A joint venture between Gatehouse Bank and Sigma Capital is starting construction on 927 homes for the private rented sector this week, on 14 sites across Salford and Liverpool.
The total development cost is £100m, and follows the agreement of up to £67m of bank financing from Barclays alongside around £47m of equity provided by Gatehouse.
Gatehouse's partnership with Sigma was first announced in November 2013. Gatehouse is a London-based Shariah compliant investment bank with a £1bn property portfolio. The initial phase of construction is part of a wider proposal with Sigma to create a portfolio of up to 2,000 build privately rented residential properties across multiple sites in the UK.
The new homes will be built on land procured and developed by Sigma through its existing local authority partnerships with Liverpool City Council and Salford City Council and its housebuilding partner, Countryside Properties.
The 927 homes will be a mix of family homes and apartments and will be constructed across 10 sites in Salford and four in the Liverpool area.
Construction is scheduled to be completed in around two years. Direct Lettings will manage all lettings.
Sigma said it was also exploring with Gatehouse efficient financial structures for the delivery of further phases of new homes.
Earlier this month Sigma announced an agreement with residential developer Grainger to deliver development opportunities of 100 homes or more across the North and the Midlands. Grainger would own the schemes, which would be sourced by Sigma.
Graham Barnet, chief executive of Sigma, said: "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. I would like to express our thanks to all our partners for their support.
"We believe the joint venture with Gatehouse and our new partnership with Grainger firmly establishes blueprints for further large scale housing programmes across cities throughout England with other partners and additional local authorities."