This article first appeared in The Edge Financial Daily on October 17, 2019 - October 23, 2019

KUALA LUMPUR: Sunway Bhd is establishing a private trust in Singapore with an initial £38 million (RM204.2 million) of assets under management that focuses on purpose-built student accommodation in the UK.

In a filing with Bursa Malaysia yesterday, 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 a trustee of 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 that 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 yesterday at RM1.69, valuing the company at RM8.21 billion. Over the past year, the stock has gained a fourth from RM1.35.