What the Unite-Empiric mega-merger means for the future of PBSA

But scale is only half the story. Consolidation is increasingly driven by city-level dynamics, not national ones. The Competition and Markets Authority’s clearance of the deal effectively confirmed that competition in PBSA is localised: even large operators with national reach can acquire rivals without materially diminishing market choice in most cities.

This opens the door to further mergers or targeted acquisitions of local, specialist operators. These have been the very trend widely highlighted in industry commentary, which forecasts that small, locally embedded PBSA providers will become attractive bolt-on targets for platforms expanding their portfolios in a measured and geographically strategic fashion.

This development may play out in a number of ways, through both corporate acquisitions and asset transfers, but it may also boost the appetite for development through strategic partnerships.

Policy pressures and the state of play

The broader housing sector will recognise the familiar tension: strong structural demand buffeted by short-term policy shockwaves. 

The government’s January 2024 restrictions barring most dependants of international students and the drop in study visa applications – as well as threats to post-study work rights and general funding pressures on universities (not least evidenced by the University of Essex closing its Southend campus and the newly announced merger of the Universities of Greenwich and Kent) – means there is bound to be some nervousness around whether the level of demand can and will be maintained.

Contrast this with a 14% boost in international acceptances for January 2025 courses, cited by Unite in its trading updates, and there is a suggestion that demand may actually be elastic and resilient in the wake of policy shifts.

The student numbers may be there but their concentration in particular locations will be of note. Cautious developers are likely to maintain a focus on particular university towns where application numbers remain high and where there is scope for the universities to adjust to attract greater numbers.

Rental growth has been reported but affordability pressures are likely to be tempering this. Ultimately, supply remains the defining constraint for the PBSA market.

Is there an opportunity for developers? National pipeline modelling shows that while up to 120,000 student rooms could be delivered over the next four years, not all will come forward, with construction cost inflation and debt pricing continuing to clip delivery rates – a story all too familiar across the living sector.

Corporate strategy: funding and expansion

Unite’s £100m share buyback, announced on 9 January 2026, is interesting from a corporate strategy perspective. It shows a deliberate shift in capital allocation at a moment when development pipelines are slowing and construction risk remains elevated.

Buybacks allow companies to return surplus capital, support earnings‑per‑share metrics during periods of integration and signal management’s confidence in future cashflow strength, while avoiding the long‑term commitments associated with dividend increases.

In a consolidating PBSA market, buybacks also give companies flexibility to strengthen their balance sheet ahead of future acquisitions or asset restructuring projects, ensuring they remain competitive without committing to projects that do not meet revised return thresholds. 

This fits with the expected strategy for the PBSA market, namely selective development, recycling of capital and prioritisation of projects with university partnership backing.

University-led development models

As with the wider living sector, joint venture (JV) models may hold some of the answers for unlocking delivery of new PBSA. A good illustrative example of this shift is Unite’s 2,009-bed Castle Leazes JV with Newcastle University.

A JV approach, constructing efficiently and sharing risk and reward, is a tried and tested route. Where demand risk is a concern, this can be addressed by putting in place nomination agreements, where the university agrees to fill a specific number of rooms for a set period.

Fixed demand, predictable pricing and alignment with institutional ESG targets make campus-adjacent schemes increasingly attractive amid a high-cost construction environment.

Acquisitions of locally centred operators and assets

Existing PBSA schemes in key locations may be acquired by larger providers looking to grow or diversify their portfolio, applying the economies of scale required to address tighter margins in the delivery of specialised accommodation. Operators with strong local brand equity or key geographical locations with stable occupancy will therefore be in high demand as targets.

PBSA evolution is accelerating. Consolidation, capital discipline and university collaboration will no doubt shape the market in a future where scale matters, but ultimately local intelligence and institutional partnerships matter even more.

Helen Curtis and Caroline Mostowfi, partners, Devonshires law firm