Savills IM Sets Up $241M UK Build-to-Rent Fund With ARA’s Lim Family

Savills Investment Management has launched its second UK-focused fund backed by the family office of ARA Asset Management founder John Lim, this time for a build-to-rent development strategy.

The fund aims to raise £200 million ($241 million) for development of high-quality, professionally managed housing stock in the underserved UK market, Savills IM said Thursday in a release. The strategy will leverage the research and brokering capabilities of the residential team at Savills IM’s London-headquartered parent firm.

The cornerstone investor of the latest fund is The Land Managers, which serves as the real estate investment division of the Singapore-based JL Family Office. The Land Managers is also invested in Savills IM’s 2021-vintage UK retail park fund alongside Straits Real Estate, the property investment unit of The Straits Trading Company conglomerate.

“TLM’s strategy is to increase our exposure to defensive assets that benefit from long-term structural supply and demand dynamics, and the build-to-rent residential sector in the UK is one such sector that we are very optimistic about,” said Andy Lim, who is group CEO of the JL Family Office, the founder of The Land Managers and the son of John Lim.

Local Advisory Acquisition

The fund launch coincides with Savills IM’s acquisition of UK residential sector specialist Pitmore. Founded in 2012 by Vittorio Davico, Pitmore will advise Savills IM on some of the largest housing development sites in Britain, with potential gross development value of more than £3 billion.

Savills IM CEO Alex Jeffrey said the Pitmore acquisition and the partnership with The Land Managers align with the fund manager’s objective to deepen specialist operational expertise in sectors with strong long-term prospects like residential.

“We have great faith in the capability of the Pitmore team and we welcome them to Savills IM,” Jeffrey said. “We are delighted to be working again with TLM.”

The build-to-rent vehicle will develop and forward-fund both single and multi-family residential assets, with a focus on regeneration areas and master-planned schemes that display characteristics like favourable renter demographics, supply-demand imbalance and access to growing employment hubs.

Longtime Partnership

Savills IM, with assets under management totalling €26.9 billion ($26.9 billion), has undertaken four funds with The Land Managers and its shareholders as seed investors over the last eight years, according to Michael J Flynn, co-head of client capital at Savills IM.

Last October, the partners teamed with Straits Trading with an eye towards raising £360 million ($500 million) for what they termed a “contrarian” UK retail park fund.

The UK Value Boxes strategy exploits the mismatch between the strong operating performance of British retail parks and their relatively low property prices and high yields compared with other sectors.

The fund, which is managed by Savills IM UK head Harry de Ferry Foster, announced its first acquisitions in April with the purchase of four retail parks for £75 million ($97.6 million).