Sigma, the private rented sector (“PRS”), residential development and urban regeneration specialist, is pleased to provide a trading update for the financial year ended 31 December 2019.
As expected, delivery was stronger in the second half of the year than the first, and in particular in the fourth quarter. This resulted in a significant uplift in development fees and development profits half-year on half-year in addition to an increase in asset management income following a full year of Investment Adviser fees from The PRS REIT plc’s (“REIT”) £250m equity raise in February 2018. The Board therefore expects full year results to be in line with market expectations.
The results mainly reflect Sigma’s ongoing role as Investment Adviser and Development Manager to the REIT. Over 840 new rental homes were delivered via Sigma’s PRS platform for the REIT in 2019, with a combined estimated rental value of c. £7.9m per annum. Delivery included the sale by Sigma of two fully completed and let sites to the REIT, after independent valuations, for a total consideration of £20.9m.
At 31 December 2019, 3,328 homes were under development for the REIT, with an estimated rental value of £32.7m. These are located across 42 sites that, including the homes already completed on these sites, have a combined gross development cost of £584m. Sigma expects to deploy the full balance of the REIT’s net available funding by the end of March 2020. Sigma currently has seven development sites that it is self-funding, with a combined gross development cost of £75.9m. Five of these are designed for purchase by the REIT, with the other two constituting Sigma’s first sites in London.
The scope of Sigma’s build-to-rent activities is growing, with a collaboration agreement covering Scotland and the acquisition of the Company’s first sites in London, as announced on 25 September and 8 October 2019 respectively. The Board looks forward to providing a further update on these developments in due course.
Full year results are expected to be announced in April.