives. ## 6.2 Key management personnel The remuneration of the Directors, including Non-Executive Directors, who are the key management personnel of the Group and Company, is set out below in aggregate for each of the applicable categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the audited part of the Directors' Remuneration Report on page 128 which covers the requirements of schedule 5 of the relevant legislation. | | 2024 £m | 2023 £m | | --- | --- | --- | | Short-term employee benefits | 2.7 | 2.4 | | Post employment benefits | 0.1 | 0.1 | | Share-based payment benefits | 0.5 | 1.2 | | | 3.3 | 3.7 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## 6.3 Share-based compensation A transaction is classified as a share-based transaction where the Group receives services from employees and pays for these in shares or similar equity instruments. The Group operates a number of share-based compensation schemes allowing employees to acquire shares in the Company. ## 6.3a) Share schemes The Group operates the following schemes: Long-term incentive plan (LTIP), comprising the: - Performance Share Plan (PSP); and - HMRC Approved Employee Share Option Scheme (ESOS) Save As You Earn Scheme (SAYE) Details can be found in the Directors' Remuneration Report Open to employees, vesting periods of three years, service condition ## 6.3b) Outstanding share options The table below summarises the movements in the number of share options outstanding for the Group and their average exercise price: | | Weighted average exercise price 2024 | Number of options (thousands) 2024 | Weighted average exercise price 2023 | Number of options (thousands) 2023 | | --- | --- | --- | --- | --- | | Outstanding at 1 January | £2.49 | 1,942 | £0.19 | 2,083 | | Forfeited during the year | £5.15 | (170) | £2.01 | (765) | | Exercised during the year | £1.20 | (201) | £4.91 | (176) | | Granted during the year | £2.84 | 810 | £2.95 | 800 | | Outstanding at 31 December | £2.53 | 2,381 | £0.18 | 1,942 | | Exercisable at 31 December | £9.65 | 84 | £5.80 | 78 | For those options exercised in the year, the average share price during 2024 was £9.35 (2023: £9.40). For those options still outstanding, the range of exercise prices at the year-end was 0p to 1,121p (2023: 0p to 1,121p) and the weighted average remaining contractual life of these options was 3.9 years (2023: 2.9 years). The Group funds the purchase of its own shares by the Employee Share Ownership Trust to meet the obligations of the LTIP and executive bonus scheme. The purchases are shown as Own shares acquired in retained earnings. As at 31 December 2024, the number of shares held by the ESOT was 203,898 (2023: 209,954). The accounting is in accordance with the relevant standards. No further information is given as the amounts for share-based payments are immaterial. ## Section 7: Post balance sheet events The Group has reviewed events up to 25 February 2025 and have determined that no material post balance sheet events have occurred. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # Section 8: Alternative performance measures The Group uses alternative performance measures (APMs), which are not defined or specified under IFRS. These APMs, which are not considered to be a substitute for IFRS measures, provide additional helpful information. APMs are consistent with how business performance is planned, reported and assessed internally by management and the Board. The APMs below have been calculated on a see through/Unite Group share basis, as referenced to the notes to the financial statements. Reconciliations to equivalent IFRS measures are included in notes 2.2b and 2.2c. Definitions can also be found in the glossary. Adjusted earnings of the Group excludes the non-recurring impact of one-off transactions, improving comparability between reporting periods. Non-EPRA measures may not have comparable calculation bases between companies and therefore may not provide meaningful industry-wide comparability. | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | EBIT | | | | | Net operating income (NOI) | 2.2a | 276.1 | 256.5 | | Management fees | 2.2a | 17.3 | 16.9 | | Overheads | 2.2a | (22.5) | (22.1) | | | | 270.9 | 251.3 | | EBIT margin % | | | | | Rental income | 2.2a | 398.0 | 369.5 | | EBIT | 8 | 270.9 | 251.3 | | | | 68.1% | 68.0% | | EBITDA | | | | | Net operating income | 2.2a | 276.1 | 256.5 | | Management fees | 2.2a | 17.3 | 16.9 | | Overheads | 2.2a | (22.5) | (22.1) | | Depreciation and amortisation | 3.3 | 5.7 | 6.3 | | | | 276.6 | 257.6 | | Net debt | | | | | Cash | 2.3a | 364.7 | 77.2 | | Debt | 2.3a | (1,874.8) | (1,648.1) | | | | (1,510.1) | (1,570.9) | | EBITDA : Net debt | | | | | EBITDA | 8 | 276.6 | 257.6 | | Net debt | 8 | (1,510.1) | (1,570.9) | | Ratio | | 5.5 | 6.1 | | Interest cover (Unite Group share) | | | | | EBIT | 8 | 270.9 | 251.3 | | Net financing costs | 2.2a | (35.2) | (47.4) | | Interest on lease liabilities | 2.2a | (8.8) | (7.7) | | Total interest | | (43.9) | (55.1) | | Ratio | | 6.2 | 4.6 | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued Reconciliation: IFRS profit before tax to EPRA earnings and adjusted earnings | | Note | 2024 £m | 2023 £m | | --- | --- | --- | --- | | IFRS profit before tax | | 444.0 | 102.5 | | Net valuation (gains) on investment property | 2.2b | (253.7) | 59.1 | | Property disposals | 2.2b | 12.2 | (8.3) | | Net valuation losses on investment property (leased) | 2.2b | 1.9 | 10.4 | | Amortisation of fair value of debt recognised on acquisition | 2.2b | (4.1) | (4.3) | | Changes in valuation of interest rate swaps | 2.2b | 0.4 | 17.2 | | Swap cancellation and debt exit fees | 2.2b | 3.1 | - | | Non-controlling interest, tax and other items | | (1.9) | (0.4) | | EPRA earnings | | 201.9 | 176.1 | | Software as a service costs | | 11.9 | 8.2 | | Adjusted earnings | | 213.8 | 184.3 | Adjusted EPS yield | | 2024 | 2023 | | --- | --- | --- | | Adjusted earnings per share (A) | 46.6p | 44.3p | | EPRA NTA 1 January (B) | 920p | 927p | | Adjusted EPS yield (A/B) | 5.1% | 4.8% | Total accounting return | | 2024 | 2023 | | --- | --- | --- | | Opening EPRA NTA (A) | 920p | 927p | | Closing EPRA NTA | 972p | 920p | | Movement in EPRA NTA | 52p | (7p) | | 2023 final dividend | 23.6p | 21.7p | | 2024 interim dividend | 12.4p | 11.8p | | Total Movement in NTA (B) | 88.0p | 25.9p | | Total Accounting Return - % (B)/(A) | 9.6% | 2.9% | EPRA performance measures | | 2024 £m | 2023 £m | 2024 pps | 2023 pps | | --- | --- | --- | --- | --- | | EPRA earnings | 201.9 | 176.1 | 44.0 | 42.4 | | Adjusted earnings* | 213.8 | 184.3 | 46.6 | 44.3 | | EPRA NTA | 4,758.4 | 4,014.7 | 972 | 920 | | EPRA NRV | 5,236.2 | 4,330.7 | 1,069 | 992 | | EPRA NDV | 4,853.3 | 4,116.0 | 994 | 943 | | EPRA net initial yield | | | 4.8% | 4.8% | | EPRA topped up net initial yield | | | 4.8% | 4.8% | | EPRA like-for-like gross rental income | | | 2.6% | 2.6% | | EPRA vacancy rate | | | 2.0% | 0.3% | | EPRA cost ratio (including vacancy costs) | | | 35.2% | 35.2% | | EPRA cost ratio (excluding vacancy costs) | | | 34.9% | 34.9% | * Adjusted earnings calculated as EPRA earnings less software as a service and abortive costs. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- EPRA like-for-like rental income (calculated based on total portfolio value of £9.1 billion) | | Like-for-like properties | Development property | Other Properties* | Total EPRA Earnings | | --- | --- | --- | --- | --- | | 2024 | | | | | | Rental income | 345.7 | 6.8 | 45.5 | 398.0 | | Property operating expenses | (106.4) | (2.1) | (13.4) | (121.9) | | Net rental income | 239.3 | 4.7 | 32.1 | 276.1 | | 2023 | | | | | | Rental income | 321.5 | 2.0 | 46.0 | 369.5 | | Property operating expenses | (100.0) | (0.4) | (12.6) | (113.0) | | Net rental income | 221.5 | 1.6 | 33.4 | 256.5 | | Like-for-like net rental income £m | 18.0 | | | | | Like-for-like net rental income % | 8.0% | | | | | Like-for-like gross rental income £m | 24.2 | | | | | Like-for-like gross rental income % | 7.5% | | | | * Other properties include acquisitions, disposals, major refurbishments and changes in ownership. EPRA vacancy rate | | 2024 £m | 2023 £m | | --- | --- | --- | | Estimated rental value of vacant space | 6.5 | 0.9 | | Estimated rental value of the whole portfolio | 320.3 | 283.9 | | EPRA vacancy rate | 2.0% | 0.3% | EPRA net initial yield | | 2024 | 2023 | | --- | --- | --- | | Net operating income (£m) | 305.5 | 278.3 | | Property market value (£m) | 5,948.2 | 5,510.4 | | Notional acquisition costs (£m) | 392.2 | 288.6 | | | 6,340.3 | 5,799.0 | | EPRA net initial yield (%)* | 4.8% | 4.8% | | Difference in projected versus historical GOI | 0.3% | 0.2% | | Unite net initial yield | 5.1% | 5.0% | * No lease incentives are provided by the Group and accordingly the Topped Up Net Initial Yield measure is also 4.8% (2023: 4.8%). THE UNITE GROUP PLC Annual Report and Accounts 2024 205 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued EPRA cost ratio | | 2024 £m | 2023 £m | | --- | --- | --- | | Property operating expenses | 87.2 | 79.8 | | Overheads* | 21.6 | 21.2 | | Development / pre contract | 3.8 | 2.7 | | Unallocated expenses | 8.8 | 8.8 | | | 121.4 | 112.5 | | Share of JV property operating expenses | 34.7 | 33.2 | | Share of JV operating expenses | 0.9 | 0.9 | | Share of JV unallocated expenses | 0.5 | 0.4 | | | 157.5 | 147.0 | | Less: Joint venture management fees | (17.3) | (16.9) | | Total costs (A) | 140.2 | 130.1 | | Group vacant property costs** | (0.9) | (0.8) | | Share of JV vacant property costs** | (0.3) | (0.3) | | Total costs excluding vacant property costs (B) | 138.9 | 129.0 | | Gross rental income | | | | Rental income | 282.0 | 259.2 | | Share of JV rental income | 116.0 | 110.3 | | Total gross rental income (C) | 398.0 | 369.5 | | Total EPRA cost ratio (including vacant property costs) (A)/(C) | 35.2% | 35.2% | | Total EPRA cost ratio (excluding vacant property costs) (B)/(C) | 34.9% | 34.9% | * Excludes software as a service cost net of deferred tax and abortive costs. ** Vacant property costs reflect the per bed share of operating expenses allocated to vacant beds. Unite Group's EBIT margin excludes non-operational expenses which are included within the EPRA cost ratio above. Unite Group capitalises costs in relation to staff costs and professional fees associated with property development activity. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- EPRA yield movement | | NOI yield | Yield movement (bps) | | | | --- | --- | --- | --- | --- | | | % | H1 | H2 | FY | | Wholly-owned | 5.2% | 8 | 7 | 15 | | USAF | 5.2% | (1) | 2 | 1 | | LSAV | 4.5% | - | 2 | 2 | | Rental properties (Group share) | 5.1% | 7 | 11 | 18 | Property-related capital expenditure | | 2024 | | | 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | Wholly owned | Share of JVs | Group share | Wholly owned | Share of JVs | Group share | | London | 13.0 | 18.5 | 31.5 | 4.3 | 20.5 | 24.8 | | Prime regional | 12.4 | 6.1 | 18.5 | 19.3 | 4.8 | 24.1 | | Major regional | 36.8 | 13.8 | 50.6 | 24.6 | 3.0 | 27.6 | | Provincial | 2.6 | 4.5 | 7.1 | 5.2 | 1.3 | 6.5 | | Total rental properties | 64.8 | 42.9 | 107.7 | 53.5 | 29.6 | 83.0 | | Acquisitions | 282.9 | 34.5 | 317.4 | 2.1 | - | 2.1 | | Developments | 263.7 | - | 263.7 | 58.8 | - | 58.8 | | Capitalised interest | 15.5 | - | 15.5 | 8.4 | - | 8.4 | | Total property related capex | 626.9 | 77.4 | 704.3 | 122.7 | 29.6 | 152.3 | EPRA loan to value | | 2024 £m | 2023 £m | | --- | --- | --- | | Investment property (owned) | 5,852.0 | 5,510.4 | | Investment property (under development) | 451.4 | 174.7 | | Intangibles | 10.4 | 9.3 | | Total property value and other eligible assets | 6,313.8 | 5,694.4 | | Cash at bank and in hand | 364.7 | 77.2 | | Borrowings | (1,874.8) | (1,648.1) | | Net other payables | (33.9) | (100.3) | | EPRA Net debt | (1,544.0) | (1,671.2) | | EPRA loan to value | 24.4% | 29.3% | THE UNITE GROUP PLC Annual Report and Accounts 2024 207 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued ## Section 9: Company subsidiaries and joint ventures In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries and equity accounted investments as at 31 December 2024 is disclosed below. Unless otherwise stated, the Group's ownership interest represents 100% of the ordinary shares, units or partnership capital held indirectly by Unite Group PLC. No subsidiary undertakings have been excluded from the consolidation. The Unite Foundation has a year-end of 30 September to facilitate academic year reporting. All other subsidiaries have a year-end of 31 December. Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL | Filbert Village GP Limited (06016554) (21.3%) | LDC (Hillhead) Limited (06176554)** | | --- | --- | | Filbert Village Student Accommodation Limited Partnership (29.1%) | LDC (Holdings) Limited (02625007)* | | LDC (180 Stratford) Limited (14254727)** | LDC (Imperial Wharf) Limited (04541678)** | | LDC (AIB Warehouse) Limited (04872419)** | LDC (International House) Limited (10131352)** | | LDC (Alscot Road) Limited (06176428)** | LDC (Kelham Island) Limited (05152229)** | | LDC (Brunel House) Limited (09760628)** | LDC (Leasehold A) Limited (04066933)** | | LDC (Camden Court Leasehold) Limited (05140620)** | LDC (Leasehold B) Limited (05978242)** | | LDC (Camden Court) Limited (05082671)** | LDC (Loughborough) Limited (04207522)** | | LDC (Capital Cities Nominee No.1) Limited (05347228) (50.%)** | LDC (Magnet Court Leasehold) Limited (05140255)** | | LDC (Capital Cities Nominee No.2) Limited (05359457) (50.%)** | LDC (Millennium View) Limited (09890375)** | | LDC (Capital Cities Nominee No.3) Limited (08792780) (50.%)** | LDC (MTF Portfolio) Limited (05530557)** | | LDC (Capital Cities Nominee No.4) Limited (08792688) (50.%)** | LDC (Nairn Street) GP1 Limited (07580262) (21.3%) | | LDC (Capital Cities) Limited (05347220) (50.%)** | LDC (Nairn Street) GP2 Limited (07580257) (21.3%) | | LDC (Causewayend) Limited (08895966)** | LDC (Nairn Street) GP3 Limited (07808933) | | LDC (Chantry Court Leasehold) Limited (05140258)** | LDC (Nairn Street) GP4 Limited (07808919) | | LDC (Chaucer House) Limited (09898020)** | LDC (Nairn Street) Holdings Limited (07579402)** | | LDC (Constitution Street) Limited (09210998)** | LDC (Nairn Street) Limited Partnership (29.1%) | | LDC (Construction Two) Limited (04847268)** | LDC (Nairn Street) Management Limited Partnership (29.1%) | | LDC (Euro Loan) Limited (06623603)** | LDC (New Wakefield Street) Limited (10436455)** | | LDC (Ferry Lane 2) GP1 Limited (07359448) (50.%)** | LDC (Newgate) Limited (08895869)** | | LDC (Ferry Lane 2) GP2 Limited (07359481) (50.%)** | LDC (Old Hospital) Limited (09702143)** | | LDC (Ferry Lane 2) GP3 Limited (07503842)** | LDC (Oxford Road Bournemouth) Limited (04407309)** | | LDC (Ferry Lane 2) GP4 Limited (07503913)** | LDC (Portfolio 100) Limited (07989369)** | | LDC (Ferry Lane 2) Holdings Limited (07504099) (50.%)** | LDC (Portfolio 20) Limited (08803996)** | | LDC (Ferry Lane 2) Limited Partnership (50.0%)** | LDC (Portfolio Five) Limited (06079581)** | | LDC (Ferry Lane 2) Management Limited Partnership (50.0%)** | LDC (Portfolio Four) Limited (04985603)** | | LDC (Finance) Limited (09760806)** | LDC (Portfolio One) Limited (03005262)** | | LDC (Greetham Street) Limited (08895825)** | LDC (Portfolio) Limited (08419375)** | | LDC (Gt Suffolk St) GP1 Limited (07274156)** | LDC (Project 110) Limited (05083580)** | | LDC (Gt Suffolk St) GP2 Limited (07274000)** | LDC (Project 111) Limited (05791650)** | | LDC (Gt Suffolk St) Holdings Limited (07353946)** | LDC (Radmarsh Road) Limited (05435290)** | | LDC (Gt Suffolk St) Limited Partnership** | LDC (Skelhorne) Limited (09898132)** | | LDC (Gt Suffolk St) Management GP1 Limited (07354719)** | LDC (Smithfield) Limited (03373096)** | | LDC (Gt Suffolk St) Management GP2 Limited (07354728)** | LDC (St Leonards) Limited (08895830)** | | LDC (Gt Suffolk St) Management Limited Partnership** | LDC (St Pancras Way) GP1 Limited (07359501)** | | LDC (Hampton Street) Limited (06415998)** | LDC (St Pancras Way) GP2 Limited (07359428)** | * Held directly by the Company. ** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s477 or s379A for the financial year ended 31 December 2024. 208 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL | LDC (St Pancras Way) GP3 Limited (07503268)** | Liberty Living Investments Nominee 3 Limited (10519085)** | | --- | --- | | LDC (St Pancras Way) GP4 Limited (07503251)** | Liberty Living Limited (04055891)** | | LDC (St Pancras Way) Holdings Limited (07360734)** | Liberty Living SpareCo Limited (04616115)** | | LDC (St Pancras Way) Limited Partnership** | Liberty Living UK Limited (06064187)** | | LDC (St Pancras Way) Management Limited Partnership** | Liberty Park (Bedford) Limited (BVI) ** | | LDC (St Vincent's) Limited (10218310)** | Liberty Park (Bristol) Limited (07615601)** | | LDC (Stratford) GP1 Limited (07547911) (50.%) | Liberty Park (US Bristol) Limited (07615619)** | | LDC (Stratford) GP2 Limited (07547994) (50.%) | Liberty Plaza (London) Limited (07745097)** | | LDC (Stratford) Limited Partnership (50.%)** | Liberty Plaza (Newcastle) Limited (BVI) ** | | LDC (Swindon NHS) Limited (04207502)** | Liberty Point (Coventry) Limited (04992358)** | | LDC (Tara House) Limited (09214177)** | Liberty Point (Manchester) Limited (04828083)** | | LDC (Thurso Street) GP1 Limited (07199022)** | Liberty Point Southampton (Block A) Limited (10314954)** | | LDC (Thurso Street) GP2 Limited (07198979)** | Liberty Prospect Point (Liverpool) Limited (04637570)** | | LDC (Thurso Street) GP3 Limited (07434001)** | Liberty Quay (Newcastle) Limited (05234174)** | | LDC (Thurso Street) GP4 Limited (07434133)** | Liberty Quay 2 (Newcastle) Limited (07376627)** | | LDC (Thurso Street) Limited Partnership** | Liberty Severn Point (Cardiff) Limited (04313995)** | | LDC (Thurso Street) Management Limited Partnership** | Liberty Village (Edinburgh) Limited (10323566)** | | LDC (Ventura) Limited (04444628)** | LL Midco 2 Limited (08998308)** | | LDC (Vernon Square) Limited (06444132)** | LSAV (Angel Lane) GP1 Limited (08593689) (50.%)** | | LDC (William Morris II) Limited (05999281)** | LSAV (Angel Lane) GP2 Limited (08593692) (50.%)** | | LDC Capital Cities Two (GP) Limited (08790742) (50.%)** | LSAV (Angel Lane) GP3 Limited (08646359)** | | Liberty Atlantic Point (Liverpool) Limited (03885187)** | LSAV (Angel Lane) GP4 Limited (08646929)** | | Liberty Heights (Manchester) Limited (07399622)** | LSAV (Angel Lane) Limited Partnership (50.%)** | | Liberty Living (HE) Holdings Ltd – Company Only (10977869)** | LSAV (Angel Lane) Management Limited Partnership (50.%)** | | Liberty Living (LH Manchester) Limited (07120141)** | LSAV (Arch View) GP1 Limited (13210709) (50.%) | | Liberty Living (Liberty AP) Limited (03633307)** | LSAV (Arch View) GP3 Limited (13210526)** | | Liberty Living (Liberty PP) Limited (03991475)** | LSAV (Arch View) LP (50.%)** | | Liberty Living (LP Bristol) Limited (07242607)** | LSAV (Arch View) Management LP (50.%)** | | Liberty Living (LP Coventry) Limited (04330729)** | LSAV (Arch View) Nominee 1 Limited (13210518) (50.%)** | | Liberty Living (LP Manchester) Limited (04314013)** | LSAV (Arch View) Nominee 3 Limited (13210553)** | | Liberty Living (LQ Newcastle) Limited (04302869)** | LSAV (Aston Student Village) GP1 Limited (10498478) (50.%) | | Liberty Living (LQ2 Newcastle) Limited (07298853)** | LSAV (Aston Student Village) GP2 Limited (10498481) (50.%) | | Liberty Living Finance PLC (10979349)** | LSAV (Aston Student Village) GP3 Limited (10498217)** | | Liberty Living Group Limited (Jersey)*/** | LSAV (Aston Student Village) GP4 Limited (10498484)** | | Liberty Living Investments 1 Limited Partnership** | LSAV (Aston Student Village) Limited Partnership (50.%) | | Liberty Living Investments 2 Limited Partnership** | LSAV (Aston Student Village) Management Limited Partnership (50.%) | | Liberty Living Investments 3 Limited Partnership** | LSAV (Drapery Plaza) GP1 Limited (13209904) (50.%) | | Liberty Living Investments GP1 Limited (09375866)** | LSAV (Drapery Plaza) GP3 Limited (13210206)** | | Liberty Living Investments GP2 Limited (09375868)** | LSAV (Drapery Plaza) LP (50.%)** | | Liberty Living Investments GP3 Limited (10518849)** | LSAV (Drapery Plaza) Management LP (50.%)** | | Liberty Living Investments II Holdco 2 Limited (09574059)** | LSAV (Drapery Plaza) Nominee 1 Limited (13209909) (50.%)** | | Liberty Living Investments II Holdco Limited (08929431)** | LSAV (Drapery Plaza) Nominee 3 Limited (13209979)** | | Liberty Living Investments II Limited (09680931)** | LSAV (GP) Limited (50.%) | | Liberty Living Investments Limited (09375870)** | LSAV (Holdings) Limited (50.%) | | Liberty Living Investments Nominee 1 Limited (09375846)** | LSAV (Jersey Manager) Limited** | | Liberty Living Investments Nominee 2 Limited (09375849)** | LSAV (No.1) GP1 Limited (13184531) (50.%)** | * Held directly by the Company. ** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s477 or s379A for the financial year ended 31 December 2024. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL | LSAV (No.1) GP3 Limited (13184662)** | UNITE Capital Cities Two GP3 Limited (16148993)** | | --- | --- | | LSAV (No.1) LP (50.%)** | Unite Capital Cities Two Limited Partnership (50.%) | | LSAV (No.1) Management LP (50.%)** | UNITE Construction (Angel Lane) Limited (08792704)** | | LSAV (No.1) Nominee 1 Limited (13184589) (50.%)** | UNITE Construction (Stapleton) Limited (09023406)** | | LSAV (No.1) Nominee 3 Limited (13184656)** | UNITE Construction (Wembley) Limited (09023474)** | | LSAV (Property Holdings) LP (50.%) | Unite Finance Limited (04353305)*/** | | LSAV (Stapleton) GP1 Limited (08593695) (50.%)** | Unite Finance One (Accommodation Services) Limited (04332937)** | | LSAV (Stapleton) GP2 Limited (08593699) (50.%)** | Unite Finance One (Holdings) Limited (04316207)** | | LSAV (Stapleton) GP3 Limited (08646819)** | Unite Finance One (Property) Limited (04303331)** | | LSAV (Stapleton) GP4 Limited (08647019)** | Unite FM Limited (06807562)** | | LSAV (Stapleton) Limited Partnership (50.%)** | UNITE For Success Limited (05157263)** | | LSAV (Stapleton) Management Limited Partnership (50.%)** | Unite HEI Investments GP Limited (15584836)** | | LSAV (Stratford) GP3 Limited (08751654)** | Unite HEI Investments LP (LP023677)** | | LSAV (Stratford) GP4 Limited (08751629)** | Unite Holdings Limited (03148468)*/** | | LSAV (Stratford) Management Limited Partnership (50.%)** | UNITE Homes Limited (05140262)** | | LSAV (Trustee) Limited (50.%) | Unite Integrated Solutions plc (02402714) | | LSAV (Wembley) GP1 Limited (08635735) (50.%)** | Unite Modular Solutions Limited (05140259)** | | LSAV (Wembley) GP2 Limited (08636051) (50.%)** | Unite Newcastle GP Limited (15588783) (51.0%)** | | LSAV (Wembley) GP3 Limited (08725127)** | Unite Rent Collection Limited (05982935)** | | LSAV (Wembley) GP4 Limited (08725235)** | UNITE Student Living Limited (06204135)** | | LSAV (Wembley) Limited Partnership (50.%)** | Unite Students Accommodation (Beijing) Business Service Company Ltd** | | LSAV (Wembley) Management Limited Partnership (50.%)** | USAF Finance II Limited (08526474) (21.3%) | | LSAV FACILITY 1 HOLDINGS LIMITED (13913388) (50.%)** | USAF GP No 1 Limited (05897875) (21.3%) | | LSAV FACILITY 1 MANAGEMENT HOLDINGS LIMITED (13913371)** | USAF GP No 10 Limited (06714734) (21.3%) | | LSAV Management Holdings Limited (13305327)** | USAF GP No 11 Limited (07075210) (21.3%) | | LSAV Rent Collection Limited (08496230)** | USAF GP No 11 Management Limited (07351883) (21.3%) | | Stardesert Limited (04437102)** | USAF GP No 12 Limited (07368735) (21.3%) | | The UNITE Foundation | USAF GP No 14 Limited (09089977) (21.3%) | | Unite (Capital Cities) Jersey Ltd** | USAF GP No 15 Limited (09585201) (21.3%) | | Unite Accommodation Management 16 Limited (07061314)** | USAF GP No 18 Limited (10219336) (21.3%) | | Unite Accommodation Management 18 Limited (08328484)** | USAF GP No 6 Limited (05897755) (21.3%) | | Unite Accommodation Management 19 Limited (08790504) (50.%)** | USAF GP No 8 Limited (06381914) (21.3%) | | Unite Accommodation Management 2 Limited (05193166)** | USAF GP No.15A Limited (12644211) (21.3%) | | Unite Accommodation Management 20 Limited (08790642) (50.%)** | USAF GP No.16A Limited (12644210) (21.3%) | | Unite Accommodation Management 6 Limited (05077346)** | USAF GP No.16B Limited (14707370) (21.3%) | | Unite Accommodation Management 9 Limited (06190863)** | USAF GP No.17A Limited (12644208) (21.3%) | | Unite Accommodation Management Limited (06190905)** | USAF GP No.17B Limited (14707101) (21.3%) | | Unite Accommodation Management One Hundred Limited (07989080)** | USAF GP No. 17C Ltd (15455410) (21.3%) | | Unite Capital Cities 3 GP1 Limited (13913884) (50.%) | USAF GP No. 18A Ltd (15455404) (21.3%) | | UNITE CAPITAL CITIES 3 LIMITED PARTNERSHIP (50.%)** | USAF GP No.19 Limited (14707096) (21.3%) | | Unite Capital Cities 3 Management Limited (13913891) (50.%)** | USAF Holdings K Limited (14700139) (21.3%) | | Unite Capital Cities 3 Nominee 1 Limited (13913890) (50.%)** | USAF Holdings B Limited (06324325) (21.3%) | | UNITE Capital Cities Holdings Limited (08801242) (50.%)** | USAF Holdings C Limited (06381882) (21.3%) | | Unite Capital Cities Limited Partnership (50.%)** | USAF Holdings H Limited (09089805) (21.3%) | * Held directly by the Company. ** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s477 or s379A for the financial year ended 31 December 2024. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- Registered office and principal place of business: South Quay House, Temple Back, Bristol, United Kingdom, BS1 6FL | USAF Holdings I Limited (09581882) (21.3%) | USAF No.16B Nominee 2 Limited (14707390) (21.3%)** | | --- | --- | | USAF Holdings J Limited (10215997) (21.3%) | USAF No.17A Limited Partnership (29.1%) | | USAF Holdings Limited (05870107) (21.3%) | USAF No.17B Limited Partnership (29.1%) | | USAF Jersey Investments Ltd** | USAF No.17B Nominee 1 Limited (14707108) (21.3%)** | | USAF Jersey Manager Ltd | USAF No.17B Nominee 2 Limited (14707114) (21.3%)** | | USAF LP Limited (05860874)** | USAF No.17C Nominee 1 Limited (15455419) (21.3%)** | | USAF Management 10 Limited (06714695) (29.1%) | USAF No.17C Nominee 2 Limited (15455417) (21.3%)** | | USAF Management 11 Limited (07082782) (29.1%) | USAF No.18A Nominee 1 Limited (15455414) (21.3%)** | | USAF Management 12 Limited (07365681) (29.1%) | USAF No.18A Nominee 2 Limited (15455424) (21.3%)** | | USAF Management 14 Limited (09232206) (29.1%) | USAF No.17C LP (29.1%) | | USAF Management 16 Ltd (07735741) (29.1%)** | USAF No.18 Limited Partnership (29.1%) | | USAF Management 17 Ltd (05591986) (29.1%)** | USAF No.18A LP (29.1%) | | USAF Management 18 Limited (10219775) (29.1%)** | USAF No.19 Limited Partnership (29.1%) | | USAF Management 6 Limited (06225945) (29.1%) | USAF No.6 Limited Partnership (29.1%) | | USAF Management 8 Limited (06387597) (29.1%) | USAF No.8 Limited Partnership (29.1%) | | USAF Management 8 No.2 Limited (15935823) (29.1%) | USAF Nominee No.1 Limited (05855598) (21.3%)** | | USAF Management GP No.14 Limited (09130985)** | USAF Nominee No.10 Limited (06714690) (21.3%)** | | USAF Management GP No.15 Limited (09749946)** | USAF Nominee No.10A Limited (06714615) (21.3%)** | | USAF Management GP No.16 Limited (09750068)** | USAF Nominee No.11 Limited (07075251) (21.3%)** | | USAF Management GP No.17 Limited (09750061)** | USAF Nominee No.11A Limited (07075213) (21.3%)** | | Usaf Management GP No.18 Limited (12410758)** | USAF Nominee No.12 Limited (07368733) (21.3%)** | | USAF Management GP No. 18A Ltd (15522502) | USAF Nominee No.12A Limited (07368755) (21.3%)** | | USAF Management Limited (05862721) (29.1%) | USAF Nominee No.14 Limited (09231609) (21.3%)** | | USAF Management No. 14 Limited Partnership (29.1%) | USAF Nominee No.14A Limited (09231604) (21.3%)** | | USAF Management No. 15 Limited Partnership (29.1%) | USAF Nominee No.15 Limited (12644205) (21.3%)** | | USAF Management No. 16 Limited Partnership (29.1%) | USAF Nominee No.15A Limited (12644204) (21.3%)** | | USAF Management No. 17 Limited Partnership (29.1%) | USAF Nominee No.16 Limited (12644201) (21.3%)** | | USAF Management No. 18 Limited Partnership (29.1%) | USAF Nominee No.16A Limited (12644197) (21.3%)** | | USAF Management No. 18A LP (LP023597) (29.1%) | USAF Nominee No.17 Limited (12644192) (21.3%)** | | USAF MANAGEMENT NO. 19 LIMITED (14707093) (29.1%) | USAF Nominee No.17A Limited (12644187)(21.3%)** | | USAF No.1 Limited Partnership (29.1%) | USAF Nominee No.18 Limited (10218595) (21.3%)** | | USAF No.10 Limited Partnership (29.1%) | USAF Nominee No.18A Limited (10219339) (21.3%)** | | USAF No.11 Limited Partnership (29.1%) | USAF Nominee No.19 Limited (14706129) (21.3%)** | | USAF No.11 Management Limited Partnership (29.1%) | USAF Nominee No.19A Limited (14706126) (21.3%)** | | USAF No.12 Limited Partnership (29.1%) | USAF Nominee No.1A Limited (05835512) (21.3%)** | | USAF No.14 Limited Partnership (29.1%) | USAF Nominee No.6 Limited (05855599) (21.3%)** | | USAF No.15 Limited Partnership (29.1%) | USAF Nominee No.6A Limited (05885802) (21.3%)** | | USAF No.15A Limited Partnership (29.1%) | USAF Nominee No.8 Limited (06381861) (21.3%)** | | USAF No.16A Limited Partnership (29.1%) | USAF Nominee No.8A Limited (06381869) (21.3%)** | | USAF No.16B Limited Partnership (29.1%) | USAF RCC Limited (05983554) (21.3%) | | USAF No.16B Nominee 1 Limited (14707400) (21.3%)** | | * Held directly by the Company. ** Company is exempt from the requirements of the Companies Act relating to the audit of individual financial statements by virtue of s477 or s379A for the financial year ended 31 December 2024. THE UNITE GROUP PLC Annual Report and Accounts 2024 --- FINANCIAL STATEMENTS # NOTES TO THE FINANCIAL STATEMENTS continued Registered office and principal place of business: 13 Castle Street, St Helier, Jersey, JE4 5UT | LDC (Gt Suffolk St) Unit Trust | LSAV (Aston Student Village) Unit Trust (50.0%) | | --- | --- | | LDC (St Pancras Way) Unit Trust | LSAV (Holdings) Limited (50.0%) | | LDC (Thurso Street) Unit Trust | LSAV (Trustee) Limited (50.0%) | | LSAV (Jersey Manager) Limited | LSAV Unit Trust (50.0%) | | Unite (Capital Cities) Jersey Limited | Unite Capital Cities Unit Trust (50.0%) | | USAF Jersey Investments Limited | USAF Portfolio 18 Unit Trust (29.1%) | | USAF Jersey Manager Limited | LDC (Nairn Street) Unit Trust (29.1%) | | LDC (Ferry Lane 2) Unit Trust (50.0%) | Unite HEI Investments Unit Trust (51.0%) | | LDC (Stratford) Unit Trust (50.0%) | Unite UK Student Accommodation Fund (21.3%) | | LSAV (Drapery Plaza) Unit Trust (50.0%) | LSAV (Arch View) Unit Trust (50.0%) | Registered office and principal place of business: Third Floor, La Plaiderie Chambers, St Peter Port, Guernsey, GY1 1WG | USAF Feeder Guernsey Limited | USAF Portfolio 16 Unit Trust (29.1%) | | --- | --- | | USAF Portfolio 15 Unit Trust (29.1%) | USAF Portfolio 17 Unit Trust (29.1%) | Registered office and principal place of business: Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN | LSAV (GP) Limited (SC431844) (50.0%) | LSAV (Property Holdings) Limited Partnership (50.0%) | | --- | --- | Registered office and principal place of business: Trident Chambers, Wickhams Cay, P.O. Box 146, Road Town, Tortola, British Virgin Islands | Liberty Park (Bedford) Limited | Liberty Plaza (Newcastle) Limited | | --- | --- | Registered office and principal place of business: Second Floor, St George's Court, Upper Church Street, Douglas, Isle of Man, IM1 1EE | Filbert Street Student Accommodation Unit Trust (29.1%)** | | | --- | --- | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- # FINANCIAL RECORD (unaudited) | | 2024 | 2023 | 2022 | 2021 | 2020 | | --- | --- | --- | --- | --- | --- | | EPRA earnings (£m) | 202 | 176 | 157 | 152 | 97 | | EPRA earnings per share (pence) | 44 | 42 | 39 | 38 | 26 | | Adjusted earnings (£m) | 214 | 184 | 163 | 110 | 93 | | Adjusted earnings (pence) | 47 | 44 | 41 | 28 | 24 | | IFRS profit/(loss) before tax (£m) | 442 | 103 | 351 | 342 | (120) | | IFRS profit/(loss) before tax per share (pence) | 103 | 25 | 88 | 86 | (32) | | EPRA net tangible assets (NTA) (£m) | 4,758 | 4,015 | 3,717 | 3,532 | 3,266 | | EPRA NTA per share (pence) | 972 | 920 | 927 | 882 | 818 | | IFRS net assets (£m) | 4,812 | 4.067 | 3,788 | 3,528 | 3,235 | | IFRS NAV per share (pence) | 982 | 931 | 944 | 880 | 809 | | LTV (%) | 24% | 28% | 31% | 29% | 34% | | Managed portfolio value | 8,938 | 8,663 | 8,522 | 8,108 | 7,838 | | Total accounting return (TAR) | 9.6% | 2.9% | 8.10% | 10.20% | (3.40%) | THE UNITE GROUP PLC Annual Report and Accounts 2024 213 --- OTHER INFORMATION ![img-112.jpeg](img-112.jpeg) ![img-113.jpeg](img-113.jpeg) # Other information ![img-114.jpeg](img-114.jpeg) 214 THE UNITE GROUP PLC Annual Report and Accounts 2024 --- ![img-115.jpeg](img-115.jpeg) # OTHER INFORMATION 216 Glossary Cover Company information ![img-116.jpeg](img-116.jpeg) THE UNITE GROUP PLC Annual Report and Accounts 2024 215 --- OTHER INFORMATION # GLOSSARY | Adjusted earnings | An alternative performance measure based on EPRA earnings, adjusted to remove the impact of abortive acquisition costs, software as a service cost net of deferred tax and other items of an exceptional nature. The items have been excluded from adjusted earnings to improve the comparability of results year-on-year. | | --- | --- | | Adjusted earnings per share/EPS | The earnings per share based on adjusted earnings and weighted average number of shares in issue (basic). | | Adjusted EPS yield | Adjusted EPS as a percentage of opening EPRA NTA (diluted). | | Adjusted net debt | Net debt per the balance sheet, adjusted to remove IFRS 16 lease liabilities and the unamortised fair value of debt recognised on the acquisition of Liberty Living. | | Basis points (BPS) | A basis point is a term used to describe a small percentage, usually in the context of change, and equates to 0.01%. | | Diluted earnings/EPS | Where earnings values per share are used, basic measures divide the earnings by the weighted average number of issued shares in issue throughout the period, whilst the diluted measure also takes into account the effect of share options which have been granted and which are expected to be converted into shares in the future. | | Diluted NTA/NAV | Where NTA/NAV per share is used, basic measures divide the NTA/NAV by the number of shares issued at the reporting date, whilst the diluted measure also takes into account the effect of share options which have been granted and which are expected to be converted into shares in the future (both for the additional number of shares that will be issued and the value of additional consideration that will be received in issuing them). | | Direct-let | Properties where short-hold tenancy agreements are made directly between Unite Students and the student. | | EBITDA | The Group's adjusted EBIT, adding back depreciation and amortisation. | | EPRA | The European Public Real Estate Association, who produce best practice recommendations for financial reporting. | | EPRA cost ratio | The ratio of property operating expenses, overheads and management fees, against rental income, calculated on an EPRA basis. | | EPRA earnings | EPRA earnings exclude movements relating to changes in values of investment properties, profits/losses from the disposal of properties, swap/debt break costs, interest rate swaps and the related tax effects. | | EPRA earnings per share/EPS | The earnings per share based on EPRA earnings and weighted average number of shares in issue (basic). | | EPRA like-for-like rental growth | The growth in rental income measured by reference to the part of the portfolio of the Group that has been consistently in operation, and not under development nor subject to acquisition or disposal, and which accordingly enables more meaningful comparison in underlying rental income levels. | | EPRA net tangible assets (NTA) | EPRA NTA includes all property at market value but excludes the mark to market of financial instruments, deferred tax and intangible assets. EPRA NTA provides a consistent measure of NAV on a going concern basis. | | EPRA net tangible assets per share | The diluted NTA per share figure based on EPRA NTA. | | EPRA net reinstatement value (NRV) | EPRA NRV includes all property at market value but excludes the mark to market of financial instruments, deferred tax and real estate transfer tax. EPRA NRV assumes that entities never sell assets and represents the value required to rebuild the entity. | | EPRA net disposal value (NDV) | EPRA NDV includes all property at market value, excludes the mark to market of financial instruments but includes the fair value of fixed interest rate debt and the carrying value of intangible assets. EPRA NDV represents the shareholders' value in a disposal scenario. | | EPRA net initial yield (NIY) | Annualised NOI generated by the Group's rental properties expressed as a percentage of their fair value, taking into account notional acquisition costs. | | EPRA topped up net initial yield (NIY) | EPRA Net Initial Yield adjusted to include the effect of the expiration of rent free periods (or other unexpired lease incentives such as discounted rent periods or step rents). | | EPRA vacancy rate | The ratio of the estimated market rental value of vacant spaces against the estimated market rental value of the entire property portfolio (including vacant spaces). | | ESG | Environmental, Social and Governance. | | Full occupancy | Full occupancy is defined as occupancy in excess of 97%. | | GRESB | GRESB is a benchmark of the Environmental, Social and Governance (ESG) performance of real assets. | | Gross asset value (GAV) | The fair value of rental properties, leased properties and development properties. | | The Group | Wholly-owned balances plus Unite Group's interests relating to USAF and LSAV. | | Group debt | Wholly-owned borrowings plus Unite Group's share of borrowings attributable to USAF and LSAV. | | HMO | Houses in multiple occupation, where buildings or flats are shared by multiple tenants who rent their own rooms and the property's communal spaces on an individual basis. | | IFRS NAV per share | IFRS equity attributable to the owners of the Parent Company from the consolidated balance sheet divided by the total number of shares of the Parent Company in issue at the reporting date. | THE UNITE GROUP PLC Annual Report and Accounts 2024 --- THE UNITE GROUP PLC Annual Report and Accounts 2024 217 | Interest cover ratio (ICR) | Calculated as EBIT divided by the sum of net financing costs and IFRS 16 lease liability interest costs. | | --- | --- | | Lease | Properties which are leased to universities for a number of years. | | Like-for-like metrics | Like-for-like is the change in metric, on a gross basis, calculated using properties owned throughout the current and previous period. | | Loan to value (LTV) | Net debt as a proportion of the value of the rental properties, excluding balances in respect of leased properties under IFRS 16. Prepared on a see-through basis. In the opinion of the Directors, this measure enables an appraisal of the indebtedness of the business, which closely aligns with key covenants in the Group's financing agreements. | | Loan to value post IFRS 16 | Net debt as a proportion of the value of the rental properties, including balances in respect of leased properties under IFRS 16. Prepared on a see-through basis. | | LTV (EPRA) | Net debt as a proportion of the value of the rental properties including balances in respect of leased properties and all other assets and liabilities. | | LSAV | The London Student Accommodation Joint Venture (LSAV) is a joint venture between Unite Group and GIC, in which both hold a 50% stake. LSAV has a maturity date of September 2032. | | Major regional | Properties located in Aberdeen, Birmingham, Cardiff, Glasgow, Leeds, Leicester, Liverpool, Newcastle, Nottingham, Sheffield and Southampton. | | Net asset value (NAV) | The total of all assets less the value of all liabilities at each reporting date. | | Net debt (EPRA) | Borrowings net of cash. IFRS 16 lease liabilities are excluded from net debt on an EPRA basis. In the opinion of the Directors, net debt is a useful measure to monitor the overall indebtedness position of the Group. | | Net debt per balance sheet | Borrowings, IFRS 16 lease liabilities and the mark to market of interest rate swaps, net of cash. | | Net debt to EBITDA | Net debt as a proportion of EBITDA. | | Net financing costs (EPRA) | Interest payable on borrowings less interest capitalised into developments and finance income. | | Net operating income (NOI) | The Group's rental income less property operating expenses. | | Net zero carbon | Net zero carbon operations by 2030 covers Scope 1 & 2 emissions from our buildings, including all building energy used by our student tenants, as well as selected Scope 3 emissions as per the BBP Climate Change Commitment. This is underpinned by science based carbon targets which have been validated by the SBTi as being aligned with a 1.5°C limit to warming. | | NOI margin | The Group's NOI expressed as a percentage of rental income. | | Nomination agreements | Agreements at properties where universities have entered into a contract to reserve rooms for their students, usually guaranteeing occupancy. The universities usually either nominate students to live in the building and Unite Students enters into short-hold tenancies with the students or the university enters into a contract with Unite Students and makes payment directly to Unite Students. | | Provincial | Properties located in Bournemouth, Coventry, Loughborough, Medway, Portsmouth and Swindon. | | Prime regional | Properties located in Bath, Bristol, Durham, Edinburgh, Manchester and Oxford. | | Property operating expenses | Operating costs directly related to rental properties, therefore excluding central overheads. | | Rental growth | Calculated as the year-on-year change in the average annual price for sold beds. In the opinion of the Directors, this measure enables a more meaningful comparison in rental income as it excludes the impact of changes in occupancy. | | Rental properties (leased)/Sale and leaseback | Properties that have been sold to a third-party investor then leased back to the Group. Unite Group is also responsible for the management of these assets on behalf of the owner. | | Resident ambassadors | Student representatives who engage with students living in the property to create a community and sense of belonging. | | SaaS | Software-as-a-Service is a licensing and distribution model used to deliver cloud-based software applications to users over the internet. | | See-through (also Unite Group share) | Wholly-owned balances plus Unite Group's share of balances relating to USAF and LSAV. | | Senior Leadership | Directors (including the Executive Committee and Company Secretary) and Heads of Function. | | TCFD | The Task Force on Climate-related Financial Disclosures develops voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers and other stakeholders. | | Total accounting return | Growth in diluted EPRA NTA per share plus dividends paid, expressed as a percentage of diluted EPRA NTA per share at the beginning of the period. In the opinion of the Directors, this measure enables an appraisal of the return generated by the business for shareholders during the year. | | Total shareholder return | The growth in value of a shareholding over a specified period, assuming dividends are reinvested to purchase additional shares. | | USAF/the fund | The Unite UK Student Accommodation Fund (USAF) is Europe's largest fund focused purely on income-producing student accommodation investment assets. The fund is an open-ended infinite life vehicle with unique access to Unite Group's development pipeline. Unite Group acts as fund manager for the fund, as well as owning a significant minority stake. | | WAULT | Weighted average unexpired lease term to expiry. | | Wholly-owned | Balances relating to properties that are 100% owned by The Unite Group PLC or its 100% subsidiaries. | --- # UNITE STUDENTS ## THE UNITE GROUP PLC ## EXECUTIVE TEAM - Joe Lister Chief Executive Officer - Mike Burt Chief Financial Officer - Registered Office South Quay House, Temple Back, Bristol BS1 6FL - Registered Number in England 03199160 - Company Secretary Christopher Szpojnarowicz ## AUDITOR - Deloitte LLP 1 New Street Square, London EC4A 3HQ ![img-117.jpeg](img-117.jpeg) Find out more online at www.unitegroup.com ## FINANCIAL ADVISERS - J.P. Morgan Cazenove 25 Bank Street, London E14 5JP - Deutsche Numis 45 Gresham Street, London EC2V 7BF ## REGISTRAR - Computershare Investor Services plc PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH ## FINANCIAL PR CONSULTANTS - Sodali & Co 122 Leadenhall Street City of London EC3V 4AB ![img-118.jpeg](img-118.jpeg) ![img-119.jpeg](img-119.jpeg)