Newcastle-based residential developer Grainger has signed an agreement with Sigma, which has offices in Manchester and Liverpool, to deliver regional private rented sector developments.
Shares in the two listed companies rose slightly on the news, which was described in a joint statement as "a major strategic partnership" to build a portfolio outside Greater London.
The statement said: "Under the terms of the agreement, Sigma has granted Grainger the exclusive option for an initial four-year term to acquire development opportunities of 100 units or more sourced by Sigma. Grainger will appraise each development opportunity individually and a number of sites have already been identified that Sigma and Grainger are looking to progress. Sigma has created a significant pipeline of opportunity through its strong local authority relationships and house building partners, which can be utilised over the course of the relationship with Grainger.
"At present, Grainger expects to fully own the initial developments sourced by Sigma, although in the future it may also seek to syndicate its investment to third party investors, including Sigma. In addition to sourcing development opportunities, Sigma expects to act as development manager on the majority of projects. Sigma will earn a profit share on each housing development, split into a sourcing fee and a development management fee."