(Bloomberg) -- Berkeley Group Holdings Plc is establishing its own rental housing platform, as the homebuilder attempts to maximize returns in a challenging environment.

The company has identified some 4,000 homes across 17 of its sites as an initial portfolio for its build-to-rent platform, according to a statement Wednesday. To be developed over the next decade, it will broadly represent a 10% increase in the builder’s housing delivery and will be financed by a combination of internally generated funds, debt secured against rental properties and the introduction of third-party capital at the appropriate time.

It comes after the value of Berkeley’s net reservations remained roughly a third lower than the previous year during the 12 months through April, as buyers remained cautious in the face of high interest rates. The new platform will seek to address the severe “shortage of high-quality rental accommodation,” which has already caught the attention of rich investors.

Shares of Berkeley slumped as much as 4% in London on Wednesday, the biggest intraday loss in six months, with some analysts saying the stock remains “fully valued” compared with its rivals. One analyst at Citigroup Inc. saw “modestly lower expectations” for the 2026 fiscal year.

British homebuilders had been reeling from a slump in demand after higher mortgage rates and a cost-of-living squeeze hit first-time buyers. But a steady reduction in home loan costs since last summer eased the pressure, while political pledges to stoke development has boosted confidence.

Berkeley, which builds far fewer homes per year than its main three rivals, felt less of a sales shock in 2023 due to its focus on more affluent, London-based customers. However, Labour’s plans to increase stamp duty for foreign homebuyers is likely to impact the company more than its rivals.

Still, Berkeley delivered pretax profits of £557 million for the year ended April 30 — in line with previous guidance — and increased its net cash to £532 million. It also said it was encouraged by the “tone and substance of manifesto commitments in support of homebuilding and urban regeneration.”

“We are heartened by the strong political consensus behind increasing the delivery of new homes across the country,” Chief Executive Officer Rob Perrins said in the statement. However, “for this to happen, planning policy and public funding needs to prioritise the provision of affordable homes,” he added.

(Updates with decline in shares in the fourth paragraph.)

©2024 Bloomberg L.P.