THE UNITE GROUP PLC Annual Report and Accounts 2024 26 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 Direct-let Nominations UK China EU Non-EU Total 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%