Housing investment specialist completes £11.7m deal for rented accommodation site
Urban regeneration and PRS (private rented sector) specialist, Sigma Capital Group has announced the sale of a completed development site to Manchester-based real estate investment trust The PRS REIT plc for around £11.7m.
Sigma, also based in Manchester, announced a forward contract with the PRS REIT over a further site.
The completed PRS development site is located in Salford, Greater Manchester, and consists of 73 newly-built properties for the family rental market.
The properties comprise a mixture of two, three and four bedroom family homes and together provide a rental income of around £700,000 per annum.
Prior to its sale, the site was independently valued by Savills on behalf of the PRS REIT.
In addition, a forward contract over a site near Wakefield has been agreed with the PRS REIT.
The site, once completed, will comprise 72 new homes, and is expected to yield a rental income of around £600,000 per annum. Its gross development cost (GDC) is around £9.2m.
Including the Wakefield site, Sigma has five PRS sites at various stages of development.
These sites, once completed, will deliver circa 280 new family rental homes for a GDC of approximately £46.3m and will provide an estimated rental value of about £2.85m per annum.
Besides Wakefield, the other development sites are at Harlow in Essex, Nuneaton in Warwickshire, Telford in Shropshire, and Wigan in Greater Manchester.
All the sites are under forward contract for acquisition by the PRS REIT once completed and let.
The PRS REIT retains exclusive access to Sigma’s PRS platform and is sourcing up to a maximum of a third of its portfolio through the purchase of completed PRS development sites.
In a separate announcement today, The PRS REIT revealed that it has signed contracts over nine additional PRS sites, including the Sigma site.
Seven are development sites, with construction already under way at some sites. The remaining site is the Wakefield site.
The nine sites are expected to deliver approximately 775 additional new family homes and provide a forecast £6.7m per annum in rental income once completed and let.
The GDC of these sites is approximately £107.7m.
These new sites take the total number of sites that are either completed or contracted to 42, and the total number of new rental homes to about 3,575, once fully built.
The total GDC of these sites is approximately £530m, and the new homes are expected to generate a combined rental income of £33.2m per annum once completed and let.
The PRS REIT will issue its quarterly report for the three months to December 31, 2018 by mid January and will declare the interim quarterly dividend relating to this quarter at the end of January.
