Unite Students has slammed the brakes on parts of its development pipeline, blaming mounting viability pressures and a tougher planning environment as it pivots capital towards higher-yielding universities and shareholder returns.

The country’s biggest student accommodation developer this morning said it had deferred delivery of its 500-bed Freestone Island scheme in Bristol while it explores options to secure “best value” from the project.

The move releases around £55m of capital that had been earmarked for construction.

The group has also walked away from its flagship £147m TP Paddington scheme in London, despite securing planning permission on appeal.

It said this morning that the 605-bed project was no longer financially viable against Unite’s return hurdles, with an extended delivery programme compounding the challenges faced by the big project.

Unite said the decision to abandon the project would lead to a £10m exceptional write-off of planning costs.

In a year-end trading update, chief executive Joe Lister said the business was still trading in line with expectations, despite a slower start to the next sales cycle.

“Sales progress to date is consistent with our guidance for occupancy of 93–96% and rental growth of 2–3% for the 2026/27 academic year,” he said.

“Our conversations with our university partners show continued demand for our high-quality, value-for-money accommodation, notwithstanding a slower start to the 2026/27 sales cycle.”

Alongside the development pullback, Unite has unveiled a £100m share buyback, funded initially through reduced off-campus development activity.

Lister said: “Consistent with the revised capital allocation policy, we are today launching a £100m share buyback programme to return surplus capital to shareholders.

“This will initially be funded through reduced off-campus development activity, which maintains our high-quality balance sheet.”

He added that the group would continue to invest selectively where risk-adjusted returns stack up, with further surplus capital expected as planned asset disposals progress.

The revised strategy underlines a wider slowdown in new PBSA supply across the UK, with Unite pointing to worsening scheme economics and regulatory drag.

The developer said viable new schemes now require minimum rents of around £230 per week, while Building Safety Act gateways were adding six to 12 months to delivery programmes.

Freestone Island Temple Meads project was caught up in the Building Safety Regulator logjam for nearly a year.

Planning activity has also dried up, with 2025 seeing the lowest number of PBSA planning submissions in the past five years.

Industry data from CBRE, Cushman & Wakefield and Unite shows net new supply growth falling sharply, with deliveries in 2026 amounting to just a low-single-digit percentage of existing stock and further easing expected into 2027.

Unite said its focus was now firmly on operational performance and capital discipline, which it believed would support a return to earnings growth from 2027.