SGM.L Regulatory News (SGM)

29 April 2019

AIM: SGM

Sigma Capital Group plc

("Sigma" or "the Company" or "the Group")

Launch of Sigma Scottish PRS Fund

Sigma, the private rented sector ("PRS"), residential development and urban regeneration specialist, is pleased to announce the launch of the Sigma Scottish PRS Fund ("the Scottish Fund" or "the Fund"), with investment from the Scottish Government's Building Scotland Fund. Sigma's Scottish Fund will have initial resources of £43m, with £30m 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 £40m 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 ("PRS REIT" or "REIT"), 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.

The Company wishes to thank the Building Scotland Fund for its support in helping to launch Sigma's PRS model in Scotland, and for its direct backing with credit facilities. Sigma's management has a long history of delivering housing in Scotland and looks forward to using the Fund to assist in addressing Scotland's housing needs as it rolls out Sigma's brand of family rental homes in Scotland.

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 five per cent in 1999 to 15 per cent 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 per cent from 2.19 million to 2.46 million. The percentage of households in owner occupation has declined from 66 per cent in 2005 to 62 per cent in 2017. 

Communities Secretary, Aileen Campbell, said:

"Renting accommodation is becoming a long-term option for many people, at many stages of life, for example when starting a family or when retiring. We want everyone who rents to be able to live in a house that suits their needs and in an area where they want to live, including near family, friends or schools. 

"We want people to have the security to make that house their home - whether they are looking for a house for three years or thirty years. 

"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:

"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."

Enquiries:

NOTES TO EDITORS

Building Scotland Fund

The Building Scotland Fund (BSF) is available to non-public sector organisations including businesses, housing associations and universities, to support the development of housing across all tenures, develop modern industrial and commercial property; and support business-led research and development projects. The BSF is a precursor to the Scottish National Investment Bank and reflects the principles behind it.

About Sigma Capital Group plc(www.sigmacapital.co.uk)

Sigma Capital Group plc ("Sigma") is a private rented sector, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma's principal focus is on the delivery of large scale housing schemes for the private rented sector. It has a well-established track record in assisting with property-related regeneration projects in the public sector, acting as a bridge between the public and private sectors. Its subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc.

 About The PRS REIT plc(www.theprsreit.com)

The PRS REIT is a closed-ended real estate investment trust established to invest in the Private Rented Sector and to provide shareholders with an attractive level of income together with the potential for capital and income growth. It has raised a total of £500m (gross) through its Initial Public Offering, on 31 May 2017, and a subsequent placing in February 2018. Its current available gross resource amounts to £700m including gearing, and this is expected to increase to £900m with further debt facilities. Both of The PRS REIT plc's equity fundraisings were supported by the UK Government's Homes England with direct investments.

About Sigma PRS Management Limited

Sigma PRS Management Limited is a wholly-owned subsidiary of AIM-quoted Sigma Capital Group plc and is Investment Adviser to The PRS REIT plc. It sources investments and manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager ("AIFM") and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc's Investment Policy. The Investment Adviser is an appointed representative (reference number: 776293) of the AIFM.