The Berkeley Group Review 2021 – that will be the title of this article.
Explore whether The Berkeley Group is a good option compared to St. James’s Place.
Nothing written here should be considered as any form of financial advice.
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Introducción
Berkeley Group Holdings plc is a British home developer and builder based in Cobham, England. It is listed on the London Stock Exchange and is included in the FTSE 100 index.
The company was founded by Tony Pidgley and Jim Farrer in Weybridge in 1976 as Berkeley Homes, named after regional subsidiaries. Pidgley (Dominant Partner) and Farrer previously ran Crest Homes’ housing division, and they aimed to focus on providing exclusive housing on parcels or small parcels. Over the next few years, Berkeley expanded into its own counties and, building fewer than 100 homes a year, in 1984 went public on the OTC market.
Following the flotation, Berkeley expanded geographically to the west, south Midlands and East Anglia; she also formed the St George joint venture for construction in central London. By 1988, Berkeley was building over 600 executive homes a year. By then, Pidgley was aware of the overheating housing market and was actively selling homes for cash.
For two years the company operated only at breakeven, but its cash position was strong and in 1991 it was able to acquire Manchester-based Crosby Homes and an outstanding 50% stake in St George; Berkeley began buying large building plots at discounted prices. The 1990s was the decade that Berkeley shifted its operational focus to major urban revitalization sites in London, Birmingham, Manchester and other northern cities.
In the early 2000s, Berkeley refined its strategy, focusing primarily on the relatively large-scale urban redevelopment in the London area. In 2003, the postponement of the sale of Crosby Homes was announced. The downsizing was aimed at generating surplus cash, and a £ 1.45 million return scheme was adopted in 2004.
In 2015, the company became the winner of the Large Developer of the Year competition at the RESI competition organized by Property Week.
In March 2020, during the COVID-19 pandemic in the United Kingdom, Berkeley claimed that the coronavirus cost him £ 80 million in just six weeks and began shutting down most of his sites, having previously canceled a shareholder payout of £ 455 million sterling. In June 2020, the company announced that it was advising up to 200 layoffs, and showed that its pre-tax profit was down 35%, in part due to the impact of COVID-19, which led to a drop in sales and revenues. As a result of the COVID-19 pandemic], the company has postponed its payment to shareholders of £ 455 million for two years.
Founder and chairman of the board of directors, Tony Pidgley, passed away from a stroke in June 2020. Non-executive director Glyn Barker was appointed interim chairman for up to two years until a permanent replacement is determined.
Berkeley Homes has built several apartment buildings in central London, including the One Blackfriars skyscraper (2014). In small businesses, he runs urban redevelopment programs through Berkeley Community Villages and builds commercial properties through Berkeley Commercial. Another subsidiary, Berkeley First, builds housing for students and key employees.
Operating subsidiaries include Berkeley Homes plc, which plans the largest estates and hires contractors to manage the communal areas if and until residents’ rights to manage the companies are transferred. The developer imposes agreements on the preservation of the value of houses in its vicinity.
Large examples of operations include community facilities with village-sized neighborhoods that have green buffers and are lined with gated apartments and houses; for example, the Bracknell plan for 750 new homes, an elementary school, an additional care facility, roads, landscaping and local shops to be built on mixed-use land to expand the Warfield suburb, close to city computer parks and headquarters business parks. apartments.
London has properties such as Wimbledon Hill Park and Royal Arsenal Riverside in Woolwich.
About the Berkeley Group
The company’s passion and goal is to build quality homes, strengthen local communities and make a difference in people’s lives.
Their vision is to be a world-class business trusted to transform the most sophisticated properties into exceptional locations and maximize their positive impact on society, the economy and the natural world.
To achieve this goal, they have developed a long-term strategy called “Our Vision 2030”, which sets out a complex and holistic approach to managing their business over the next decade. For ten years, it has propelled them forward and helped to lead the industry in critical areas such as customer satisfaction, tackling biodiversity loss, taking action to tackle climate change, and adopting advanced manufacturing. “Our Vision 2030” now sets an exciting roadmap for the next ten years.
Berkeley has always had a clear goal of building quality homes, strengthening communities, and improving people’s lives. They have created a unique culture and strong values that define the way of working and have not changed since their founding.
Berkeley’s priorities
The company has identified a few strategic priorities that will help them transform tomorrow – both through what they create and through the way they work.
1. Customers
The goal is to put the customers at the forefront of decision making and provide the industry’s best home buying experience.
The company puts its customers at the center of every decision they make. From impeccable customer service to the quality of their homes, they strive to delight them with every detail. They will increasingly use digitalization and personalized communications to improve the quality of their customer service.
Customer experience
The Berkeley company provides an exceptional personalized home buying experience. They measure customer satisfaction and customer experience using two metrics, Net Promoter Score and Recommend to a Friend, which consistently exceed the industry average.
They will continue to receive feedback from their customers through internal and external mechanisms and use them to improve the experience and products they provide.
Digitizing the way of work
The company will expand the use of technologies such as virtual tours and video updates to interact with their customers and understand their needs.
In addition to face-to-face communication at shopping malls, their teams now use MyHome Plus as a portal to exchange information on selected properties and developments. Over the next two years, they will strive to enroll 90% of the customers with MyHome Plus, helping them communicate the right information at the right time during the buying process.
2. Quality
The main goal is to become a leader in producing high quality, safe homes for everyone. The Berkeley builds quality houses where people want to live. They have no standard property types or formats, and no two Berkeley Group designs are alike. Instead, they work with the best architects to create unique designs that meet the needs of their clients.
Quality houses
The company builds quality houses that delight their customers with every detail. They adhere to strict and advanced assembly quality assurance (BQA) measures, training the staff to assist in their implementation, and validating them through rigorous internal and external audits. Over the next two years, they will continue to improve the manufacturing processes and provide additional training and quality assurance audits.
They continue to exceed the industry average for defects reported by customers six weeks after their move and aim for zero defects.
Safe houses
Through their strategic partnership with the Royal Society for the Prevention of Accidents (RoSPA), they have been involved in the development of the Safer By Design RoSPA concept. In the next two years, they will complete their first homes to this standard and start designing more homes to that standard; helps to reduce the number of serious accidents resulting from accidents in new buildings.
3. Communities
The Berkeley’s goal is to transform underutilized lands into unique, well-connected and welcoming places where people and communities can thrive in the long term.
They work with local communities to create places that strengthen the community, improve the quality of life for the people, and have a lasting social impact outside the area. They invest in large scale abandoned sites with the greatest potential for positive change.
Converting underutilized land
The company uses its experience and resources to transform abandoned lands into hospitable areas in the long term. They partner with locals and municipalities to design popular unique locations supported by a mix of public amenities and infrastructure. Given the scale of these challenging sites, their complex deployment programs can take up to 30 years to complete. They also partner with the Quality of Life Foundation to promote best practice in this area.
Connection
The company will continue to prioritize connectivity by linking their sites to local transport hubs. Public amenities and cozy natural spaces will be provided early so that the wider community will experience the benefits of restoration as soon as possible.
To best serve their customers’ needs, they have accelerated the delivery of ultra-fast broadband. They have partnered with service and infrastructure providers since 2014 and have been supplying fiber to all new homes since 2018.
Over the next two years, they will also conduct research to understand the changing context of the local centers and to include neighborhood development measures that will provide the conditions that local residents need.
Social value
Truly eco-friendly places are great places, but they’ve also stood the test of time. In collaboration with external experts, the company has developed a new tool for calculating the societal value that each development brings in the long term. The tool uses over 30 indicators on a range of topics, from public facilities to affordable housing and access to nature, to assess the impact of development.
They have already tested and developed a methodology using 13 sample plots, and now they will start using this tool to calculate the cost of each new development and use it to aid in the decision-making process during the design and planning phase.
Community plans
They use community plans to help communities thrive. These plans include a calendar of events, dedicated community managers, and resources that will allow locals to make the most of their new amenities. Over the next two years, they will make sure that each of the existing 28 recovery schemes has a community plan.
They will also improve the information they provide to the real estate teams and property management companies they work with as we work with their partners to create long-term prosperous neighborhoods and enable clients to connect with their neighbors.
4. Climate action
The company’s goal is to play an active role in tackling the global climate emergency by building sustainable, low-carbon homes.
Berkeley plays a leading role in the fight against climate change. They have an ambitious, holistic approach to tackling climate change that includes designing efficient and resilient sites and transforming our building processes and broader business operations. They have set ambitious science-based goals that commit them to reducing direct emissions, embodied carbon in the supply chain, and in-service emissions from their homes. This means that they agree with global goals and set them on a path that will lead a zero-carbon business by 2040.
Low carbon homes
Achieving their science-based goal of reducing carbon dioxide emissions in their homes by 40% between 2019 and 2030
They have significantly improved the efficiency of fabric use in their homes and will continue to improve this efficiency in line with the Future Homes Standard. Since 2018, they have been working to understand how development can move to low-carbon technologies by 2030.
They currently use their proven science-based goals to reduce carbon emissions throughout the life of their homes, with a focus on building material efficiency and associated low-carbon technologies. They will continue this work by introducing the right low-carbon technologies into the homes, including heat pumps and photovoltaic systems. They will also demonstrate how advanced manufacturing and the use of modern technology can help them achieve higher goals.
5. Nature
The goal is to create a net increase in biodiversity and make a tangible contribution to protecting the environment with every development.
Net gain in biodiversity
The company is proud to lead the industry in net biodiversity growth and pave the way for this to become a national legal requirement for all developments.
Since they were the first construction company to commit to achieving net biodiversity gains at every site back in 2017, they have used their net biodiversity toolkit in the masterplanning of 40 sites, which together will create more than 480 acres of new or significantly improved natural habitats.
They have now raised their goal of achieving a minimum net profit of 10% on every site, no matter where it was previously used.
Over the next two years, they will be working closely with their managing agents and landscaping teams to ensure they have the skills to maintain the habitat they create for the long term.
6. Modernized production
The Berkeley’s goal is to use advanced manufacturing and digital technologies to build more homes and achieve higher standards of quality, safety and sustainability.
They create a new generation of beautifully designed and finely crafted homes. They want to demonstrate how the industry can modernize to increase production and achieve high standards of product quality, environmental performance and safety.
Modern production
Production begins at the state-of-the-art Berkeley Modular manufacturing facility. They are preparing to start production at their new, state-of-the-art manufacturing facility in Northfleet, Kent. Berkeley Modular combines the passion for homes and places with cutting edge manufacturing technology, pioneers in the automotive and aerospace industries. The manufacturing process is fully automated and digitally powered, so that raw materials and components are transformed into ready-made and ready-made modules for new homes in just five working days.
Modern construction methods
Many of their sites are already using modern construction methods such as bathroom cubicles and panel systems to raise construction standards. Over the next two years, they will provide information to help each project team analyze the potential of advanced manufacturing and other forms of modern construction techniques from the outset.
Increased use of digital technologies
The company understands that the industry needs to move forward and start designing and delivering homes digitally. Their new digital collaboration platform will be rolled out across the entire business to ensure that they have a complete digital record of every home from construction to completion, the golden thread of information. This will be supported by increased use of other technologies such as building information modeling, computer-aided design and collaboration tools. The modular Berkeley facility will also benefit from the automated collection of digital records for increased safety and maximum efficiency.
7. Supply chain
The company’s goal is to build a responsible and constructive supply chain; one that is productive, practical and profitable, sustainable, ethical and reliable.
They partner with the supply chain to share knowledge, increase transparency and achieve higher standards of quality, safety and sustainability. Together, they build capacity with skills and resources to meet the changing needs of today’s construction industry.
Cooperation
They will continue to improve the communication with the supply chain and will implement 360-degree annual feedback to gain additional insight into how they can improve the work.
They will continue to adhere to the Expedited Payment Code they have signed and will make payments to the contractors within 30 days.
Improving their bidding recommendations aligns the process, so they provide total value over value
Each project should be carried out on a total cost basis, not just cost. This includes evaluating contractors in terms of quality, health and safety, modern construction methods, sustainability and ethical considerations such as their supply chain approach to tackling modern slavery and child labor.
They will continue to improve the approach in this area and share feedback with the supply chain.
Materials
Their extensive material supply chain is critical to meeting the manufacturing needs. To maintain the sustainability and continuity of supply of typical materials, they are launching a new material strategy and entering into strategic supplier agreements that do not compromise the individual nature of our designs.
They ensure that materials meet the company’s quality, safety and sustainability requirements and are procured ethically.
They will build on this further, preferring partnerships with companies that share their commitment to fighting climate change, maximizing the use of lower carbon products and working together to achieve sustainable development goals such as reducing waste and adhering to the principles of a circular economy.
Best practice
Comparative analysis of global best practices, obtaining CIPS certification for excellence in procurement by 2025.
The company’s supply chain activities will be reviewed to meet the requirements of the Chartered Institute of Procurement and Supply (CIPS) globally recognized procurement best practice award.
This will provide the necessary resilience and expertise, and support the development of new supply chain capabilities as they embrace new digital technologies and modern construction methods.
This experience will also help them to achieve the other strategic priorities, such as quality, their science-based climate change goals and future skills.
Information for investors
Berkeley’s strategy was developed for a cyclical market. Residential development is not a separate reporting period. It’s about creating value over the long term, which requires financial discipline and balance sheet stability. Berkeley acquires land differently than others. The focus is on adding value through their development expertise, for which they have an excellent reputation.
First of all, the increase in the value of property is time. This is ensured by Berkeley’s strategy of taking on low financial risk by combining production with demand, forward selling and leveraging only when there is sufficient visibility of future cash flow.
This is all about the Berkeley Group and the services they provide, the priorities they have and they quality of work.
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