UK - London-based specialist property development group Unite is planning to build two student residence blocks worth €68m in London, and expanding its repertoire to try and plug the demand for housing among graduates.

Unite is already seen as one of the UK's major student accommodation suppliers, operating as both an asset manager and developer, but is now widening its presence as part of the firm's strategy to significantly increase it presence in London by developing new builds on the south bank of the River Thames.

The firm, which is 4.5% owned by APG, the asset manager of the €205bn Dutch pension fund ABP, already uses modular construction techniques which it says enables it to develop its projects rapidly but to standards that exceed building regulations.

But upcoming developments will also see Unite expand yet further into another niche market in London - graduate housing.

Unite's graduate housing concept is to help former students find cost-effective housing in a market where spiralling prices have made it hard for first-time buyers to get on the property ladder. Using a similar business model as developer and co-investor, Unite believes this is another area that will attract new long-term investors such as pension funds.

"In 2007 UNITE expanded into the new field of graduate housing in London, by opening a 62-studio project in Marylebone," the firm said. "This is the market where four London projects - we will develop in 2008/2009 - will focus on," say officials.

With a portfolio already boasting 129 properties housing some 38,000 students across the UK, Jagdeep Bhogal, group regional planning director, at UNITE said London was the ideal market for expansion, even with current market conditions.

"London remains one of the most undersupplied student accommodation markets in the UK, with only 47% of first year and overseas students housed in purpose built student accommodation. Therefore London will remain a key target for our future pipeline."

With a further four projects planned for London in the coming year, the firm claims its strategy to expand represents a good opportunity for investors with a long-term outlook, as the student population is largely unaffected by economic conditions, unlike other segments of the property market.

"With student rents resilient to economic cycles, and the continued growth in student numbers, especially from overseas, UNITE developments typically show high occupancy levels in a market where there is a general shortage of quality supply," noted Unite.