East London residential Our Patch, Our View Q3 2016 - CBRE
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East London residential Our Patch, Our View Q3 2016
2–3
CBRE East London
Our patch Canary Wharf
Heron Quays
CBRE East London South Quay
Tower Hamlets Newham
Hackney
Redbridge Crossharbour
City of London
Barking and Dagenham
Overview
Overall, growth in the London market Investors accounted for 82% of sales: an
remained robust, albeit with a slight encouraging sign that investor sentiment for
moderation in Q3. Nationwide recorded the East London and the wider London
annual growth of 7.1%, down from the 9.9% residential market remains positive, despite
recorded in Q2. This growth was driven by the additional rate of Stamp Duty. Overseas
strong activity in the first quarter of 2016, as investment levels also remained mostly
investors clambered to avoid paying an unchanged compared with Q2, indicating
additional 3% Stamp Duty on their that international buyer interest has persisted
purchases. Since then, activity in Greater through an uncertain few months.
London has slowed with sales volumes down
13% overall in the first half of 2016 compared Market distortions aside, the fundamental
with the same period last year. drivers of London’s property market are not
affected by the decision to leave the EU. In
Some four months have now passed since fact, the declining interest rates and the
the UK voted to leave the European Union, continued strength of the mortgage market
Havering and the industry is closely monitoring its continues to underpin demand, particularly
impact. However, the distortionary effect of in the main stream market, which is further
the new Stamp Duty rules means that there stimulated by the London help-to-buy
will still be some time before we can draw scheme. In addition, the fall in Sterling has
any conclusions. generated renewed interest from
international buyers.
Bexley CBRE East London did experience a
slight fall in activity in the third quarter, We hope you enjoy the latest edition of Our
as the impact of Stamp Duty and Patch, Our View. If you would like any further
post-referendum uncertainty continued to information please do not hesitate to contact
feed through the market. In addition, the a member of the team, whose details can be
third quarter is typically quieter as people found at the back of this report.
enjoy their summer breaks. However, while
activity declined, it still remained robust.
Southwark
Lewisham Royal Borough of Greenwich Joseph Selby
Senior Director
T: +44 (0)20 7519 5913
E: joseph.selby@cbre.com
4–5
East London: The metamorphosis of East London has The evolution of the tech industry has backwater into a top residential and leisure As well as a creative migration, new industry further open up East London, bringing
an overview been in motion since the 1980s when a
pioneering population of artists and other
brought further workers and residents to East
London. What began as a cluster of digital
location. Olympic stadiums and arenas have
been recycled, with West Ham United taking
and significant regeneration, East London
has also been the benefactor of several
several other property markets into focus.
creatives established themselves in companies surrounding Old Street residence in the redeveloped Olympic infrastructure developments. London City The multifaceted evolution of East London
Shoreditch, Hoxton and Clerkenwell. This roundabout has resulted in an explosion of Stadium, and the Copper Box Arena now Airport, opened in 1986, now serves 4.3m has translated into strong growth of its
Over the last several decades laid the artistic foundation of these tech companies throughout markets such as home to London Lions Basketball Club. passengers a year, with a current investment residential property market. To August 2016
East London has been neighbourhoods, transforming them and
boosting their appeal – as a result, these
Shoreditch and Clerkenwell. The area now
hosts more than 10,000 tech companies
Homes at the former Athletes Village, now
known as East Village, are also in high
programme aimed at increasing this to
8m by 2030. The extension of the Jubilee
house prices in East London increased by
14.1%, compared with 12.1% across wider
completely transformed. districts now command some of the highest generating £12.5bn of annual revenue. demand. This development, along with Line in 1999 made areas including Canary London. Over the longer term, prices have
It is now a highly desirable house prices in the capital. Amazon will also join the ranks in 2017; its
new UK headquarters next to Liverpool Street
other schemes spread across the Queen
Elizabeth Olympic Park will deliver 11,000
Wharf, North Greenwich and Stratford more
accessible. A further benefit comes with the
risen 78% over the last five years, outpacing
wider London by a margin of 12%. This
place to live and new With the unabated growth in popularity of station will host 5,000 employees. new homes to the area. Westfield Stratford recently introduced 24 hour weekend strong growth is set to continue as the
infrastructure and industry
these City Fringe neighbourhoods, the City, one of the largest urban shopping service. The opening of Crossrail, now titled volume of regeneration increases and the
migration of artists, creatives and However, as demand for tech space in the centres in Europe, also makes Stratford a the Elizabeth Line, in 2018/19 is going to migration to the east continues.
continues to draw people fashionistas has continued east over time to City Fringe has grown, so have rents. As a major retail and leisure location. Building on
new, previously overlooked areas. This result, the tech industry along with it its the success of the Olympic Legacy, Here Average house price index
to the area. As a result, evolution has brought brands like Burberry workers, has spread further east to more East is based in the heart of the Olympic
this region of London is and other high end retailers to Hackney affordable areas. An example of this is Park set to create a new hub for individuals 200
Central, and attracted art institutions such as Fish Island in Hackney Wick – with its major and companies in the arts, education and
seeing a significant amount the London Film School and the English concentration of artists and studio spaces, tech industries. As if to cement its evolution, 180
Average house price index
of development, with National Ballet from their historic homes in this canalside community is a hub of earlier this year Stratford was officially
(Base = Jan 2007)
West London to Leamouth Peninsula and its creativity and innovation. Set alongside re-zoned on London’s tube map, bringing 160
areas like Stratford and brand new community, London City Island. long-established residential and business it into zone 2, and thereby more closely
the London Docks now communities, this has become one of associated with Central London. 140
The next phase of East London’s London’s most exciting new destinations.
putting East London in the transformation came with the completion of Based in East India Dock, Republic is Major regeneration in East London is also 120
global spotlight. Canary Wharf in the 1990s. This brought a
new population of financiers to the area,
another new campus for start-up companies
where, at less than £35psf, rents
underway in Greenwich, with the Greenwich
Peninsula development set to deliver 100
many of whom chose to live in the now will be half of those paid in Shoreditch and over 15,700 new homes, 900,000 sq ft of
trendy Shoreditch and surrounding areas. the West End. business and retail space, numerous leisure 80
Today Canary Wharf is set to become a top facilities and nearly 50 acres of green space
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
residential location in its own right. There are The summer Olympics in 2012 placed upon completion.
a total of over 20,000 new homes in the another East London market on the
East London London
pipeline across the Isle of Dogs, over 3,000 residential map. Since the end of the games,
of which are on the Canary Wharf Estate. Stratford has been transformed from derelict
6–7
Sales overview CBRE East London Reason for purchase Q3 2016 Owners
Investors
Q3 2016 sales snapshot % Percentage
Despite the impact of Brexit 90
and additional Stamp Duty, Average sales value £589,160 82%
70
buyer appetite remained
75%
Number of sales
Average new build £psf £912
strong in the third quarter. 50
Specifically, investors Average resale £psf £625 30
remained highly active; an 25%
encouraging sign that they Highest £psf £1,788 10 17%
have not been discouraged Q2 2016 Q3 2016
by the additional 3% levy.
A successful launch of the final building at Purchaser origin Q3 2016
London City Island, Caledonia House, % Percentage
generated a large number of sales this
quarter. The Stage in Shoreditch also
UK 61
continued to be a popular development,
Asia 26
particularly among overseas investors.
Other 9
High levels of interest remain at Precision Europe 4
in Greenwich, where UK investors were
the main buyer group in Q3.
CBRE Research, Q3 2016
Overall, these new-build developments
contributed to a total sales volume of
nearly 100 for CBRE East London in Q3.
The average sale value was £912psf, down Sales forecast
21% from Q2. This largely reflects the sale
of lower value units, with 14% of sales over The summer holidays coupled with the
£1,250psf in Q3, compared with 40% in Q2. continued impact of Brexit and Stamp Duty
In contrast, 57% of sales were between caused a relatively muted third quarter. We
£750 and £1,250psf this quarter, compared expect activity to pick up during Q4, as an
with 37% in Q2. Overall, the prices for all improvement in confidence and pent-up
exchanges in Q3 ranged from £534psf demand, as well as a number of high profile
up to £1,788psf. launches translates into sales. Overall, we
expect domestic demand to remain strong
We saw quite a significant shift in buyers this as the market continues to be underpinned
quarter. At 61%, UK buyers accounted for the by the favourable credit environment. In
largest portion, while buyers from Asia made addition, the Bank of England has reduced
up a further 26%. This compares with Q2 banks’ capital requirements. This has freed
where there was an approximate even split up approximately £150bn of capital, a portion
between UK and Asian buyers, each of which could be directed into the mortgage
accounting for 45% of sales. Positively, we market. Lower interest rates could also lead
continued to see a high proportion of to a further boost on the demand side. The
investors across our developments in Q3, weakening of Sterling has resulted in
signalling that they have not been deterred renewed interest from overseas, and we
by the additional Stamp Duty introduced in expect the relative discounts offered by
April. Investors accounted for 82% of buyers weaker currency to continue to generate
this quarter, up from 75% in Q2. opportunities in the near term.
8–9
Case study: Spire London
Spire London is a 67-storey tower of 861 Apartment interiors
suites, one, two and three bedroom
apartments and penthouses, set in Argent Design has worked closely with
landscaped open space on West India Greenland Group to create apartments with
Quay by London’s Canary Wharf. At 771ft bright open interiors with 2.6 metre (8.5ft)
in height above ground, it is the tallest high ceilings in the living spaces and
residential tower in Western Europe. bedrooms, bordered by floor-to-ceiling
Delivered by China’s Greenland Group, windows which will provide an abundance
Spire London has just started construction of natural light. Features include comfort
and is estimated to complete in 2020. cooling, large living areas, custom-designed
open-plan bespoke kitchens and boutique
The development hotel-style bathrooms with high quality
finishes in natural materials including timber
Located in Hertsmere Road, adjacent to and stone.
Canary Wharf, Spire London is directly
fronting onto the water of West India Quay. Kitchen specification
The tower has been designed to provide
uninterrupted panoramic views over the –– Bespoke kitchen units in a combination
whole of London capturing the Thames, of veneered and lacquered finish
Canary Wharf, the City of London and
the capital’s numerous famous and –– Reconstituted stone countertop and
historic landmarks. Its striking and unique splashback
architecture is inspired by the nautical
history of the site and by the orchid, –– Miele or similar induction hob, oven
a flower cultivated in China for more and microwave
than 3,000 years.
–– Siemens or similar dishwasher,
Spire London will provide a range of fridge freezer
amenities. The 35th floor Saffron Club spa
will include a swimming pool, jacuzzi and –– Stainless steel under-mounted sink
lounge areas, alongside a gym and fitness with mixer tap
studio. A cinema room will provide the
perfect venue for entertaining family and –– Integrated wine cooler
friends, while residents will benefit from
additional community space and an open –– Custom-designed compartmentalised
deck garden on the third floor. To either cupboards
side of the tower are the three-storey
pavilion buildings providing over 5,000 sq ft Bathroom specification
of high quality retail space with residents’
roof-gardens above. –– Polished natural stone floors and walls
At night, feature lighting around the top of –– Bespoke fitted vanity unit with stone
the tower will reinforce the landmark countertop
silhouette of Spire London, complemented
by accent lighting to the trees, benches and –– Over basin mirror with anti-mister pad
paved piazza, creating a striking impression and concealed cabinet
to the approach to the building after dark
–– Baths with overhead shower, hand shower
Transport links and mixer taps
Spire London is conveniently located just a –– Walk-in shower with glass enclosure
short walk from Canary Wharf underground
station (Jubilee line) and Canary Wharf and –– Wall-mounted WC with concealed cistern
West India Quay DLR stations, providing and soft-close seat cover
access to Bond Street, Bank and City
Airport within 15 minutes. It also has the –– Chrome bathroom fittings
added benefit of the new Crossrail link due
to open in 2018. A further benefit is the –– Chrome heated towel rail
recently introduced 24 hour service of the
Jubilee Line.10–11
Development Consultancy Sales Lettings Land
Alan Selby James Bearryman Samuel Anderson Matthew Black
Executive Director Associate Director Lettings Manager Senior Director
T: +44 (0)20 7519 5902 T: +44 (0)20 7519 5917 T: +44 (0)20 7519 5931 T: +44 (0)20 7182 3474
E: alan.selby@cbre.com E: james.bearryman@cbre.com E: samuel.anderson2@cbre.com E: matthew.black@cbre.com
Joseph Selby Darren Gibbinson Edward Bonsu James Graham
Senior Director Senior Sales Negotiator Senior Lettings Negotiator Associate Director
T: +44 (0)20 7519 5913 T: +44 (0)20 7519 5920 T: +44 (0)20 7519 5918 T: +44 (0)20 7519 5925
E: joseph.selby@cbre.com E: darren.gibbinson@cbre.com E: edward.bonsu@cbre.com E: james.graham@cbre.com
Matthew Leitch Tom Lyne Marcin Lukasiewicz Alex Lee-Bull
Senior Director Senior Sales Negotiator Lettings Negotiator Associate Director
T: +44 (0)20 7519 5927 T: +44 (0)20 7519 5932 T: +44 (0)20 7519 5908 T: +44 (0)20 7519 5926
E: matthew.leitch@cbre.com E: tom.lyne@cbre.com E: marcin.lukasiewicz@cbre.com E: alex.lee-bull@cbre.com
Helene Parry Georgina Pope Marc Dobber
Associate Director Senior Sales Negotiator Surveyor
T: +44 (0)20 7519 5910 T: +44 (0)20 7519 5906 Property Management T: +44 (0)20 7519 5914
E: helene.parry@cbre.com E: georgina.pope@cbre.com E: marc.dobber@cbre.com
Sam Spittles James Mansfield Rhonda Cole
Associate Director Senior Sales Negotiator Associate Director
T: +44 (0)20 7182 2443 T: +44 (0)20 7519 5911 T: +44 (0)20 7519 5916 Research
E: sam.spittles@cbre.com E: james.mansfield@cbre.com E: rhonda.cole@cbre.com
Susie Middleton Nicola Freeman
Jennet Siebrits
Development Consultant Property Manager
Head of Residential Research
T: +44 (0)20 7519 5923 T: +44 (0)20 7519 5912
T: +44 (0) 20 7182 2066
E: susie.middleton@cbre.com E: nicola.freeman2@cbre.com
E: jennet.siebrits@cbre.com
Scott Cabot
Operations Associate Director
T: +44 (0)20 7182 2362
E: scott.cabot@cbre.com
Susanne Munroe
Operations Director
T: +44 (0)20 7519 5904
E: susanne.munroe@cbre.com
Please be advised that the statistics in this report are calculated from CBRE East London’s sales data. Values and prices
are calculated from sales data from the selection of developments we are currently involved with and are not representative
of the whole East London market.
To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at: www.cbre.com/researchgateway
CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt
their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their
accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and
cannot be reproduced without prior written permission of CBRE. Some images are computer generated images for indicative purposes only. ©2016 CBRE Ltd.You can also read
