LONDON (Alliance News) - Sigma Capital Group PLC Friday said the first tenants are now moving into the first completed new homes under its private rented sector joint venture with Gatehouse Bank PLC.
Sigma Capital agreed to create a government-backed joint venture with the Shariah compliant bank to build up to 6,600 new homes on land earmarked for regeneration by UK local authorities in November 2013. In November 2014, it said the venture had started building an initial phase of 927 new rental homes in Greater Manchester and Liverpool.
On Friday, it said the new tenants have started moving into a mix of two, three and four bedroom homes in Norris Green, Liverpool and Lower Broughton, Salford.
"As well as the first tenants moving in, ongoing rental demand is strong and the majority of properties scheduled for release over the coming months have already been pre-let or reserved," it said.
The whole private rented sector portfolio will be built across 14 sites in the North West, on land procured and developed by Sigma through its existing local authority partnerships with Liverpool City Council and Salford City Council, and its housebuilding partner, Countryside Properties (UK) Ltd.
Construction is currently underway on six of the 14 sites, with the development of the remaining sites scheduled to begin by early June 2015, Sigma said.
Under the terms of the joint venture Sigma earns an initial upfront fee when construction starts, and then a development management fee paid quarterly over the duration of the delivery period. On completion, Sigma will earn a quarterly asset management fee, with all fees based on the development cost. Sigma will also retain a share of the net disposal profits on the assets, subject to a minimum return to investors.
Sigma Capital shares were down 1.6% at 60.00 pence Friday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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