THE UNITE GROUP PLC Annual Report and Accounts 2024 23 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.