Pidgley buys smaller sites from distressed housebuilders for a quarter of asking price
Berkeley Group is to refocus its business around buying up and building on small sites, as the prospects for getting large-scale regeneration schemes off the ground nosedive.
Tony Pidgley, chief executive of Berkeley, said he had bought 20 small sites in and around London from distressed sellers, while mothballing many big sites.
Berkeley Group is one of the few listed housebuilders in a position to buy land at the moment, having reduced its debts in advance of the downturn last year. Pidgley is famous in the industry for calling the 1990 housing crash in advance.
The move also has echoes of 2004, when Pidgley announced that he was to transform his business into a regeneration provider and sold its suburban landbank.
Pidgley told delegates at a conference in Newport last week that the industry needed to focus on smaller sites, replacing small builders who were going bust. He said he knew of 30 small housebuilders in the South-east that had gone out of business.
He said: “The logic is we can get planning and go ahead quickly on these smaller sites, but it is going to be difficult because we’re too big to build the ones and twos that the small builders have traditionally done.”
He added that he was concerned that without these builders, the industry would lose some of its capacity to build homes. Berkeley has been buying up sites from distressed builders following “strict criteria” for a quarter of the original asking price.
In addition Pidgley admitted the firm, which is behind a number of big London regeneration schemes including the Kidbrooke estate in Greenwich, and Woodberry Down estate in Hackney, would be mothballing some of them. “The big sites are going to get pulled until the market turns around. Some will get re-planned and go back to housing [from flatted developments].”
However, he added that the firm was still committed to developing them when possible.