Sigma taps into Scottish rental market with major fund

Sigma Capital Group, the residential development and urban regeneration specialist, is pushing into the Scottish private rented sector with the launch of a dedicated £43 million fund.

Graham Barnet says firm's approach to housing delivery has been working extremely well in England. Picture: Paul Dodds

The Edinburgh-headquartered firm has been largely focused on property projects and investments south of the Border but said demand for rental homes in Scotland was strong.

Its Scottish PRS Fund will have initial resources of £43m, with £30m provided by the Scottish Government’s Building Scotland Fund in the form of a revolving credit facility and the balance provided by Sigma.

The firm, which also has offices in Manchester and London, claimed the fund would be the “first dedicated vehicle to focus on the creation of new rental homes for families in the private rented sector in Scotland”. Appraisals of a number of sites are currently underway, it added.

Chief executive Graham Barnet 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.”

Communities Secretary Aileen Campbell added: “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.

“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.”

Sigma said that it expects to use its existing private rented sector model of working with a small group of construction partners and central and local government agencies to “deliver housing at pace”.

News of the launch of the fund came as the company posted a 181 per cent surge in full-year revenues to £12.5m with profit before tax jumping 205 per cent to £12.2m.

Results were boosted by the first full 12-month impact of earnings related to the PRS REIT real estate investment trust.

The board is proposing a dividend of 2p per share.