Subject: Re: Unite Group (UTG), UK, falling knife.
> Not too late, I'd say. If it was worth buying during the current dip, it's probably still worth buying.

I certainly hope so, seeing as my average price of purchase is above the current level! :-)

Here's an interesting graph.

The black line is Unite Group and the blue line is IUKP, which is a market-cap weighted index ETF of UK REITs.

https://stockcharts.com/sc3/ui...

(If it doesn't set itself to 5 years automatically, please pick that option.)

From this you can see that in the last 5 years Unite has been less affected than the average REIT by things like interest rates and sentiment. Which makes sense. 'Social housing' property REITs got hammered, 'office' property REITs got hammered, and highly indebted REITs got hammered. Unite doesn't fall into any of those categories and has continued growing NAV/earnings even as interest rates went up.

Currently and across the 5 year period, there is a 'dump' in UK REITs but Unite's October 2025 dump goes far beyond what is normal for the stock.

Unite could instantly jump 20% higher than it is today, and it would still be trailing its typical performance by about 10-20%. On top of that, the whole REIT sector itself may be worth a bet separate to the Unite discount.

What's interesting is that this gap between Unite and the rest of the herd has happened before in the last 5 years. You can see in late 2021 to early 2022, a gap emerged where the average REIT was outperforming Unite quite a bit. IMHO it was due to the start of 'return to office' & 'return to high street retail' (Landsec, British Land) concurrent with a boom in logistics REITs (Segro, Big Box etc) and a brief bubble in short-term storage REITs (Big Yellow, Safestore).

That relative valuation gap (Unite vs IUKP in 2022), which was somewhat similar to this recent gap, persisted for about 6 months then disappeared and instead became a relative premium for several years.

Who knows, maybe history will repeat, or rhyme?

TRS

p.s. Knowing that others may still be invested in Land Securities and British Land, it's interesting to make the same comparison against IUKP. The relative valuation of LAND and BLND over the entire UK REIT sector looks quite high at the moment, compared to the past 5 years. Of course, that may be justified, or perhaps not. Personally, I have my doubts about LAND's pivot from offices (at a time of weakness in office pricing) to retail buy-to-let (at a time of relatively high prices & construction costs). BLND is my favourite of the two (imho).