Crossrail's Woolwich station project defies housing slump

A landmark deal that will see Berkeley Homes fund the construction of a Crossrail station at Woolwich looks safe despite fears prompted by the housing downturn.

Berkeley has signed up "in principle" to pump £162m into building the station in return for rights to develop the land on top of it.

One source said it was a hefty sum to pay for the right to build homes in a falling market. He said: "If you have to put money into a non-residential scheme to unlock a residential scheme with demand the way it is, it doesn't seem that logical at the moment."

But Berkeley Homes analyst Chris Millington at Numis Securities told CJ the deal still made good economic sense.

He said: "I think it is something that Berkeley can afford, and which is in its interest."

Millington said the contribution Berkeley is making would be repaid by the better transport links, even in a tougher housing market.

He said: "It is a big site for Berkeley Group and getting the Crossrail station was always going to be a big factor in getting the values up from quite a low level, to what is a reasonable level."

At £16bn, Crossrail will be the biggest civil engineering project in Europe. Work is due to start in 2010.

Berkeley Group declined to comment.