Biggest build to rent developer to be sold

Steve Lumley·17 June 2021·4 min read
Biggest build to rent developer to be sold

The biggest build to rent (BTR) developer and landlord in the UK could be sold for £188 million after a process to find a buyer led to an equity firm making a bid.

Sigma Capital Group is based in Edinburgh and has built 5,400 rental properties since 2014 working alongside local authorities, investors and building partners.

The homes are mainly for single families and the firm has now been bought by a private equity specialist, London-based PineBridge Benson Elliot.

Sigma also has bases in London and Manchester and in a statement, the firm says: "During late 2020, in light of the strategic progress Sigma had made during the year, notwithstanding the Covid-19 crisis, Sigma's directors decided to review the strategic options and relative benefits of the various routes available to the business to fund its future growth and maximise shareholder value.

"Recognising the attractiveness of Sigma as a platform for investors with access to greater capital availability, the Sigma directors decided to appoint Rothschild and Co to run a private sale process for Sigma in order to maximise value for Sigma's shareholders."

‘Directors intend to recommend this offer’

Sigma's founder, Graham Barnett, said: "We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties.

"We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot’s capital backing, will make a powerful combination, and enable Sigma to expand its activities significantly."

He added that there was a critical need for professionally managed, high-quality homes in the UK that Sigma will strive to meet.

The managing director of Accommodation for Students, Simon Thompson, said: "The build to rent sector in the UK is growing quickly, and Sigma has been a pioneer in delivering single-family homes for rent."

Sigma's aim now is to access capital for investment in the UK's private rental sector and grow their business by forming new house building partnerships and expanding their operations into new regional markets.

Landlords to discuss reforms with Government ministers

Meanwhile, the National Residential Landlords' Association (NRLA) has revealed that it has been invited to join high-level talks with government ministers over private rental sector reforms.

They say that chief executive Ben Beadle will discuss issues in the White Paper to be published in the autumn.

The NRLA believes this could lead to the scrapping of section 21 notices and modifying section 8 possession powers.

It's also likely that the introduction of deposit passports which sees a tenant move more easily from one property to another being introduced.

Mr Beadle said: "The original proposals included a commitment for strengthening a landlord's rights to repossess - with a valid reason - and we will make clear that we expect them to honour."

He added that the association would like to see a new tenant-landlord conciliation service being developed to sustain tenancies whenever that is possible.