Edinburgh property group Sigma has launched a fund backed by the Scottish Government to invest in rental homes across Scotland.
The fund - the first of its kind in Scotland - will have initial resources of £43 million, with £30 million provided by the Scottish Government’s Building Scotland Fund.
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Sigma said appraisals of a number of sites are under way and that the Sigma Scottish PRS Fund should enable the delivery of more than £40 million of new properties a year in Scotland once its revolving credit facility is up to full capacity.
Sigma said demand for rental homes in Scotland is strong and it plans to use its existing model of working with a small group of construction partners and central and local government agencies to deliver private rental housing “at pace”.
According to the latest Scottish Household Survey, the proportion of households in the private rented sector in Scotland has grown from five per cent in 1999 to 15 per cent in 2017, with an estimated 360,000 households in private rented properties.
Over the past 18 years to 2017, the total number of households in Scotland has increased by 13 per cent from 2.19 million to 2.46 million. The percentage of households in owner occupation has declined from 66 per cent in 2005 to 62 per cent in 2017.
Scotland’s Communities Secretary Aileen Campbell, said: "Renting accommodation is becoming a long-term option for many people, at many stages of life, for example when starting a family or when retiring. We want everyone who rents to be able to live in a house that suits their needs and in an area where they want to live, including near family, friends or schools.
The £150 million Building Scotland Fund, a precursor to the Scottish National Investment Bank, was launched last year to focus on housing, industrial and commercial property and business-led research and development projects.
The launched of the new Sigma fund came as the company announced full year results which showed group revenue for 2018 rise by 181 per cent to £12.5 million and profit before tax for the year increased by 200 per cent to £12.2 million.
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However, the company said planning delays have affected the timetable for the delivery of new homes and the board “is now resetting its expectations for Sigma's performance in the current financial year”.
Chief executive Graham Barnet said: “Whilst planning delays have led us to change the mix of our development pipeline and reset our expectations for the current financial year, we still expect Sigma's performance to improve materially over 2018, and see further growth opportunities for Sigma to grasp beyond those currently under way."
