Barclays starts Unite at 'overweight'
Barclays initiated coverage of student accommodation provider Unite at 'overweight' with a 1,200p price target on Monday, highlighting three key reasons to be "fundamentally bullish" on the UK student housing market and the company itself.
FTSE 250
19,830.16
10:49 26/04/24
FTSE 350
4,459.88
10:50 26/04/24
FTSE All-Share
4,413.32
10:50 26/04/24
Real Estate Investment Trusts
2,230.73
10:49 26/04/24
Unite Group
924.00p
10:49 26/04/24
Firstly, the bank pointed to a dual-layered supply and demand imbalance. It noted a "material" mismatch between application and university acceptance numbers and said Brexit risks were "overplayed". It also said that student demand exceeds the supply of purpose built student accommodation.
Secondly, Barclays said it reckons the supply shortage will remain in place generally across the UK and that Unite has a "strong history" and expertise in sourcing and delivering developments.
Thirdly, the bank said Unite offers investors "a best-in-class operational platform and market leading scale through which it can amplify the returns available from the positive market fundamentals".
At 1108 BST, the shares were down 0.6% at 1,009p.