S&P moves Unite Group view to stable

S&P said it revised Unite Group plc’s outlook to stable from negative and affirmed the BBB ratings on the company and its debt. The agency also changed the outlook on Unite's core and wholly owned subsidiary Liberty Living Finance plc to stable from negative and affirmed its BBB long-term issuer credit and issue ratings.

“The outlook revision reflects our view that Unite's occupancy rates will recover closer to pre-pandemic levels in the next two years, and, along with rental growth, support its credit metrics. This is largely because social distancing measures are easing. Unite should demonstrate an ongoing occupancy recovery from 94% in the 2021/2022 academic year (already up on 88% for the year before),” S&P said in a press release.

The agency said the increase in occupancy, coupled with expected annual rental growth of about 2.5%-3%, should see Unite's S&P Global Ratings-adjusted debt to EBITDA moving toward 9.5x in 2021 and lower in the coming two years, from 11.3x in 2020.

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