5 New London Hotspots Where Resi Development Values Will Rocket
Knight Frank’s latest London Development Hotspots report identifies the 18 areas of the capital which will see the largest growth in residential development values between now and 2021.
Among some of the usual suspects like King’s Cross and Hackney were five new areas where developers would be advised to start building. Knight Frank pointed out cheaper, more affordable areas will see better growth than prime central areas.
Of all the new areas identified by Knight Frank, Canada Water is expected to see the strongest performance over the next three years, with residential development values rising by 50% from £900/SF to £1,350/SF.
The Canada Water Masterplan, led by British Land, is a £2B project to create a major new town centre within Southwark. This will comprise 3,500 new homes, offices, shops, restaurants and public spaces, including a three-acre park, a cultural and leisure centre and a new campus for King’s College London. Work is underway on a mixed-use, residential-led development by Notting Hill Housing and Sellar Developments on an 8-acre site in the heart of Canada Water.
“The new masterplan, coupled with the existing transport links, will serve to generate a greater rate of growth than in the wider area,” Knight Frank said.
Hip and grungy Camden will see the next-highest growth, with resi development values rising 36% from £1,100/SF to £1,500/SF. The appeal of existing attractions like the famous Camden Market plus the proximity to developments like King’s Cross Central and the redevelopment of Euston Station will boost its appeal.
Although it is identified as a new area, Lisson Grove is right next to already-posh Regents Park, St John’s Wood and Marylebone.
“Its relative affordability compared with prime central London makes Lisson Grove well placed to benefit as buyers widen their search areas,” Knight Frank said.
Resi development values are expected to rise 32% from £1,400/SF to £1,850/SF in 2021.
Southall is expected to see development values increase 25% to £750/SF. The West London area will see a significant reduction in journey times once Crossrail trains are in operation in 2019. As of yet, there has been very little development activity in the area, but there are a number of large projects in the pipeline that will enhance the area’s amenity offering, as well as deliver new homes. There is one development under construction within a 15-minute walk of the Crossrail station, with a further eight developments in the pipeline with permissions for 4,489 private units.
Wood Green’s potential growth of 25% to £750/SF comes with a pretty heavy caveat. The local authority, Haringey, has earmarked more than £3B for development in Wood Green, which would include 60K SF of new employment space and the potential creation of 4,000 jobs. The development would also include 7,700 new homes and a new town centre with shops, restaurants and cafés. However, the development, a joint venture with Lendlease, has been the subject of an internal row in the local Labour Party, and is far from certain to go ahead.