Monday, November 10, 2014
Sigma, the residential and urban regeneration specialist, today announces that it has entered into a major strategic partnership with Grainger plc (“Grainger”), the UK’s largest listed residential property owner and manager, to create a large-scale Private Rented Sector (“PRS”) portfolio across the key cities of England outside Greater London. 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.
As announced in Sigma’s half yearly report published on 30 September 2014, funding discussions for the proposed roll out of Sigma’s PRS joint venture with Gatehouse Bank plc continue and an update will be provided before the end of November. The Joint Venture with Gatehouse is complementary to and in addition to this partnership with Grainger.
Graham Barnet, Chief Executive of Sigma, commented,
“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.
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 and look forward to rolling out this programme with our new partner, Grainger, in due course.”
Andrew Cunningham, Chief Executive of Grainger Plc, said,
“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. 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.”
Sigma Capital Group plc
Graham Barnet, Chief Executive
Marilyn Cole, Finance Director
T: 0131 220 9444
Katie Tzouliadis/ Deborah Walter
T: 020 3178 6378
James Maxwell/ Ben Griffiths
T: 0207 496 3000
About Sigma Capital Group plc
Sigma is a finance, residential development and urban regeneration specialist, with offices in Manchester, London and Edinburgh. It has a well-established track record in assisting with property-related regeneration projects in the public sector, acting as a bridge between the public and private sectors. Sigma’s principal focus is now on the delivery of large scale housing schemes, initially for the Private Rented Sector (“PRS”).
About Grainger plc
Grainger plc is the UK’s largest listed residential property owner and manager, with c £2.8bn of residential assets under management across the UK and Germany. Grainger generates income through:
• Sales of properties when they achieve optimum valuations
• Rent from its portfolio of tenanted properties
• Fees for the management of residential properties and the provision of its expert services to select third party clients.
Additionally, Grainger is a leading provider of equity release products through its award-winning subsidiary brand, Bridgewater Equity Release.
Grainger was established in 1912 in Newcastle upon Tyne, where it remains headquartered. Grainger is a constituent of the FTSE 250 on the London Stock Exchange and the FTSE4Good index. Grainger was awarded the UK’s Residential Asset Manager of the Year at the RESI Awards in 2014, 2013 and 2012.