Gatehouse announces further investment into private rented sector housing in the UK

Gatehouse Bank plc (“Gatehouse”), the London-based investment bank, is pleased to announce further investment of £100 million to develop a significant portfolio of private rented sector (“PRS”) homes across select markets in the UK, including Merseyside, Manchester, Birmingham and others. The initiative benefits from Gatehouse's strategic partnership with Sigma Capital Group plc, a UKlisted residential and urban regeneration specialist.

Gatehouse is predominantly owned by institutional and sovereign shareholders from the State of Kuwait, and Gatehouse’s investment activities in PRS include significant support from the Kuwait Investment Authority to address the UK’s housing shortage. The PRS initiative is the latest in a series of investments made by Kuwaiti investors to support strategic initiatives championed by the UK Government.

Significant supply and demand imbalances exist across the UK housing market with housing construction rates continuing its downward trend since the 1970s. Today, analysts forecast that approximately 240,000 new homes need to be built each year to meet demand; however, last year, only 141,000 new homes were built, compounding the need for more housing. Analysts project that over the next five years only 150,000 units per annum will be built, which is not enough to meet the needs of the UK’s growing population.

This investment is Gatehouse's second PRS initiative and follows its investment in a £110 million programme to build in excess of 900 homes in Greater Manchester and Merseyside, which Gatehouse launched with Sigma in the second half of 2014. The first programme is ahead of schedule, both in terms of construction and occupancy, and demonstrates Gatehouse and Sigma’s ability to deliver much-needed PRS housing to communities in the UK.

Fahed Boodai, Chairman of Gatehouse, said “Our activities in PRS are a major strategic initiative for Gatehouse and further position the firm as a leading provider of institutional-quality real estate investments. I am extremely pleased to see our investment activities further bilateral relations between Kuwait and the UK.” Graham Barnet, Chief Executive Officer of Sigma said: “We are very excited about the prospects for the PRS sector. Our partnership with Gatehouse positions us at the forefront of delivering PRS homes across the UK, and Gatehouse’s activities will provide further support to Sigma’s goal of building 10,000 PRS units in the coming years.”

Abdulaziz AlDuweesh, Chief Investment Officer of Gatehouse, added: “We are investing where we believe we can make a difference. Many of our investment activities are grounded in large-scale demographic and social change, and PRS is no different. More people are renting today than ever before. Throughout the UK, significant supply constraints in the housing market have put upward pressure on rents, and homeownership is ever more expensive. Institutional investors are recognising this and as a result, we see real opportunity in the UK PRS market over the coming years.”

During an event held last night at No. 10 Downing Street, announcing the launch of an initiative to encourage overseas investment into the UK housing market, Lord O'Neill, Commercial Secretary to the Treasury and the Regeneration Investment Organisation (RIO), which is part of UKTI, singled out Gatehouse’s partnership with Sigma as a model for how foreign investment can help alleviate the UK’s housing crisis. Lord O’Neill said: “The Northern Powerhouse is becoming a bigger attraction for foreign investment and this announcement highlights the important role it can play in delivering much needed local infrastructure. This development will not only offer hundreds of new family homes across the north but it will also support vital regeneration projects in some of our great northern cities. Improving the flow of international capital into the UK is a key part of plans to build the Northern Powerhouse and this investment from Kuwait is very welcome news.”