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Berkeley Rises Most in Two Years After Sixfold Dividend Increase

Berkeley Group Holdings Plc, the U.K. homebuilder focused on London and the southeast, rose the most in more than two years after increasing its first-half dividend sixfold as part of a plan to return 1.7 billion pounds ($2.8 billion) to investors by 2021.

Berkeley climbed as much as 11 percent, the biggest gain since June 2011, after declaring an interim dividend of 90 pence a share in a statement today. First-half profit rose 22 percent as the Cobham, England-based company sold more homes and prices climbed.

Berkeley has gained from London’s booming luxury residential market, which has outperformed other U.K. real estate in the last four years. Prime residences in the British capital have risen more than 60 percent from a low after the financial crisis in 2009, according to broker Knight Frank LLP.

“London has been under-supplied and currently there’s a huge underlying demand for property,” Rob Perrins, Berkeley’s managing director, said in a phone interview.

Net income increased to 131 million pounds, or 84.7 pence a share, in the six months through October from 107.5 million pounds, or 73.9 pence, a year earlier, the company said. Revenue rose 20 percent to 821 million pounds.

The shares were up 8.7 percent at 2,480 pence as of 9:28 a.m. Berkeley has climbed 41 percent this year, giving the company a market value of 3.3 billion pounds.

Berkeley sold 2,294 homes during the period, up from 1,927 last year, and the average selling price increased to 350,000 pounds from 335,000 pounds, according to the statement.

Building Surge

U.K. homebuilding expanded at the fastest pace in a decade in November, with housing starts now 60 percent higher than a year ago, according to a survey by Markit published on Dec. 3. House prices rose in all regions of the U.K. for the first time in more than six years in November, according to Hometrack Ltd.

Berkeley has set a target in June 2011 of returning 1.7 billion pounds to shareholders by September 2021 and 568 million pounds by September 2015.

U.K. Chancellor of the Exchequer George Osborne yesterday said he would impose capital-gains taxes on home sales by non-residents starting in April 2015 as the government seeks to raise revenue and avert unsustainable increases in London property prices. About 30 percent of Berkeley’s customers are foreign, Perrins said.

“It is fair they should pay capital-gains tax but you should only bring it in if you simplify the other taxes,” Perrins said. “We want stability and clarity.”

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