A first phase of approximately 2,000 residential units is planned and 22 sites have already been identified in Greater Manchester and Liverpool totalling more than 90 acres. The development cost of this phase is £200m and completion is expected by the end of 2015.
With plans for a further 4,600 new homes in development, the total cost is estimated at £700m.
Sigma and Gatehouse, a Shariah-compliant Islamic bank based in London, have formed a joint venture for the new enterprise. The deal has been facilitated by UK Trade & Investment’s (UKTI) Regeneration Investment Organisation (RIO), which has been set up to direct investors to viable development opportunities.
Much of Sigma's development activity is through long-term partnerships with Liverpool City Council, Salford City Council and Solihull Metropolitan Borough Council.
Sigma chief executive Graham Barnet said: “We have developed an innovative joint venture model designed to deliver high quality homes in areas of the country where rental housing is in extremely short supply. Gatehouse has substantial knowledge of and expertise in the UK property market and has shared our vision for this project. I am delighted that we are now working together to deliver the roll-out of our model, which has the potential to create one of the largest new-build privately rented residential portfolios in the UK.
“Underpinning this new venture are our local authority partnerships and I am extremely pleased that this agreement creates the conditions for us to help efficiently deliver their regeneration objectives with high quality new homes. Once bank funding is in place, we look forward to delivering the initial tranche of up to 2,000 new homes in Greater Manchester and Liverpool over the next two years.”
Gatehouse Bank chairman Fahed Boodai said: “Expanding into the residential market, particularly in the UK, is a significant milestone for Gatehouse Bank. We are seeking investment opportunities in mature and stable markets. This joint venture with Sigma breaks new ground in the UK residential sector and will help to deliver thousands of much needed high quality new homes for rent across the country.”
Kuwaiti investment in the UK housing market is in line with government policy to sell off infrastructure to foreign ownership. Malaysian investors have taken ownership of the Battersea Power Station development and there is significant Chinese investment at London’s Nine Elms and Royal Albert Dock, as well as at Manchester City Airport.
Business secretary Vince Cable said: “Today’s announcement from Sigma Capital and Gatehouse Bank will create thousands of modern new homes as well as new jobs in Liverpool and Manchester, with similar plans in the pipeline for other regions in the country.
“The UK’s inward investment is booming, growing by 11% last year alone. We want to be even more ambitious and make sure that any new investment is spread right across the country – not just in London and the southeast.”