Malaysia, Singapore, 6 February 2023 – Sunway RE Capital (“Sunway RE Capital”), a platform for international real estate investments of Sunway Group – one of Southeast Asia’s leading conglomerates, is pleased to announce the expansion of its student accommodation portfolio with the acquisition of a new freehold PBSA, Green Wood Court, in Southampton, UK, through its established and sponsored private trust established in Singapore, Sunway Residence Trust II.

Strategically located with a few minutes’ walk from the University of Southampton’s Highfield and Bolderwood campuses, the 233-bed freehold PBSA, Green Wood Court, also has a bus stop situated directly in front of the property that facilitates ease of access to the rest of the University’s halls and campuses, as well as established connection links to the UK and rest of Europe.

Green Wood Court has achieved a 100% occupancy rate for the academic year 2022/2023 and in 2018, Green Wood Court has been extensively refurbished with new carpets, bathrooms, showers, furniture, and fittings in 2018. Please see APPENDIX A of this press release for pictures of Green Wood Court.

There are opportunities for asset enhancement initiatives to add new studios within Green Wood Court and following the acquisition, Sunway RE Capital will be exploring its options to optimise the potential of this PBSA.

According to Universities and Colleges Admissions Service, universities in the UK are seeking to stabilise student numbers after a surge over the last two years amid the COVID pandemic. The trend is likely to continue in the coming years, as universities in the UK grapple with growing numbers of applications due to an increase in the number of 18-year-olds in the UK population. This is projected to continue for a decade, rising 2-3% almost every year with international student numbers growing as well.

Ranked as the 6th safest big city in the UK, the University of Southampton’s campuses are located in prosperous and green areas of Southampton. A global top 100 university, the University of Southampton is also ranked as one of the top 13 university in the UK with a community of over 6,500 international students from 135 different countries.

Post-acquisition, Sunway RE Capital owns and manages a portfolio of 5 PBSA assets (AUM of £75 million) with over 800 beds spanning across key cities in the UK.

Sunway RE Capital Chief Executive Officer, Dr. Tan Kok Heng, said: “The demand for quality education overseas continues to see a steady rise post pandemic and the UK remains one of the most popular destination for overseas students in the world.

With its 100% occupancy rate and limited supply of PBSAs in the area, the acquisition of the 233-bed Green Wood Court in Southampton, UK, marks an attractive addition to our PBSA portfolio and it is consistent with our fund strategy to achieve steady and stable income streams, with potential value-added upside through active asset management and enhancement initiatives.

Building on this momentum and the strength of Sunway’s track record and competencies, we aim to accelerate our efforts to scale up our platform to acquire additional yield accretive student accommodations in the UK, grow our AUM and extend our track record.”

Issued on behalf of Sunway RE Capital by 8PR Asia Pte Ltd.
Media Contact:
Mr. Alex TAN
Mobile: +65 9451 5252
Email: alex.tan@8prasia.com

About Sunway Group
Established in 1974, Sunway Group is one of Southeast Asia’s leading conglomerates with 13 business divisions across more than 50 locations primarily in Asia. Our 16,000-strong team is committed to sustainable development and socio-economic progress through our diverse businesses including core interests in real estate, construction, education, healthcare, retail and hospitality.

Sunway is committed to advancing the United Nations Sustainable Development Goals and continues to align them with our Environmental, Social and Governance (ESG) targets as part of our corporate strategy and social responsibility towards driving the group’s long-term success and deepening our commitment to nation-building.

Our three public-listed companies — Sunway Berhad, Sunway Construction Group Berhad, and Sunway REIT, with a combined market capitalisation of RM 15 billion — form a real-estate value chain that exemplifies socially responsible business practices. For more information, visit www.sunway.com.my.

About Sunway RE Capital Pte Ltd
Sunway RE Capital Pte Ltd invests in listed and unlisted funds established in Singapore. Sunway RE Capital’s objective is to invest in real estate for recurring income along with a fund management platform. Its key investment focus is commercial properties and purpose-built student accommodation (PBSA) primarily in the United Kingdom. For more information, visit www.sunwayrecapital.com

Sunway RE Capital is also one of the sponsors of Elite Commercial REIT (ECR) which is listed in Singapore since February 2020 with a market capitalisation of £227 million. ECR is the first and only UK- Focused S-REIT which comprises 155 predominantly freehold quality commercial buildings (“Portfolio”) located across the UK with an aggregate value of £517.7 million. The Portfolio has a total net internal area of approximately 3.9 million square feet and a total site area of approximately 72 hectares. For more information, visit www.elitecreit.com.

About Sunway Residence Trust II
Sunway Residence Trust II, sponsored by Sunway RE Capital Pte Ltd, is a private trust established in Singapore that aims to create a stable recurring income with potential growth in net asset value to its investors. This fund approaches its acquisition strategy by a two-level approach namely geographical allocation and diversification of the portfolio as well as micro location of the assets.

With the primary goal being acquisition of assets within the Russell Group Universities cities, the trust carefully examines potential assets and their occupancy demand prior to their acquisition decision. Standing with a current portfolio of £75 million valuation, 828 beds, and less than 5 years of average asset age, Sunway Residence Trust II currently owns assets such as Green Wood Court, Redvers Tower, The Colston, Centre Gate, and Mansion Point. For more information, visit https://sunwayrecapital.com/portfolio/sunway-residence-trust/.

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KUALA LUMPUR (March 10): Sunway RE Capital — which is part of Sunway Group — has partnered MBU Capital to invest and manage Purpose Built Student Accommodation (PBSA) in the United Kingdom, underpinned by signs of recovery in the sector.

Sunway said in a statement, the collaboration has been pre-seeded through a combination of assets and readily deployable equity, totalling £110 million.

Citing the latest PBSA sector update from property adviser CBRE, it said the fund is supported by positive demand for undergraduate places and an acute undersupply of student accommodation exacerbated by construction delays.

It added that the Universities and Colleges Admissions Service data revealed a 2% year-on-year increase in overall applicant numbers in June 2020 as well as a significant increase in applications from international students.

It also said MBU Capital’s property team, which has presided over more than 5,000 PBSA units, will seek institutional stock predominantly within Russell Group universities. Seeded assets already include units in Bristol, Manchester and Sheffield.

MBU Capital’s chief executive officer Mohammed Iqbal said: “Pre-pandemic, student occupancy rates were typically above 97%. Not only do we anticipate a bounceback in the near future, but the number of full-time students in the UK has reached a record level, and is only set to grow. This fund provides investors with the opportunity to capitalise on the compelling UK student market with an established and trusted partner.”

Sunway RE Capital’s executive director Dr Tan Kok Heng said he believes the UK is most likely to remain one of the world’s most popular student hotspots and demand from overseas for high-quality education is expected to rise once travel restrictions are lifted.

“We’re optimistic about this sector and we’ve created a fund management team which has a track record of sourcing and delivering world class institutional stock,” he said.

According to the statement, the fund’s management team will build the portfolio and associated infrastructure through best-in-class practices, in preparation of an exit through a real estate investment trust listing within three years.

The three-year fund is targeting to deliver an annual coupon of 6% to 8%, with an internal rate of return of 12%.

At the time of writing, Sunway rose nine sen or 5.59% to RM1.70, valuing the group at RM8.27 billion.

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The proposed acquisition will provide Sunway Group with geogrpahical and sectorial diversification, as well as a stable and sustainable income stream, according to the group’s stock exchange filing today.

The three accommodations the group is buying are: The Colston for £9.12 million  (RM49.2 million), Centregate Property for £9.53 million  (RM51.3 million), and Redvers House for £18.98 million (RM102.3 million). Sunway said SRG has inked the agreements to effect the acquisitions from the vendors Colston Property Developments LLP, Marboot Centregate Ltd and Make Space Redvers Ltd, respectively.

Meanwhile, Sunway’s two other private trusts, Sunway RE Capital Advisors (SG) Ltd (SG Fund Manager) and UK Fund Manager, have entered into a shareholder agreement (SHA) with Mansion Property Management Ltd (MPML) to regulate the rights of SG Fund Manager and MPML as shareholders of the UK Fund Manager (the joint venture), which is set up for the provision of fund management services.

SG Fund Manager has an 85% stake in UK Fund Manager, while MPML holds the remainder 15%.

Under the SHA, MPML shall be entitled to take up an additional 5% stake in the JV should SRG’s assets under management reach an aggregate value of £350 million or more. MPML will also be appointed to manage and operate the new acquisitions (the three student accommodations SRG is buying) on behalf of SRG.

“The JV would enable Sunway Group to have a scalable platform to acquire additional yield accretive student accommodation in the UK and at the same time to grow its AUM,” Sunway said.

Sunway shares rose one sen or 0.59% to close at RM1.70, valuing it at RM8.38 billion. The counter saw some 6.33 million shares traded.

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KUCHING: Sunway Bhd’s (Sunway) venture into providing student accommodations in the UK has been viewed positively by analysts as the move is expected to be accretive to its diversified earnings base.

In a note on Bursa Malaysia, Sunway’s subsidiary, Sunway RE Capital Advisors (SG) Pte Ltd (Sunway RE), announced the execution of a trust deed to establish a private trust in Singapore known as Sunway Residence Trust.

The trust will acquire purpose-built student accommodations in the UK. Upon acquisition of the properties, Sunway RE will establish a fund manager in UK to provide fund management services and appoint an operator to manage the properties.

The trust will have an initialasset under management (AUM) of approximately 38 million pounds or approximately RM202 million which is expected to be injected by the end of the year.

“We are positive on the news as this provides Sunway with a new source of recurring income.

“The Trust will be investing in high quality, well located student accommodations with potential for long-term capital appreciation and recurring income that will be yield accretive to the portfolio.

“As such, we believe this to be accretive to Sunway’s diversified earnings base over the long run,” said the research team at Hong Leong Investment Bank Bhd (HLIB Research).

As the trust will have an initial AUM of approximately 38 million pounds or approximately RM202 million, it noted that its pro-forma calculation implies that net gearing would increase to 0.38-folds from 0.36-folds (as at 2Q19) post injection.

“We note that this sum will be sufficient to acquire a student accommodation located in a prime location which has been earmarked for acquisition and will be announced at a later date,” it added. All in, HLIB Research maintained its ‘buy’ call on the stock.

It explained: “Sunway remains our top pick given its well- integrated property and construction development. Its hidden gem, the healthcare business (with four new hospitals coming on stream over the next three years) has yet to be appreciated as it is embedded within the parent-co.

“These coupled with the resilient earnings from mature investment properties alongside its growing building materials business and quarry operations justifies for the re-rating of the stock.”

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In a filing with Bursa Malaysia today, Sunway said its unit Sunway RE Capital Advisors (SG) Pte Ltd had executed a trust deed with RBC Investor Services Trust Singapore Ltd. “Sunway RE Capital Advisors (SG) Pte Ltd  (SG Fund Manager) will act as a fund manager for the Trust in Singapore while RBC Investor Services Trust Singapore Ltd will act as trustee for the Trust.”

Called Sunway Residence Trust, the Trust will acquire purpose-built student accommodation in the UK via a special purpose vehicle to be set up in Guernsey. Upon the acquisition, the SG Fund Manager will establish a fund manager in the UK to provide fund management services and appoint an operator to manage the properties.

“The purpose of the Trust is to invest in high quality, well located student accommodation with potential for long-term capital appreciation and sustainable income that will be yield accretive to the portfolio,” Sunway said, adding the fund management platform will also generate recurring management fees over time.

Sunway said the establishment of the Trust will not have any effect on its share capital and substantial shareholders’ shareholding as it does not involve any allotment or issuance of new Sunway shares.

Sunway closed unchanged today at RM1.69, valuing the company at RM8.21 billion. Over the past year, the stock has gone up by 25% from RM1.35.

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