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Re Property Investment

16th May 2008 07:00

RNS Number : 5880U
Sigma Capital Group PLC
16 May 2008
 



SGM

SIGMA CAPITAL GROUP PLC

 

("Sigma")

Completion of Property Acquisition

 

Sigma Capital Group plc, the specialist investment management and advisory group, is pleased to announce the completion of its seventh property acquisition by its property subsidiary, Strategic Investment Management Ltd ("SI"). Sigma announced the details of the exchange of contracts for this acquisition, of the City Wharf development in Aberdeen, on 12 November 2007. However, its completion, which had originally been expected to take place by the end of 2007, was delayed due to market conditions.

As previously announced, upon full capitalisation, SI's seventh limited partnership is expected to generate gross revenue of £3.1m for Sigma in 2008. The total consideration for this development property is approximately £40m and is being funded by bank debt and third party investor equity. 

Situated in the heart of Aberdeen city centre, the City Wharf development will comprise a mix of prime office and leisure assets. Existing tenants include Aberdeen City Council and FirstGroup plc. The development features a casino of approximately 25,000 sq ft, pre-let to Grosvenor Casinos, and a 107-bedroom Ibis hotel, pre-let to Accor Group. Rental guarantees of either two or three years are in place for the remaining units.

To date, SI has established six other limited partnerships, with the amount of funds previously raised totalling £264m. The investor equity element raised for the first six partnerships totalled nearly £60m. SI has successfully disposed of its Limited Partnership Numbers 1, 2 and 3, delivering investor returns on equity contributions of 21%, 40% and 30% respectively. 

SI earns an initial fee on the basis of the funds raised for each partnership and has the right to a share of any capital gain realised once a specific minimum return has been achieved for investors. Since Sigma holds 48% of SI, all set-up fees and fees earned by SI on the disposal of each property are reflected in Sigma's consolidated accounts.

Graham Barnet, chief executive of Sigma, commented, 

“The City Wharf development in Aberdeen city centre is a high quality commercial development which fulfils our investment criteria. It has blue chip anchor tenants and a guaranteed rental income and we believe it will offer good returns for investors. Despite the tightening of financial liquidity and reduction in consumer confidence in the market, our property subsidiary is continuing to see interesting opportunities, which we are well-positioned to take advantage of.”

Enquiries:

Sigma Capital Group plc 

Graham Barnet, Chief Executive

T: 0131 220 9444

Biddicks

Katie Tzouliadis

T: 020 7448 1000

Arbuthnot Securities

Tom Griffiths/ Neil Kirton

T: 020 7012 2000

Company website: www.sigmacapital.co.uk 

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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