Springfield and Sigma team up to provide 'hundreds' of homes in Scotland
Scotland-focussed housebuilder Springfield Properties has entered into a collaboration agreement with Sigma PRS Management - a wholly-owned subsidiary and investment adviser of the private rented sector, residential development and urban regeneration specialist Sigma Capital Group.
The AIM-traded firm said the agreement would see it deliver private rented homes in Scotland, and added that it was its first partnership for the private rented sector, targeting the release of “hundreds” of homes in the coming years.
Under the terms of the deal, Springfield and Sigma would collaborate to acquire and develop sites in Scotland for the private rental sector (PRS).
A number of Springfield sites, primarily the Group's Village developments in Dundee, Edinburgh, Perth and Stirling, as well as its development in Inverness, were identified as potential sites for PRS development.
Subject to meeting certain criteria, Sigma would purchase part of the sites from Springfield, and would award Springfield a fixed-cost design-and-build contract to deliver housing on the acquired land.
Following handover of the completed homes by Springfield to Sigma, the homes would be let and managed by Sigma under its 'Simple Life' brand.
In addition, Springfield and Sigma would seek to identify other sites for Sigma to acquire, for the purpose of PRS housing development by Springfield.
Earlier in the year, Sigma launched the Sigma Scottish PRS Fund, with initial resources of £43m, including a £30m investment from the Scottish Government's Building Scotland Fund in the form of a revolving credit facility.
It was the first dedicated vehicle to focus on the creation of new rental homes for families in the private rented sector in Scotland.
“We are proud to be chosen by Sigma as their first partner in Scotland to deliver homes for the private rented sector,” said Springfield Properties chief executive officer Innes Smith.
“Like Springfield, Sigma focuses on providing the high-quality family homes that are the heart of successful communities.”
Smith said the agreement stood to accelerate the company’s delivery of homes, particularly on village developments, adding that the board expected it to provide a further revenue stream alongside its 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.”
Graham Barnet, chief executive officer of Sigma, added that his firm was “delighted” to announce the major partnership with Springfield.
“It targets the construction of hundreds of new homes for families across Dundee, Edinburgh, Inverness, Perth and Stirling, which include the key locations of Springfield's village sites.
“Once built, our homes will be let under Sigma's 'Simple Life' lettings brand.”
Barnet said Springfield had a “well-established reputation” for delivering quality homes in Scotland, adding that the partnership would bring “significant” benefits for both parties, especially in accelerating the rate at which mixed tenure sites could be developed.
“We look forward to working with Springfield as we develop the partnership and extend our model in Scotland.”