Business Secretary Vince Cable today welcomed a new £700m inward investment deal, which will be delivered through UK company Sigma Capital Group with backing from international investors, Gatehouse Bank.
The new joint venture will enable Sigma Capital Group, a residential and urban regeneration specialist, to build up to 6,600 new privately rented homes in the UK. Sites for an initial 2,000 homes have already been identified in Liverpool and Greater Manchester.
The deal has been facilitated by UK Trade and Investment's (UKTI) Regeneration Investment Organisation (RIO) which has been set up to direct investors to credible, industry-backed development opportunities throughout the country.
RIO will be officially launched this evening and will have an independent advisory board comprised of big hitters from British business and government, chaired by former Lord Mayor of the City of London Sir Michael Bear.
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 per cent 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 south east.
"By ensuring each region has access to good finance opportunities, UKTI's Regeneration Investment Organisation will help all the UK's regions fulfil their full potential, helping to build a stronger economy and a fairer society."
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."
Chairman of Gatehouse Bank plc, 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."
Chairman of RIO Sir Michael Bear said:
"We have a really strong supply of regeneration projects in the UK – over £100bn in capital value. But currently the offer is fragmented with delays and it's difficult for investors to navigate.
"The Regeneration Investment Organisation provides a great opportunity to announce a radical new approach to helping boost investment into the UK and provides a fantastic way of helping investors to find a credible pipeline and range of UK development opportunities and therefore get money into good projects and enable growths across the regions."
Recent international investment secured by UKTI in partnership with London and Partners includes the Battersea Power Station project, Chinese investments in London's Nine Elms and Royal Albert Dock, and Chinese investment into Manchester City Airport. RIO will build on this success by creating an easier point of entry for investors and creating stronger links and better support for new projects throughout the UK.