UK home builder Barratt has started work on the first major residential section of one of London’s key strategic regeneration schemes. The £160 million transformation of Dalston, Hackney, is now under way and when complete will provide a total of over 550 new homes, shops, a library and archive.

Work has begun on the first batch of 250 homes in buildings rising to a maximum of 17 storeys, with the first apartments ready by around June 2009. At the heart of the scheme will be Dalston Square, a major new town centre space around which the new homes, shops and restaurants will be built in a range of striking modern buildings.

Barratt East London managing director Alastair Baird said:

“It’s a tremendously exciting scheme that’s great news for Hackney and inner-London as a whole, and we are delighted to be part of it.”

The company said more than 30 of the new homes were reserved ahead of the sales launch, with interest from the real estate investment sector believed to be high.

Barratt was selected for the project by Hackney Council, the Mayor of London’s office, Transport for London and the London Development Agency.

The majority of homes for sale in the first phase of Dalston Square will be one-bedroom apartments aimed at first-time buyers, at prices from £265,000.

A commercial property giant says investment activity in the sector could be returning to normal as it posted high enquiry and rental levels. However, UK-based Segro also said weaknesses in the credit and real estate investment markets had hit UK commercial property development values.

In the UK and Europe, Segro is responsible for over 340,000 sq m of developments currently under construction, with just under half of them already pre-let or sold. Segro chief executive officer Ian Coull said:

“We are seeing some signs of investment activity returning generally and will, ourselves, be seeking to test the market in the coming months with a view to possible renewed recycling of capital – both in the UK and Europe.

“Despite the continuing negativity of sentiment in investment markets, occupier demand has held up well across all our key markets, with further healthy letting volumes achieved.

“Our balance sheet remains strong. Segro remains primed and well placed to use the current dynamic market conditions to drive value over the longer term.”

He added the firm would

“remain vigilant”

in managing risk exposure and had adopted a cautious approach on speculative developments in the UK and in Western Europe.

The firm’s first interim management statement of 2008 also revealed the it has invested c.£200 million in previously announced acquisitions and in its development pipeline, leaving the group with net debt of c.£2,010 million.

Further training and a development of IT resources are among a 12-point financial plan released by the government of Abu Dhabi on Monday. The Department of Finance (DoF) said the five-year scheme was designed to fit in with the economic aims of the Emirate’s overall policy agenda.

The new strategy was unveiled at the Emirates Palace by His Excellency Hamad Al Hurr Al Suwaidi, the department’s undersecretary, and His Excellency Mohammed Sultan Al Hameli. HE Hamad Hurr Al Suwaidi said the objectives were

“to provide the community with the highest standards of living and economic prosperity.”

The document is likely to draw the attention of real estate investment professionals with interests in Abu Dhabi, which is expected to hit a GDP of $300 billion ( by 2025 ) by development of non-oil sectors.

HE Hamad Hurr Al Suwaidi added:

“The DoF Strategic Plan supports the Abu Dhabi government’s policy agenda to achieving economic growth by providing financial best practices.

“It signals the proactive participation of the DoF in the overall developmental goals of Abu Dhabi, which will be marked by the three key pillars of competitiveness, excellence and pioneering initiatives.”

The 12 priorities call for implementing the latest technologies, further boosting the skills of DoF employees, adopting world-class financial and accounting systems, providing policy advice to government, and aligning strategy with financial planning and budgeting.