Shares in Sigma Capital jumped by more than two-fifths following the announcement of plans to develop up to 6,600 new rental homes.
A joint venture with Gatehouse Bank will provide the funding for these plans. The initial 2,000 homes have a total development cost of £200m and the total cost for all the planned homes will be around £700m. Sigma will find the development land and develop the housing. Sigma already has three local authority partners and it is in discussions with other local authorities.
Gatehouse, which will provide the equity for the joint venture, already has a property portfolio worth more than £1 billion. Negotiations for bank finance are underway and when they are completed it will take two years to construct the initial homes.
So far 22 sites totalling 90 acres have been identified in north west England.
Sigma will generate revenues from asset management fees during both the construction and investment phases and will also participate in the capital upside of the joint venture vehicle.
At 37.75p a share, up 11.5p, Sigma is valued at £17.3m.
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