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Government-backed REIT on track to own more than 6,000 homes
The private rented sector (PRS) real estate investment trust (REIT), backed by the government, is on track to own more than 6,000 homes across the country.
The PRS REIT – run by Sigma Capital and supported by funds from government delivery agency Homes England – bought 1,720 properties with its initial funds, Sigma announced in its annual results.
As well as spending the initial £250m on 1,720 properties, it borrowed money to secure sites for a further 1,380 homes and has identified sites for a further 4,000 homes.
In the year to 31 December 2017, which included the launch in May of the PRS REIT, Sigma made £4.06m of profit before tax, up from £3.67m in 2016.
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The REIT is the only one in the UK to focus on investing in the private rented sector, and is aiming to create a £1bn portfolio of more than 10,000 rented homes.
It is distinctly different to the REITs which have become more common in the sector over the past couple of years, as most of them focus exclusively on supported housing and have done deals with very small housing associations.
By contrast, the PRS REIT does not work with housing associations. It recently signed a new framework agreement with Keepmoat Homes, has collaborated with Galliford Try and is in discussions with house builder Countryside to expand activity.
Graham Barnet, chief executive of Sigma, said: “2017’s results do not reflect the profound change to Sigma’s growth prospects and earnings profile. However, our financial performance from the new financial year onwards will reflect the new model.
“We are wholly focused on delivering the PRS REIT’s initial goal of creating an initial 10,000 high-quality new rental homes for middle-income families and are confident that, with our unrivalled PRS platform, supported by our housebuilding partners as well as by central and local government, Sigma is well-placed to achieve its objectives.”
