TIDMSGM
RNS Number : 1542L
Sigma Capital Group PLC
11 January 2021
AIM: SGM
SIGMA CAPITAL GROUP PLC
("Sigma" or the "Company")
The private rented sector ("PRS") and urban regeneration
specialist
Share of profit on sale of Thistle PRS Portfolio
Sigma, the PRS, residential development and urban regeneration
specialist, is pleased to announce the successful realisation of
its beneficial interest in the Thistle Portfolio of 918 suburban
family PRS homes, which was created for clients of Gatehouse Bank
("Gatehouse Bank") ("Thistle Portfolio"), following its sale. After
completion, Sigma will receive a total net cash payment of
GBP2.9m.
The GBP2.9m represents Sigma's share of total sale profits after
certain hurdles. It stands at 53% above the book value of GBP1.9m
ascribed to Sigma's beneficial interest in the Thistle Portfolio in
the Company's last published report and accounts.
The Thistle Portfolio was created for Gatehouse Bank by Sigma
alongside its initial delivery partner, Countryside Properties, and
was developed and managed through Sigma's PRS platform. Sigma
management believes that it was the UK's first large-scale
portfolio of new single-family houses developed for the private
rental market, with a gross development cost of c.GBP110m.
Its sale for a total consideration of c.GBP150m to Goldman Sachs
Merchant Banking Division and Pitmore marks the first significant
sale in the UK of a portfolio of new-build, single-family suburban
PRS houses, and provides market evidence for the current and future
valuation of the Company's assets, both on its balance sheet and
managed for external parties.
The Thistle Portfolio generates approximately GBP8.3m per annum
in rental income. It comprises 918 high-quality single-family homes
(mainly houses), designed by Sigma for the private rental market.
Homes are located across 15 sites sourced by Sigma in the North
West of England, predominantly in Merseyside and Greater
Manchester. As with other Sigma PRS sites, they are well-located
with access to good schooling, transport links and other amenities.
Construction of the portfolio commenced at the end of 2014 and was
completed to budget in March 2017.
The Thistle Portolio has consistently generated attractive
returns above original expectations, with average occupancy over
99% and rent collection in excess of 98%. This includes during the
Covid-19 pandemic and is in line with the performance of Sigma's
own assets and The PRS REIT plc's existing PRS portfolio of 3,163
family homes, which Sigma created and manages. It also reflects the
dynamics of strong rental demand, high build-quality, well-chosen
locations and enhanced customer service levels.
Ian Sutcliffe, Chairman of Sigma Capital Group plc,
commented:
"This highly successful sale of what we believe is the UK's
first large-scale build-to-rent portfolio of single-family homes
validates Sigma's strategy and demonstrates the value that our
model is capable of creating. High quality, professionally-managed
rental housing remains undersupplied and, as pioneers in the
build-to-rent sector, we continue to be tremendously encouraged
about future prospects."
Graham Barnet, CEO of Sigma Capital Group plc, commented:
"This portfolio, created and delivered by Sigma for clients of
Gatehouse Bank, was our first large-scale development for the
private rental market, and the first development of its kind in the
UK. It proved the effectiveness of our PRS platform, which, since
2014, has delivered over 4,800 new family rental homes across
England both for institutional investors and ourselves, with in
excess of 2,000 further homes under way across the regions and
London.
"We are delighted that the portfolio has yielded significant
value to our partners and our own interest while fulfilling a
fundamental social good - providing high-quality rental homes for
families."
Enquiries:
Sigma Capital Group Graham Barnet, Chief Executive T: 020 3178 6378 (today)
plc
Mike McGill, Group Chief Financial T: 0333 999 9926
Officer
KTZ Communications Katie Tzouliadis, Dan Mahoney T: 020 3178 6378
N+1 Singer James Maxwell, James Moat, T: 020 7496 3000
(NOMAD and Broker) Sebastian Burke
NOTES TO EDITORS
About Sigma Capital Group plc
www.sigmacapital.co.uk
Sigma Capital Group plc ("Sigma") is a PRS, 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. The Company 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.
Sigma has created an unrivalled PRS platform, which sources
sites and brings together construction resource to develop them,
enabling Sigma to deliver an integrated solution to partners. As
well as sourcing sites and managing all stages of the planning and
development process, Sigma also manages the rental of completed
homes through its award-winning rental brand, 'Simple Life'.
The Company's subsidiary, Sigma PRS Management Limited, is
Investment Adviser to The PRS REIT plc. In September 2020, the
Company launched a joint venture with EQT Real Estate, the real
estate platform of global investment firm EQT to establish a GBP1bn
portfolio of high quality, new-build homes for private rental in
Greater London.
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