EDINBURGH, UK: Sigma Capital Group, residential development and urban regeneration specialist, has launched the Sigma Scottish private rented sector (PRS) Fund, with investment from the Scottish Government’s Building Scotland Fund.[the_ad id=”31605″]Sigma’s Scottish Fund will have initial resources of £43 million, with £30 million provided by the Building Scotland Fund in the form of a revolving credit facility and the balance provided by Sigma. Sigma’s Fund will be the first dedicated vehicle to focus on the creation of new rental homes for families in the private rented sector in Scotland and appraisals of a number of sites are currently underway.
The move into Scotland represents an extension of Sigma’s PRS property platform into a new geography, and adds further opportunity for growth. Demand for rental homes in Scotland is strong, and the Company expects to use its existing PRS model of working with a small group of construction partners and central and local government agencies to deliver PRS housing at pace.
Sigma believes that the Scottish Fund should enable the delivery of in excess of £40 million of new assets per annum in Scotland once the revolving credit facility is up to full capacity.
As with the new-build homes funded by Sigma, the properties within the Scottish Fund are intended to meet the purchase criteria of the PRS REIT plc, the real estate investment trust listed on the Main Market of the London Stock Exchange, which was created and launched by Sigma in 2017.
The PRS REIT is developing a substantial, geographically-diverse portfolio of new homes for private rental in the UK and is investing a proportion of its funds in acquiring newly-built, fully let PRS sites. The PRS REIT has no assets in Scotland currently.
According to the Scottish Household Survey 2017, which was published in September 2018, the proportion of households in the private rented sector in Scotland has grown from 5.0% in 1999 to 15% in 2017, with an estimated 360,000 households in private rented properties. Over the past 18 years to 2017, the total number of households in Scotland has increased by 13% from 2.19 million to 2.46 million. The percentage of households in owner occupation has declined from 66% in 2005 to 62% in 2017.
Graham Barnet, Chief Executive of Sigma, said: “We are delighted to be launching the Sigma Scottish PRS Fund with the support of the Scottish Government’s Building Scotland Fund. Our approach to housing delivery has been working extremely well in England, delivering thousands of new houses for the private rental market. We see significant demand for our high-quality, professionally-managed homes in Scotland and look forward to using this new fund to assist in addressing Scotland’s housing needs.”