Shares of Edinburgh-based Sigma Capital Group rose about 5% as the rented housing developer announced a new strategic partnership with regeneration firm Keepmoat to deliver 5,000 new private rented sector (PRS) homes with a potential investment value of £800 million across England by 2021.
Construction on the first site is due to start in summer 2016.
The partnership, Keepmoat’s first development activity in the PRS market, will deliver two, three and four bedroom properties in locations across the North East of England, Yorkshire and the East Midlands.
Sigma said it will manage investment and lettings while Keepmoat will procure the land and take the lead on the design, planning and building processes.
“The relationship with Keepmoat significantly increases Sigma’s construction resource, access to land and geographic reach as the company seeks to deliver high quality family homes for rental, in large scale, across the regions in England,” said Sigma in a statement.
“The new partnership complements Sigma’s long term relationship with Countryside Properties plc as well as its existing PRS platform and other relationships.”
Sigma chief executive Graham Barnet said: “I am delighted to announce our partnership with Keepmoat, which has grown out of our previous relationship with them, and our continued expansion in the PRS sector.
“We are very pleased that Keepmoat has chosen to work with Sigma in its first development activity in the PRS market, and believe that it underscores Sigma’s success in the PRS sector.
“In line with Sigma’s strategy, this partnership will enable us to expand into other parts of the UK, where currently we do not have coverage.
“It also complements our existing partnership with Countryside Properties by significantly increasing our construction resources and providing further access to land assets in geographies not served by our existing partners.
“This additional resource will help realise our ambitions to deliver PRS housing across all of the key economic regions in the UK.”
Keepmoat chief executive Dave Sheridan: “This is a significant milestone for our business, and we are proud to be working alongside Sigma to scale-up their PRS growth ambitions.
“The partnership will deliver great quality market rented homes alongside our Keepmoat homes for sale, which will allow the pace of housing delivery on strategic sites to be increased, to deliver the Government’s aspirations and provide people across the country with much-needed housing options.
“There is an inherent need for more housing across the country, and we are looking to tackle the issue head on.
“Sigma came to us because of our national capability, our great quality product and our efficient supply chain that delivers great value for money.
“In 2015 we built over 4,000 homes and our aim is to increase our housing growth by 25% year on year going forwards. To deliver this target we are working closely with our supply chain – many of which are small and medium sized businesses – to help them to grow and respond to the market need.”