EQT Real Estate, Sigma Capital form JV to develop 3,000 new homes in UK

Sweden-based EQT Real Estate has formed a joint venture with Sigma Capital Group for the development of 3,000 build-to-rent (BTR) residential apartments in Greater London, UK.

The completed homes will be available under Sigma’s ‘Simple Life London’ brand. Sigma claims to have introduced the concept of BTR in the UK and till now has delivered more than 4,200 rental homes across the country.

Initially, EQT Real Estate and Sigma have committed equity of £300m and £16m, respectively in the joint venture. The JV plans to have an initial capacity to establish a portfolio of 3,000 homes with a total value of more than £1bn.

The JV has secured five projects with a total capacity of 361 homes from Countryside Properties in the London boroughs of Ealing, Enfield and Havering.

Additionally, the JV plans to acquire two sites located in the boroughs of Barking and Dagenham and Havering, presently being developed by Sigma. With a total capacity of 157 homes, the two sites will be completed in the second half of 2021.

The JV plans to deliver its assets over a period of at least five years to create a stabilised portfolio of diversified rental income.

EQT Partners director and EQT Real Estate UK head Peter Shacalis said: “EQT Real Estate is thrilled to be entering the London residential market, one with a severe supply shortage of professionally managed, high-quality, good value homes to rent, with Sigma Capital.

“In addition to the initial seven schemes, we are currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional BTR portfolio with robust and diversified rental income.

“EQT Real Estate looks forward to partnering with the Sigma team to realise our shared vision over the coming years.”

Homes England has agreed to provide a loan of £50m for the initial acquisitions.

Sigma Capital CEO Graham Barnet said: “We are delighted to be expanding our delivery of new rental homes in the UK with the launch of our London-focused joint venture with EQT Real Estate, a strong and visionary partner.

“Homes England, which has supported Sigma with every major initiative to deliver the new housing that is much needed across the country, is also providing invaluable backing to the joint venture. Once again, Homes England is leading the market in its support for organizations looking to deliver homes at scale in the UK.

“We are also pleased to be working with Countryside Properties in Greater London to replicate the success of our partnership in the regions. We look forward to delivering thousands of high-quality new rental homes across the Capital with our partners at EQT Real Estate and providing London renters with a higher standard of customer care.”