SGM.L Regulatory News (SGM)

AIM: SGM

Sigma Capital Group plc

("Sigma" or "the Group")

Completion of

North Arran Way Development in North Solihull

and

Transfer of Remaining Fund Management Contracts

Sigma, the residential and urban regeneration specialist, is pleased to announce that construction of Smiths Wood village centre development at North Arran Way, in North Solihull, where Sigma was acting as developer, is now complete and that ownership of the development has been transferred to the buyer. As a result, the sale proceeds have been received and, after payment of an associated loan from the Government's Growing Places Fund and amounts due to the contractor, Sigma expects the net funds to be retained by the Group will be in excess of £500,000, as previously reported.

The North Arran Way property development helps to fulfil Solihull Metropolitan Borough Council's regeneration plans for a c.1,000 acre area in North Solihull. The new scheme comprises a 30,000 sq ft, two storey commercial development, with 16,000 sq ft of office accommodation and eight retail units. For this development, Sigma was responsible for obtaining planning permission and securing five key pre-lettings which generate 90% of the total income for the development, and securing the forward sale of the development. In addition, Sigma procured the construction contract and finance for the build phase of the development, negotiating a £4 million funding facility from the Government's Growing Places Fund.

As previously reported, Sigma is also providing development management services on a further village centre in North Solihull where new infrastructure is being delivered, and is assessing the viability of further commercial development opportunities. 

Sigma is also pleased to report that it has now fully exited its historic venture capital activities, with the transfer of the management of the fourth and last of the Group's venture capital funds to Shackleton Finance Limited together with the business advisory contracts of certain of the investee companies. The transfer of the management of Sigma's two university funds to a third party fund administrator has also been completed. Sigma continues to be a limited partner in all four venture funds and so retains its investment in those funds. As a result of these transfers, Sigma no longer has any funds under management.

Graham Barnet, Chief Executive of Sigma, commented,

"The North Arran Way development in North Solihull has proceeded to plan and we are delighted that the partnership with the Solihull Metropolitan Borough Council continues to deliver the Council's large scale regeneration objectives for the area. Work on further regeneration schemes for the region continues."

Enquiries

Company website: www.sigmacapital.co.uk

About Sigma Capital Group plc

www.sigmacapital.co.uk

Based in Edinburgh, Sigma is a finance, property and urban regeneration specialist. In particular, it has three unique local authority partnerships, with Liverpool City Council, Solihull Metropolitan Borough Council and Salford City Council, each ranging from 10 to 20 years' duration, which have been established to assist in the delivery of each local authority's property-related regeneration objectives.

Each partnership holds long term option arrangements with its respective local authority for a mix of residential, commercial, education and health opportunities. In total, the partnerships provide for the delivery of around 10,000 new homes, a significant number of new local retail centres, health/medical centres, schools and major retail/ mixed use commercial facilities. The total development value of the opportunities held within the three partnerships is estimated at over £2 billion.

Sigma is currently negotiating third party bank financing for the first phase of its joint venture with equity provider Gatehouse Bank plc, to deliver in phases an initial c. 2,000 new rental homes with a development cost of c. £200 million. Gatehouse is a leading London-based Shariah compliant investment bank with a real estate portfolio worth in excess of £1 billion across the UK and US. The new homes will be built on land procured and developed by Sigma and the model is underpinned by Sigma's existing local authority partnerships. If fully developed, the joint venture will deliver up to c. 6,600 new rental homes in the UK, with a total development cost estimated at c. £700 million.

About the North Solihull Partnership

The partners of the North Solihull Partnership are Solihull Metropolitan Borough Council, Bellway Homes, West Mercia Housing Association and Sigma Inpartnership Ltd, a subsidiary of Sigma. The North Solihull Partnership's remit is to coordinate and deliver the regeneration of an area of circa 1,000 acres in North Solihull. This project commenced in 2007 and has an anticipated 20 year life cycle to deliver new and replacement housing stock, ten new primary schools and five new village centres incorporating neighbourhood retail facilities with new medical and council facilities. Sigma's key role is the provision of development management services, including strategic development planning, coordination and procurement of development works and general development management in return for agreed fees for these services. Thereafter there are specific sites which Sigma has the right to develop directly on a commercial basis.