Sigma extends Gatehouse PRS deal

The social rented housing specialist active in the North West has raised the ambition of its private rented sector joint venture with Gatehouse Bank from 6,600 units to 10,000 units to be delivered over the next five years.

Sigma said in a statement to the London Stock Exchange: “The new agreement augments the existing arrangement and now targets up to 10,000 new PRS homes to create a £1bn portfolio over the next five years. This reflects both the initial success of the first phase with Gatehouse, which commenced in November 2014, and the confidence of both parties in market demand.

“As previously announced, the first phase is already under way, targeting 927 new homes across 14 sites in Greater Manchester and Merseyside with a total development cost of around £106m. It is currently ahead of schedule with a quarter of the units already built or under construction. Gatehouse Bank is now looking to deploy further capital into a second phase, followed by a regular rolling programme of investment to create a £1bn portfolio. Phase two discussions are well advanced, with the next sites identified.”

The statement continued: “The new arrangement allows Sigma to plan the geographic expansion of the portfolio systematically and to deliver the subsequent phases more quickly and efficiently. This expanded PRS portfolio is being procured as before with our house building partner, Countryside Properties, and lettings management partner, Direct Lettings. A dedicated lettings brand, Difrent, has been established for the Gatehouse portfolio as we look to create one of the largest cohesive PRS portfolios focused on family homes in the UK regions over the next five years.”

Shares in Sigma were up 7p to 77p.

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I’m glad that the stock market approves. I wonder what the residents think of these houses, whether they think they are good enough to live in long term, whether they are competently managed and whether they contribute to the sustainable regeneration of their community rather than just being built on the cheap. That’s the acid test, not whether they deliver a high return to Sigma’s investors (though that is part of the process).

By PRS watch

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