Five cities have been targeted – Dundee, Edinburgh, Inverness, Perth and Stirling – following the agreement between Scottish housebuilder Springfield Properties and Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist.
The move follows the launch earlier this year of the Sigma Scottish PRS Fund – the first dedicated vehicle to focus on the creation of new homes for the private rental market in Scotland. It has initial resources of £43 million, with £30m provided by the Scottish Government’s Building Scotland Fund.
Under the new agreement, Springfield will build family homes for Sigma’s PRS property platform, with the majority of them to be built in the former’s “village” developments.
Graham Barnet, chief executive of Sigma, said the partnership would target the construction of hundreds of new homes for families across the five cities. Once built, the homes will be let under Sigma’s Simple Life lettings brand.
He added: “Springfield has a well-established reputation for delivering quality homes in Scotland and this partnership brings significant benefits for both sides, especially in accelerating the rate at which mixed tenure sites can be developed.
“We look forward to working with Springfield as we develop the partnership and extend our model in Scotland.”
Springfield Properties chief executive Innes Smith said: “We are proud to be chosen by Sigma as their first partner in Scotland to deliver homes for the private rented sector.
“This agreement stands to accelerate our delivery of homes, particularly on village developments, and we expect it to provide a further revenue stream, alongside our existing private and affordable housing activity, with good visibility over cash flows.
“It will also increase the number of homes available in the private rented sector and contribute towards our goal of ensuring that everyone within Scotland has a great place to live.”
Earlier this month, Sigma provided an upbeat outlook for the year and hailed its push into the Scottish private rented sector after revealing solid first-half numbers. Until recently, the firm had been focused on property projects and investments south of the Border.
Barnet said that market fundamentals remained strong with high levels of demand for quality, family-sized rental homes from workers on moderate incomes.
The interim results showed that revenues in the six months to 30 June increased by 19 per cent to £5.8m. Profit before tax for the period rose by 3 per cent to £4.3m. Sigma said the second half of the year had started well.