HOUSEBUILDER Springfield Properties has made its first move into the fast-growing private rented sector (PRS).
The Elgin-based firm has formed a partnership with Sigma PRS Management to acquire and develop sites to build homes for the rental market. It complements Springfield’s main work building homes for the private residential and affordable housing sectors.
The firm has identified current development sites in Dundee, Edinburgh, Perth, Stirling and Inverness, where it recently made its first land acquisition, as potential locations for PRS homes.
A statement to the stock market noted that, subject to certain criteria, Sigma will purchase part of these sites from Springfield and award the Highland builder a fixed-cost design and build contract to deliver housing on the acquired land. The completed homes would then be let and managed by Sigma under its Simple Life brand.
The partners are targeting the release of hundreds of homes over the coming years. The collaboration comes after Sigma launched a £43 million Scottish PRS Fund, backed by a £30m investment from the Scottish Government’s Building Scotland Fund as a revolving credit facility. It is described as the first vehicle dedicated to developing PRS homes for families in Scotland.
Springfield chief executive Innes Smith said the firm expects the agreement to “provide a further revenue stream, alongside our existing private and affordable housing activity, with good visibility over cash flows.”
Alastair Stewart, analyst at Progressive Equity Research, said the collaboration “should establish a third strand to Springfield’s growth, alongside its private and affordable housing.” He added: “Although potential development opportunities remain to be identified, we believe it could further accelerate Springfield’s already ambitious growth aspirations.”
Shares in Springfield rose 3.6%, or 4p, to 113.5p.
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