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LONDON-Berkeley Homes and the London Development Agency submitted plans for 300,000 sf of leisure and 3,000 homes at the Royal Arsenal site in Woolwich, south London.

The leisure component on the 24-acre site comprises a cinema, a 120-bedroom hotel, bars and restaurants. A third of the homes will be earmarked for affordable or key worker housing. The proposal is the largest ever in Berkeley’s history and represents a new strategy of urban regeneration rather than conventional house building.

Escalating land prices, intense competition and ever tighter planning restrictions has prompted the shift by house builders out of traditional house building and into regeneration. Berkeley, and other house builders like Persimmon and Crest Nicholson, has warned that the market for smaller sites in London and the South East is overheated. To avoid overpaying, all three have on different occasions indicated they would concentrate on developing more complicated larger schemes that attract less competition.

The shift in strategy was unveiled earlier this year when Berkeley surprised the market by saying it would be shrink the company and turn itself into an urban regeneration company. Chief executive Tony Pidgley promised to return more than €2.7 billion ($3.3 billion) to shareholders. Berkeley also has €435 million ($524 million) in cash to spend. “Berkeley is now in a unique position with a model that is cash generative and which adds value throughout the development process. This strategy has been implemented with a sound management team and dedicated workforce which we have strengthened during the year”, said Pidgley.

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