Overseas property investors recognise the long term prospects of London Olympics
The transformation of East London will be even more remarkable after the Olympics as at least £1.6 billion of private sector money has already been invested to deliver over 6,000 homes and in excess of three million square feet of commercial space, property consultants CBRE said today (Monday 30 April).
The investment is encouraging both new residents and businesses to make the Olympic zone their home and overseas investors in particular have recognised the long term investment opportunity that Europe's largest regeneration project presents, they added.
As a result, the majority of East London's large assets have been funded, or acquired, by international capital from countries such as Australia, Canada, Holland, Qatar, Sweden and Germany.
APG, the Dutch pension fund, along with The Canadian Pension Plan Investment Board, jointly purchased a 50% stake in Stratford City for £870 million and Qatari Diar partnered with UK developer Delancey to acquire the Athletes Village for £557 million.
Outside Stratford, Germany's Deka purchased Pier Walk Greenwich for £97 million and Sweden's Inter Ikea has assembled around 29 acres of redundant industrial land on Sugar House Lane which is the second largest private sector land holding behind Westfield in the locality.
Development has continued apace in the Olympic boroughs despite the economic downturn, against a backdrop of stifled progress across the rest of the UK due to problems with securing funding and finance.
Inter Ikea's Sugar House Lane will be transformed with 1,200 homes, 400,000 square feet of commercial space and a 350 bed Marriott Hotel, a £60 million urban sustainability Crystal Knowledge Hub has been constructed by Siemens in the Royal Docks and Chelsfield have plans for a 2.5 million square feet retail pavilion concept at Silvertown Quays.
‘A lot of people are wondering what will happen to East London after the Olympic Games, but it is clear that there is already a substantial amount of activity,’ said Matthew Black, head of East London, CBRE.
‘Businesses are moving to the area with over 100,000 square feet of Westfield's grade A office space having already been let and the four million square feet International Quarter set to attract occupiers keen to take advantage of Stratford's impressive transport network,’ he explained.
Westfield Stratford has also created over 12,000 new jobs and this is projected to rise to 18,000. Around 4,000 new residents will be moving to rental apartments at the Athlete's Village from as early as 2014.
‘The Olympics is just the beginning, enabling the regeneration of an area that could never have occurred in the present global economic climate. Stratford City alone will offer a total of 13 million square feet of mixed use development with the Royal Docks providing a further 100 acres of mixed use development potential,’ said Black.
‘To put this in context, it took 20 years for Canary Wharf and the Isle of Dogs to go from 0 to 17 million square feet of offices. Unlike other host cities, London’s legacy was planned in advance of the Games, which is why the best is yet to come,’ he added.