SLB Development acquires 20% stake in UK fund management business

SINGAPORE (June 16): SLB Development, the property development subsidiary of construction firm Lian Beng Group, has exercised its option to subscribe to a 20% equity stake for £90,000 (S$157,322) in Pinnacle Investment Management Limited, a fund management subsidiary of UK-based Pinnacle Investments Limited and Pinnacle Group Limited.

The fund aims to build a series of funds focused on the private rented sector (PRS) across the UK.

SLB Development made its first investment into the Pinnacle Residential Fund, which is managed by Pinnacle Investment Management Limited in October 2019.

“The diversification of our business into fund management has proven to be a winning strategy through the creation of new and recurring income streams for sustained growth,” says Matthew Ong, executive director and CEO of SLB.

“We are pleased to be able to leverage on our partnership with Pinnacle Investments, because of their strong expertise and specialised knowledge of the UK property development market. We believe that our continued investments into the UK’s Private Rented Sector is aligned with our objective of seeking out prudent investment opportunities which will provide a steady source of recurrent income in the years to come,” he adds.

According to Knight Frank, the UK PRS is projected to reach £75 billion by 2025. Tenant demand is seen to continue to “exert upward pressure” on rental values in this market, with growth forecasted at 10% over the same period.

Even with the Covid-19 outbreak, this market has proven resilient, says another property consultancy Savills, which predicts that there will likely be no significant impact on rental values in the short-term.

“The UK PRS, backed by strong fundamentals underpinned by demographic growth and favourable supply-demand dynamics, has been a steady source of income even in tough times,” says Ong.

On June 4, SLB, along with 32 Holdings, and 32 Real Estate executed a subscription and shareholders’ agreement with Wee TC Investments (WTCI), an investment holding company wholly-owned by Wee Teng Chuen, the son of Wee Ee Cheong, the CEO of UOB.

As at 12.49pm, SLB shares are changing hands flat at 11.1 cents.

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