Property firm Sigma Capital has teamed with an investment firm to create a £1 billion empire of rental homes in London.
The joint venture between Sigma Capital and the real estate arm of Sweden-headquartered investment group EQT, will look to have 3000 high-quality flats and houses built over a period of at least five years.
Sites in zones 3-6 will be sought, and homes will be let at market-rate rents.
The investment plan comes at a time when more people, particularly in London where it is increasingly tough to get on the housing ladder, look to lease properties for longer.
EQT Real Estate has committed an initial £300 million, and Sigma, which sources and manages sites, will put in £16 million.
Part of that, alongside a £50 million loan from the Government’s Homes England, will be used to fund the acquisition of five sites with scope for 361 homes from Countryside Properties. They are in areas such as Enfield and Havering.
In addition, two further sites currently under development by Sigma in the boroughs of Barking and Dagenham and Havering will be acquired by the partnership on completion.
AIM-listed Sigma will receive fees relating to the identification, delivery and management of properties.
The joint venture marks EQT Real Estate’s first UK investment.
Peter Shacalis, head of UK at EQT Real Estate which will get long term rental income, said the London residential market has “a severe supply shortage of professionally managed, high-quality, good value homes to rent”.