41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 84
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
PRINCIPAL RISKS AND UNCERTAINTIES continued
Summary of principal risks and uncertainties
The table that follows describes the Group’s principal risks and uncertainties, and explains how these are managed or mitigated.
PRINCIPAL RISK
MARKET
1
Risk description:
• A reduction in demand driven by macroeconomic factors.
Objective
Offer market leading
customer service to
address any potential
reduction in demand
ensuring we sell
without compromising
price
2
Events that may
trigger the risk
• Changes in Government Policy
on Higher Education funding
•
•
Immigration Policy changes
affecting international
students
Potential impact
• Loss of income
• Reduction in demand affecting
yield and asset values
How we monitor
and negotiate
• Maintain dialogue with
Government and Higher Education
providers
• Ongoing monitoring of
Government Higher Education
and immigration Policy
Longer term impact of Brexit
on EU students studying in
the UK
• Invest in developing markets to
attract a wider demographic
Risk description:
A reduction in demand driven by value-for-money considerations and affordability.
•
Maintain our property
portfolio to a high
standard to ensure
enduring relationships
with the high and mid
ranked universities,
and consistently drive
sales performance
• Increased blended learning;
more students remain at home
•
Increased regulation over
rents
• More competition and reduced
demand for year-round
student accommodation in the
longer-term resulting in lower
profitability and asset values
• Regularly review our portfolio to
ensure we have a quality portfolio,
appropriately sized and in the right
locations
• London weighting on loans
and grants removed
• Further education overtakes
Higher Education
• Lack of investment in the
quality of our product offering
3
Risk description:
Over supply in the market; as a maturing sector new entrants to the market will increase
competition and could lead to a loss of market share.
•
Build and maintain a
sector leading offer for
our customers
• Well funded competitors
improving their offer and
service
• Unite fails to invest in its brand
• Unite does not keep pace with
customer expectations
• More competition for the
best sites
• Potential impact on rental
growth and occupancy
• Reduced revenue
and increased costs
associated with part filled
accommodation
• Disciplined investment approach
to markets with supply/ demand
imbalance
• Exposure to the best universities
with our new developments
secured with nomination
agreements
• Geographically diverse portfolio
• Broad range of product and
price offerings
• Long term partnership
arrangements with universities
• Actively driving differentiation
through our brand investment
and promises
• Differing strategies for B2C
and B2B to mitigate against the
different challenges in each market
