London property developers are marketing new flats close to the route of the capital’s next big investment opportunity - an east- west rail link set for completion in four years’ time.
Crossrail, a 117-kilometre railway line, will run from Reading and Heathrow Airport in the west of the capital to Shenfield and Abbey Wood in the east, and is already pushing up house prices along the route. Furthermore, agents predict even bigger investment gains when the route completes.
According to an analysis from Savills, house prices in most areas within a 500-metre radius of the planned new stations along the route have been rising faster than those farther away.
JLL predicts houses near stations will increase by up to 53 per cent between now and the end of 2020 as more and more investors pile in.
Many of these lie in previously poorly connected parts of London which investors hope will quickly become new investment hotspots.
Great Portland Estates is one of the developers already working on plans to convert a central site along the route, a former post office sorting office in Fitzrovia – an area north of Oxford Street often inhabited by companies that would prefer to base themselves in neighbouring Mayfair but can’t afford it.
Although often considered an upmarket neighbourhood and one-time home to celebrities including Ian McEwan, Griff Rhys Jones and Guy Ritchie, Fitzrovia also includes some areas of high deprivation. It means that the Office of National Statistics classifies the area as “environmentally deprived”.
Last week construction work began to convert the £500 million (Dh2.87 billion) former Rathbone Place sorting office into 142 luxury apartments - 129 have already been sold, including a handful to buyers from Bahrain and the Middle East, fetching the developer £220.2m.
The controversial Make-designed development will also comprise 5,700 square metres of shops and offices as well as a semi-private garden square which members of the public will be able to use during the day time.
Prices start from £2.97m for a two-bedroom flat.
“[In part thanks to Crossrail] Fitzrovia is moving ahead and becoming the destination neighbourhood it deserves to be,” says Charlie Walsh, director of residential development sales at Savills, one of the agents on the scheme.
Q&A
What is Crossrail?
One of Europe’s largest railway and infrastructure construction projects. In December 2008 Transport for London and the Department for Transport signed an agreement committing them to financing the project to the tune of £15.9bn with construction work starting in 2009.
How long has it been planned?
Crossrail has been on the drawing board in London since 1948 in an attempt to better connect east and west London. Similar projects were also touted in the 1970s, ‘80s and ‘90s.
Why is the Rathbone Square scheme controversial?
Great Portland Estates bought the 2.3-acre Rathbone Place sorting office for £120m in 2011 (before the former owner Royal Mail was privatised). Westminster council granted planning permission to convert the site into flats, which is expected to generate the developer £97.5m in profit. It fuels claims from critics that the taxpayer lost out during the Royal Mail privatisation and that the venerable UK postal operator’s property portfolio was undervalued.
What else is Royal Mail selling?
Royal Mail owns unusually large sites in prime areas around London and elsewhere in the UK. According to its 2013 prospectus, the total value of its freehold properties stands at £787m and its leasehold properties are worth £318m. However, the Labour Party claims three more [Royal Mail] sites earmarked as surplus to requirement are worth as much as £1bn each - Mount Pleasant, Nine Elms and Paddington.
lbarnard@thenational.ae
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