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Sigma expands £1 billion PRS finance

Urban regeneration specialist Sigma has expanded its arrangement with Gatehouse Bank, to finance its expanding rental homes portfolio. Gatehouse will now support Sigma towards a larger target of 10,000 rental homes, to be developed over the next five years.

Sigma, which is listed on the AIM junior stock market, is already under way with a first phase of homes across Merseyside and Greater Manchester, investing around £106 million. A quarter of the planned 927 homes are already built or under way, with the first tenants having moved in to their homes in February 2015.

Sigma is working with Countryside Properties to deliver the homes, and is working with Direct Lettings (part of Shepherd Direct and linked to the Century 21 estate agency chain) to arrange rentals. It has also created DifRent, a lettings brand as its customer facing name.

“This is a significant moment for Sigma, which brings to fruition the work we have done with our local authority partners, Gatehouse Bank, Countryside and Shepherd Direct to establish our Private Rented Sector model,” said Sigma chief executive Graham Barnet.

“I would like to express our thanks to all our partners for their support. We see considerable potential to create one of the largest new build privately rented residential portfolios in the UK and I am delighted that construction of the first phase of over 900 new homes for rent across Greater Manchester and Liverpool is now starting.”
“We believe the joint venture with Gatehouse and our new partnership with Grainger plc firmly establishes blueprints for further large scale housing programmes across cities throughout England with other partners and additional local authorities.”

Grainger and Sigma agree PRS joint venture

Listed residential property company Grainger has signed a strategic partnership with Sigma Capital Group that will see the pair build a major private rented sector portfolio around the UK. The four year agreement could see thousands of new homes assembled for rent, under the Grainger brand, many of them outside London in cities around the UK.

Sigma is already familiar to local authorities as it has three partnership agreements in Liverpool, Salford and Solihull, responsible for delivering a mix of residential and commercial properties. The company was founded in 1996 and was listed on the AIM market in 2000.

“The creation of this strategic partnership with Grainger is tremendously exciting and another milestone development for Sigma as it positions itself as a major presence in the delivery of high quality new homes for the rental sector,” said Sigma chief executive Graham Barnet.

“The partnership enables us to accelerate the delivery of large scale PRS schemes throughout the UK, particularly in England’s major cities outside London. This acceleration of our activities will help further expand the breadth of opportunity with our partners as we deliver on this. The combination of Grainger’s funding ability and asset and property management expertise, and our local authority relationships and development management skills, brings gains to both sides – as well as to our associated partners. We are already appraising our first schemes.”

Back in February, Sigma agreed terms to buy its first London site for a PRS project, at Barking Riverside. The site has the potential to accommodate 318 apartments for rent, in four new apartment blocks. And in November 2013, Sigma agreed a joint venture with Gatehouse Bank to help fund the growth of a private rented sector portfolio.

Grainger brings substantial property management experience to the deal. It has a portfolio of around 4,000 homes the company manages, let under regulated tenancies. In Germany, the company owns and manages around 3,000 homes with a further 3,000 in a joint venture with investor Heitman.

“This agreement leverages both Sigma’s excellent relationships with Local Authorities and housebuilding partners across the UK and Grainger’s proven track record in managing residential property, whilst providing an innovative new avenue for investment,” said Grainger chief executive Andrew Cunningham. “We are at the forefront of the private rented sector and remain committed to delivering high quality new homes, benefitting local communities whilst delivering shareholder value.”