The pace of M&A activity in the UK listed property sector is picking up. On Friday, build-to-rent specialist Sigma Capital announced it had agreed a deal to be bought by PineBridge Benson Elliot for £188M.

The deal follows hot on the heels of Blackstone’s £1.2B take private of logistics and residential developer St Modwen. Last year, Lone Star agreed a deal to buy retirement living developer McCarthy & Stone for £630M and Starwood agreed to buy RDI REIT for £468M.

Benson Elliot is paying a premium of 35% to the price at which Sigma’s shares were trading before the offer was announced.

In buying Sigma, it is not buying assets. It is buying a company that builds and manages rented residential on behalf of other investors, with experience in both large BTR blocks and the fast-growing single-family residential sector.

Benson Elliot could use that platform to deploy its own capital into the UK BTR market, as well as taking the profits when Sigma does build and manage for others.

Sigma has joint ventures with Swedish investor EQT and Middle Eastern bank Gatehouse, and it also manages PRS REIT, a listed vehicle that owns 3,500 rented homes. Sigma made a £3.2M profit in the nine months to September, according to its latest annual report.

Sigma said in its announcement of the takeover it had appointed investment bank Rothschild to find a buyer because it felt it should have an owner with access to greater capital than itself. Sigma co-invests alongside the partners it builds for.

Unlike many takeovers that happen in the wake of a recession, Benson Elliot is not buying a company whose value has suffered. Sigma’s shares dropped from 115p in February 2020 to 69p at the end of March 2020 as stock markets plummeted, but before the takeover was announced were trading at 149p, their highest-ever level, as rented residential proved resilient to the effects of the coronavirus pandemic.