Sigma Capital raises £20m to build new homes in the region
REGENERATION specialist Sigma Capital Group has raised £20m through a share placing to develop family homes across up to eight sites, starting with Greater Manchester and Liverpool.
The listed investment firm, based in Edinburgh, was given the green light to build 1,000 new homes for rent in Liverpool back in May and construction of the new rental homes will start in early 2016.
It expects the eight sites to produce net income in excess of £2m a year and an indicative £13m of capital uplift.
It added that there will be around £50m of gross development cost in the first 18-24 months following the deployment of funds from the placing, supplemented by the company’s existing and generated cash resources, utilising moderate leverage of approximately 55% loan to value on completed income generating assets.
At the end of the development phase of these assets, the company will recycle capital and income for further development opportunities.
Graham Barnet, chief executive of Sigma said: “I am delighted to announce this successful fundraising, which has been supported by new as well as existing investors. It will enable us to build our own substantial PRS portfolio, capitalising on the infrastructure and relationships we have spent the last three years putting in place for large scale PRS.
“We are already deploying this platform successfully with Gatehouse with the first phase of 927 PRS homes well underway. The development of our own portfolio will significantly enhance returns and generate additional material long-term recurring income.
“This has been a long term aim for Sigma and the Placing marks an important step in the ongoing development of Sigma. There is an urgent need for new housing in the UK and we look forward to developing our own PRS assets as well as continuing to deliver new rental homes under our partnership model.”
