Sigma, the Private Rented Sector (“PRS”) specialist, is pleased to announce the launch of the first phase of a self- funded portfolio of at least 225 new rental homes with a total development cost of approximately £25 million. The first site comprises a £5.8 million development of 49 new PRS homes, with the subsequent balance of 176 homes built and let over the course of 2016.
The move follows a share placing, approved by shareholders on 2 September, to support Sigma’s objective of creating a substantial portfolio of self-funded PRS assets, leveraging the PRS infrastructure and relationships it has already established. As previously reported, the initiative complements Sigma’s existing joint venture agreements which are targeting the delivery of in excess of 10,000 new homes.
The 49 new rental homes will be located at a single site in Merseyside and will mainly comprise three bedroom family residences. Construction is expected to be fully completed by the end of July 2016 and, once fully let, the 49 new homes are expected to generate a gross annual rental income of circa £0.42m.
Two further sites, in Greater Manchester, have been identified to complete this initial phase. These are expected to commence during the first quarter of 2016 and will take the total number of new PRS homes to approximately 225. All three sites are expected to be completed and let by the end of 2016, fully utilising the capital raised by the share placing.
As previously stated, Sigma intends to put in place appropriate gearing to allow further sites to be acquired and commenced during 2016. The Company is targeting a portfolio of c.550 new rental homes with a total development value of in excess of £60 million by the end of 2017.
Graham Barnet, Chief Executive of Sigma, said:
“I am delighted to be launching the first phase of construction of our own self-funded new homes for the private rental market. We are using our existing PRS platform to create a substantial portfolio of PRS assets on our own balance sheet. We are initially targeting 225 new family homes across Greater Manchester and Liverpool, to be completed and let by the end of 2016 with further sites being started during the year. Our wider initial target is a portfolio of 550 new rental homes by the end of 2017.
This move marks an important step in Sigma’s ongoing development and complements our existing PRS joint venture agreements.”