Average property prices in London’s Canary Wharf soar due to high demand
Strong demand has forced average pricing in Canary Wharf up to around £750 per square foot, with some of the best units at new schemes pushing towards £1,100 per square foot, a new analysis shows.
Annual price growth accelerated to 14.4% by the end of 2013, notably higher than the 12.1% Central London average, according to the report from JLL.
‘Prices are soaring around The Wharf. The second hand market is as active now as it's been since the credit crisis. At many developments, prices are 15 to 20% higher than a year ago, which is staggering. It's not just the sales market that's motoring, the rentals market is flourishing, too, which is encouraging news for both overseas and domestic investors,’ said Tony Usher, associate director of residential for the JLL Canary Wharf office.
‘The dynamics of the Canary Wharf housing market have changed quite a bit over the past few years. Importantly, it's no longer Wharf workers only. We have seen many people move here from West London or South London, attracted by the bright, new build product on offer, as well as the lively leisure offerings and great connectivity,’ he explained.
‘Canary Wharf itself has great shopping, restaurants, gyms and so on, but close by are Westfield Stratford and escape routes like City airport. People are happy to commute into the City and the West End from here, and it will get even easier once Crossrail arrives,’ he pointed out.
‘As such, people love to buy and rent here; we're never short on demand, which adds to Canary Wharf's appeal to investors. They are happy with returns and rarely see voids, which leads many to come back to buy more stock. Domestic investors are back in the market, too, and are taking advantage of the resurgence of Canary Wharf following several lacklustre years and with one eye on the boost from Crossrail,’ he added.
The report suggests that new build property market in Canary Wharf is particularly thriving. For example, from 2011 to 2012 there were only 600 sales, but in 2013 alone over a 1,000 units were sold.
The biggest selling schemes last year were Baltimore Tower by Galliard Homes, located close to South Quay DLR station and designed by world renowned architects Skidmore, Owings & Merrill, where JLL sold over 330 units. Lincoln Plaza, central to the Millharbour regeneration project and featuring breathtaking views from the 31 story tower and unusual features such as a 22nd floor four storey winter garden, where there were approximately 250 sales.
In addition, there were also over 100 purchases at both the Providence Tower and Horizons. Such has been the success of these schemes. The report says that there are now only 77 new units on the market in the whole of Canary Wharf.
Looking at 2014 and ahead, the surging residential development activity continues with over 1,200 units currently under construction, approximately 360 of which started during the second half of 2013. In addition, two tall tower schemes, The Hertsmere and Landmark North, are likely to pass through planning this year with The Hertsmere being the tallest residential building in the UK once completed.
The report also says that this year will also be noteworthy for the progression of the Canary Wharf Group's next phase of development on the Estate. The group are expected to submit a new planning application to increase the residential element of Wood Wharf from around 1,200 units closer to 3,000 units.
JLL also acted on behalf of Essential Living in the acquisition of land for Canary Wharf's first ever Private Rented Sector only development, where Essential Living will launch their Helix scheme for rent in 2017.
‘Canary Wharf has proven to be a particularly robust residential market over the last five years. However, it is only recently that it has emerged from a pure commercial district to a truly mixed use environment with a real sense of vibrancy and community feel,’ said Max Wilkinson, director of new development at JLL.
‘Already benefitting from excellent communication links, the addition of Crossrail in 2018 will only enhance residential values further. These factors, amongst others, are making Canary Wharf a highly sought after place to live. The outlook is bright, as over the next ten years, the Canary Wharf skyline will be revolutionised by some of the most exciting and advanced developments that London has seen,’ he added.