Our recent development in Copenhagen Wharf, Limehouse is proving extremely attractive for Asian buyers.
The apartments offer exceptional exchange rate value for Hong Kong investors, and in shifting buyers’ away from the real estate market in central London, also exposes them to one of the fastest developing parts of the city.
There are a number of factors that act as a draw to the often overlooked area of Limehouse:
Firstly, Limehouse sits within the corporate catchment area – busy business districts such as Canary Wharf are a mere 5 minutes away. Accordingly, the area is highly valued by corporate buyers.
The accessibility of this location is exceptional and will only improve once the CrossRail is completed in 2018. Its connectivity is enhanced by the bus links, the DLR rail network, and other links to Zone One locations. City Airport is also within easy reach for the business traveller.
Being positioned within the E14 catchment area is an advantage to any landlord considering a corporate let. Currently we are seeing high capital appreciation and good rental demand for the benefit of our clients.
Most of Limehouse property offering prices are competitive, and given its hot-spot location it’s actually very affordable relative nearby alternatives.
Prices in the area continue to trend upwards at a sustainable pace, which is a reflection of the strong economic fundamentals at a local level.
According to Knight Frank’s most recent residential report, Canary Wharf prime residential real estate experienced 9.2% price growth in the past 12 months – greatly exceeding the overall average figure of 2.8% for prime central London real estate, and 4.5% for prime real estate in outer London.
Property values are set to increase further as new build property developments coming online pitch their sales in line with expected growth in prices. In 2014 it was reported that demand for Canary Wharf and Limehouse property had forced average price of new build schemes to approximately £1,100 per square foot.
By 2015 the figure had risen to £1,200 and Knight Frank has forecasted the 2018 price per square foot to reach £1,750. Transport links and infrastructure have historically played a key part in property price performance, especially in London.
In a city where commutes can sometimes be long, those working in the business districts are prepared to pay a premium to live within easy reach of their desk.
Canary Wharf is tipped to be CrossRail’s biggest winner, with international property agent JLL predicting a price growth of 44% by 2020. There has been an increasing demand for buy-to-let investments from overseas over the past 12 months, despite economic uncertainty caused by Brexit. The fall in the value of the pound may have been one of the reasons for this, especially as the pound is showing no immediate signs of losing further value.
It hardly needs saying that the diminished value of the pound offers a unique opportunity to buy into one of the strongest performing property markets in the world. Moreover, rental yields remain strong, helping to encourage continued inward investment into London.
Although it was a relatively slow start to 2017, due most probably to political factors (Brexit in particular), and related economic uncertainty undermining confidence, there are already signs of resilience.
As we enter into Autumn, transactional activity is expected to increase as smart money moves in and the economy adjusts to the new reality, leading to a robust end of the year. Again, the fall taken by sterling is expected to boost the attractiveness of the London property market, especially in areas with strong underlying fundamentals such as Limehouse.
Freddie Toomer is a Hong Kong based Sales Director for AI London, a property sourcing and management company.