Records tumble at Olympics site as industrial area is regenerated
South China Morning Post 20th May 2010Two years before the 2012 Olympic Games are held in East London, records are being broken there. These records are related to construction, not sport. Stratford City, the 73-hectare site hosting the Games, is the British capital’s biggest development.
From next year, Stratford City will have Europe’s largest shopping mall – the 2.9 million sqft Westfield Stratford City – and housing for 11,000 residents, offices for 30,000 people and the Olympic Park.
Half completed, the 39-hectare Canary Wharf estate is Britain’s fastest-growing office market. Five thousand new homes are planned for neighbouring Royal Docks, where Excel, London’s biggest exhibition space, is located.
These construction projects and new transport schemes will contribute to an eastward shift in London’s economic centre of gravity, says Charlie Hart, head of Thames Gateway residential development at estate agency Knight Frank. The latest transport scheme, the East London Line extension linking Hackney with Croydon, opens next month.
Hart says Canary Wharf and neighbouring developments, such as Pan Peninsula, are establishing themselves as prime residential areas.
“The more residential towers go up in the area [Canary Wharf], the more it becomes apparent that it is an appealing place to live,” he says.
East London’s most expensive homes average £539 (HK$6,300) per square foot to buy, at least half the rate for prime central London, but around Canary Wharf they can be in excess of £800 per square foot, a report from Savills says. Sale prices rose 3.3 per cent for luxury East London homes in the first quarter of this year. Rents rose 3.3 per cent for these properties over the past six months.
Russell Hunt, managing director of buying agency Property Hunt, says regeneration schemes have been factored into East London property prices. Its property market is more cyclical than those in established West London areas such as Mayfair and Chelsea.
“East London rents and capital growth are highly dependent on the financial markets,” he says. “In the downturn, as we have just seen, redundancies led to rent reductions due to a smaller number of tenants. However, during boom times, rents and sale prices can soar.”
Although many East End residential schemes were halted during the recession, those that are appearing include Lett Road in Stratford, where developer Thornsett Group has completed a block of 64 apartments. Prices start at £185,000 for one-bedroom apartments. In tandem with East End districts, such as Greenwich, Blackheath and Canary Wharf, the City of London is becoming more desirable. Its largest scheme in 34 years is being built by developer Heron International. The Heron, a 36-storey tower of 284 apartments, will be completed in 2013. Prices start at £415,000.
Lisa Ronson, marketing director at Heron International, says her company wants to help fill the City of London’s housing gap. The area has enough homes for only 8,000 people.