Gatehouse Bank and Sigma Capital commence construction of largest Private Rented Sector development in the UK
Gatehouse Bank plc (“Gatehouse”), the London-based investment bank specialising in Shariah-compliant products and services, is pleased to announce that its Private Rented Sector (“PRS”) joint venture with Sigma Capital (“Sigma), the residential and urban regeneration specialist, is commencing construction of an initial 927 new rental homes with a total development cost of approximately £100 million, this week, creating one of the first and largest PRS platforms in the UK.
This follows the agreement of up to £67 million of bank financing from Barclays Bank plc which supplements equity of approximately £47 million provided by Gatehouse. The initial phase of construction is part of a wider proposal with Sigma to create a portfolio of new build privately rented residential properties across multiple sites in the UK.
As previously reported, the new homes will be built on land procured and developed by Sigma through its existing local authority partnerships with Liverpool City Council and Salford City Council and its house building partner, Countryside Properties (UK) Ltd. The 927 new homes will comprise a mix of high quality family homes and apartments and will be constructed across 14 sites in the North West - 10 in Greater Manchester and four in the Liverpool area. The new homes will be built by Countryside Properties (UK) Ltd and construction is scheduled to be completed in approximately two years. Direct Lettings Limited (part of the Shepherd Direct Group), with whom Sigma has a well-established association, will manage all lettings.
Further phases
Sigma is also exploring with Gatehouse efficient financial structures for the delivery of further phases of new homes.
Scott Nicol, Vice President of Real Estate Investment at Gatehouse Bank, commented: “We are delighted to be embarking on the first phase of our new JV with Sigma to roll out in excess of 900 new private rented homes across 14 sites located in Liverpool and Manchester. The complexity of creating a debt and equity funded, institutional scale, private rented platform from scratch hasn’t been an easy task and therefore this transaction is a milestone for the JV and also for the sector in general. The importance of the sector is becoming increasingly more critical as the supply and demand imbalance of quality in UK housing stock continues. The JV will play its part in addressing the imbalance to deliver affordable, sustainable, efficient homes in scale and in areas where they are most needed”
Henry Thompson, Chief Executive of Gatehouse Bank, commented: “We are delighted with the progress we’ve made in creating one of the UK’s first and largest portfolios of privately rented homes, aimed at tackling housing demand and need. This joint venture with Sigma is in line with our objectives both to partner with experienced sector operators and to build a private rental residential portfolio.”
Graham Barnet, Chief Executive of Sigma, commented: "This is a significant moment for Sigma, which brings to fruition the work we have done with our local authority partners, Gatehouse Bank, Countryside and Shepherd Direct to establish our Private Rented Sector model. I would like to express our thanks to all our partners for their support.
We see considerable potential to create one of the largest new build privately rented residential portfolios in the UK and I am delighted that construction of the first phase of over 900 new homes for rent across Greater Manchester and Liverpool is now starting.
We believe the joint venture with Gatehouse and our new partnership with Grainger plc firmly establishes blueprints for further large scale housing programmes across cities throughout England with other partners and additional local authorities.”
The Rt Hon Greg Clark MP, Minister of State for Universities, Science and Cities, said: “Further to the Prime Minister’s statement on the forming of the Sigma Capital Group PLC and Gatehouse Bank’s joint venture I welcome the announcement of the first PRS homes to start on site in Liverpool, Salford and Greater Manchester.
This is a sure sign of investment flowing into cities in the north of England, building much needed housing through this growing form of tenure and delivering new construction which contributes to the local economy, creates jobs and delivers more homes for hardworking people.
I also welcome the announcement by Sigma and Grainger PLC last Monday which will add substantial new homes to cities in the Midlands and the North of England through the creation of a well-managed rental portfolio.”