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LONDON-A Berkeley Group statement confirms the euro 356 million ($429 million) sale of Crosby Homes to Lend Lease and revealed that just under half the proceeds will be used to reduce debt.

Analysts, who broadly believe Berkeley got a good price, suggest further consolidation of Britain’s housing market is imminent. “Further consolidation is necessary; the only question is when. Potential bidders are just waiting to see whether the slowdown in the housing market shows through in company results,” one city insider says. He adds that Crest Nicholson and Galliford Try would probably hold up well but Taylor Woodrow and Westbury could be hit hard.

Potential bidders are expected to be national and international property developers. The government’s agenda to increase housing and mixed-use development has forced commercial developers, such as British Land, to build expertise in the residential sector. A research note by Merrill Lynch suggests the Crosby business appealed to Lend Lease because of “the skill base it brings” and not necessarily because of the value of Crosby projects on hand.

Merrill Lynch predicts Lend Lease would use Crosby staff on its 10,000-home development on Greenwich peninsula urban regeneration project. The note adds that the Crosby acquisition means Lend Lease could now develop the scheme itself “rather than just taking a fee for carving up the land.”

Crosby employs 250 staff in based in Edgbaston, Altrincham and Leeds and specializes in brownfield development–a central focus of the government’s policy on house building.

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