Sigma Capital has launched a £43m fund dedicated to the Scottish private rented sector.
The finance includes a £30m revolving credit facility provided from the Scottish government’s Building Scotland Fund.
It is the residential developer’s first fund targeting rental homes in the Scottish market and Sigma said a number of appraisals are currently under way.
The investor will work with a small group of construction partners and central and local government. New homes will also reflect the purchase criteria of the PRS REIT, which Sigma launched in 2017, focusing on family rental homes in regional suburban pockets.
Communities secretary Aileen Campbell said: “The private residential tenancy already offers greater security for tenants, balanced with appropriate safeguards for landlords and investors. These additional new properties to the sector can give people long-term security and the confidence they are renting from an experienced, professional management company.
“The additional long-term stability these properties provide will make a huge difference for many households, especially those wanting to create a family home and settle into a community.”
Graham Barnet, chief executive of Sigma, said: “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.”
According to the Scottish Household Survey 2017, there are an estimated 360,000 households in private rented properties. This represents an increase from 5% of households in 1999 to 15% in 2017.
Sigma results
Sigma reported net assets of £51.9m in its results for the year ended 31 December 2018. This is an increase of 30% from the previous year and includes the first full year of trading for the PRS REIT.
Its net asset value per share was up by 29% to 58.1p and pretax profit rose by 205% to £12.2m.
Barnet said: “Whilst planning delays have led us to change the mix of our development pipeline and reset our expectations for the current financial year, we still expect Sigma’s performance to improve materially over 2018, and see further growth opportunities for Sigma to grasp beyond those currently under way.”
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
