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Asian Developers Turn To Rental At Giant Nine Elms Scheme

A view of Nine Elms from Battersea toward Vauxhall station

The Asian developers of a 1.7M SF scheme in Nine Elms have started leasing flats at the development for the first time.

R&F and C C Land said in a statement that CBRE and JLL had been appointed leasing agents on 250 units at the 12-building Thames City scheme. The scheme will overall comprise 1,400 new homes.

When the scheme was first conceived, information on the development did not specify that any of the units would be for rent, only for sale. The pair did not specify in which of the 12 buildings the rental units will be situated. The first building to be completed, No. 8, comprises 298 flats and will be ready to welcome apartments in the autumn.

In April, R&F sold its 50% stake in the scheme to C C Land for £168M, a significant discount to its previous valuation of £289M. After the sale it stayed on as development manager. 

R&F had a portfolio of 4.4M SF it was developing on the south bank of the Thames between Vauxhall and Battersea, with an estimated construction cost of £3.6B.

Since the three projects it was involved in were conceived, it had already decided to earmark 650K SF of its developments for office space, 30% more than in the original plans. And now it is also earmarking some of the scheme for rented residential.

It said it had made the move because of the sharp rise in rents in the area, not because it was having trouble selling the apartments. Last year, the Telegraph reported that sales had been slow at R&F’s London projects. 

“Our aim is for a five-star service regardless of whether you are a landlord, resident or visitor, and we have seen so much positive energy in the lettings market and we are confident JLL and CBRE are the perfect choice to deliver that standard,” R&F Properties (UK) Deputy Director of Estates Richard Chan said in a statement.

“Residential sales are strong at Thames City as buyers recognise the exceptional amenities we are delivering and the great transport connections to Nine Elms, now enhanced by the Northern Line Extension. But we are also keen to offer an opportunity to rent at Thames City and look forward to welcome a wider range of customers through CBRE and JLL.”

The lettings market remains competitive, R&F said, with stock levels down 40% compared with July 2021, which has led to rents rising significantly this year. Achieved rents are up 18.3% in Q2 2022 compared with Q2 2021.

“With a resilient rental market — particularly with the return of overseas students, who account for around 60% of our tenants in Nine Elms — we are expecting a high level of competitive interest for these rental units at Thames City,” JLL Residential Associate Director Lyre Liu said in a press release. 

In June, R&F secured £772M of debt from a consortium of lenders to restart one of its projects, One Nine Elms, which had previously stalled.