THE UNITE GROUP PLC Annual Report and Accounts 2024 08 MARKET OVERVIEW continued STRATEGIC REPORT Universities have responded to lower international demand during 2024 by increasing recruitment of UK students. University recruitment 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. 5 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. Inflation has returned to close to target levels and interest rates have begun to gradually reduce. Economic outlook WHAT IT MEANS FOR UNITE STUDENTS • Lower funding costs increase the attractveness 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. 4 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.