Veteran founder Tony Pidgley says it has cancelled foreign travel to vital Far East sales shows but trading so far holding up
Tony Pidgley, chairman of housebuilder Berkeley Group, said the firm has “grounded” its UK staff in response to the coronavirus outbreak, and that he had “no doubt” it would soon start to impact trading.
Pidgley told Building’s sister title Housing Today that Berkeley had stopped flying executives to sell apartments overseas – an established practice at the business, which has offices in Hong Kong and Singapore.
The veteran housebuilder, speaking yesterday just prior to prime minister Boris Johnson’s announcement of “social distancing” measures to suppress the spread of the virus, maintained that covid-19 had not yet had any impact upon trading.
The comments came as a number of construction companies and consultants, including JLL, announced plans for staff to work from home.
Pidgley said: “Not yet we haven’t [seen any impact]. Most people reserve after long deliberations and they’re committed to their positions. We’re not getting fewer people to sites.
“But I’ve no doubt that in the fullness of time it will have an impact. At the moment, it’s business as usual but I’m sure that won’t last.
“We’re dealing with an environment we have not seen before, so we’ll have to take it as it comes.”
Berkeley sells around half of its properties to investors, and in its most recent accounts said that, of these, overseas buyers continued to see relative value in the London market.
Pidgley said: “We grounded people from travelling overseas three weeks ago. It would be irresponsible in the current situation. What’s encouraging is that technology has moved on to such an advanced stage that we’re able to run these events by video conferencing and laptops. It does work because we’ve already got relationships in place.”
Last week, Berkeley Group became the first major housebuilder to respond to the virus, announcing it was cancelling a planned £455m payout to shareholders because of the growing uncertainty. Shares in the firm have fallen 25% in the last 10 days, less than a number of other housebuilders.
Kevin Cammack, analyst at Cenkos Securities, said the coronavirus outbreak raised questions about whether Berkeley was over-reliant on Asian buyers, and how long Far East marketing road-shows need to be cancelled. He said: “As global travel locks down, one can only fear for reservation rates at Berkeley over the coming months.”
Pidgley said Berkeley had had a “false alarm” of one employee who was initially suspected of having the virus, and was encouraging staff to work at home and meet via videoconferencing facilities.
Pidgley, who is 72, said the firm would deal with the issue of isolation for those over 70 “when it comes along”.
Berkeley last year made a pre tax profit of £775m on revenue of £2.95bn.