London: Battersea and Nine Elms
LONDON - When it comes to property and residential growth the south London borough of Wandsworth has seen an extraordinary amount of change. The area is now the site of the biggest redevelopment of property in Europe that includes the iconic Battersea Power Station on the river Thames. Spanning from Vauxhall Bridge to the Battersea Power Station the development of the Nine Elms area which when completed will feature 20,000 homes along with shops, offices and green public spaces. Also being constructed nearby is the new American Embassy and two new Underground stations, Nine Elms and Wandsworth Town. Its reported that these costs will be covered by almost a £1billion loan from the government, Battersea Power Station, Wandsworth and Lambeth councils.
Local Market Update
The sale of the flats initially in the Nine Elms went well with many seeing a solid buying opportunity for the area. However sales began to decrease once chancellor George Osbourne made the stamp duty on home sales of £1.5million or more at 12% and 15% for those purchasing a second home. Uneasy buyers as a result of the June 2016 Brexit vote helped to cool the market as well.
As a result of the slowdown in home buyers the Battersea development has amended some of its plans to now use the space originally devoted to future homes to now be developed as office space. This change would bring on the market almost 1million sq ft of office space.
Rob Tincknell, CEO of the Battersea Power Station Development Company told the Financial Times recently: “I could easily see us adding another million square feet [of offices].” “The great thing about a long-term scheme like this is we can adjust with the markets. If there’s no residential market and a very strong office market then we will build offices.”
The most recent announcement of corporate tenants for Battersea Power Station was Apple Computer which will be moving its London headquarters in 2021 occupying 500,000 sq ft in the main building. Also on the property is a planned leisure area and residential apartments with a future 700,000 sq ft of office space planned for future construction. Mr. Tincknell also said that one building in phase three of the property scheme was being considered for a possible ‘change of use.’
Also for phase three was the recent news from the Battersea property developers that contractor Bouygues UK will not extend the firms involvement in the Battersea Power Station project. Bouygues UK was awarded the contract for phase three development in 2015.
The original plans for phase three comprised 1,305 homes, 350,000 sq ft of commercial space and a new pedestrianised high street connecting the Northern Line extension station to the south of the site with the Power Station itself.
If you want to buy a Battersea property one London property firm, Foxtons, is listing new flats at Battersea Power Station with Studio units going for £1,100,000 to £1,400,000, one bedroom unit flats at £650,000 to £1,800,000 and 2 bed flats at £870,000 to £1,300,000. They cite as key features of the property include access to the 5,000 sq ft private residents club, on-site grocery, cinemas and a gym. Also mentioned is the closeness of the new American Embassy.
Saved by the Tube?
Could the Battersea property scheme see a return to increased interest from potential home buyers?
One chance could be from the Underground rail network once the extensions of the Northern Line are completed. The first of two giant tunnel boring machines has started the 3.2km new route from Kennington to Battersea. The expected completion for use should be around 2020.
The London mayor, Sadiq Khan, said: "It’s great news that we are going to begin tunnelling for the Northern line extension. Extending the line to Nine Elms and Battersea is going to be a real boost to south London, with the improved transport link helping to provide thousands of homes and jobs for Londoners."
Mark Wild, managing director of London underground, said the extension "will bring Battersea and surrounding areas to within 15 minutes of the West End and City”.
Port of Cork
Another large scale regeneration was just announced for the Port of Cork docklands that will have similarities to the Battersea scheme. The €1bn development will feature a major hotel along with office and leisure facilities.
Its considered to be one of Irelands biggest investment projects. Its being called the ‘Time Square Development’ and is expected to finally start development for the area with plans for a Marriott hotel to meet the increasing needs of hotel capacity for Cork. Additional property for construction and development is the adjacent Horgans Quay. The development of the Port of Cork docklands site had for years been considered for regeneration. One plan was made by Howard Holdings including a €70m bridge over the River Lee to make better access to the docklands. Because of Irelands financial troubles the plan was not carried forward.