Over recent years, the Docklands area of London has proved one of the best investment opportunities in the capital, if not the UK. With average values in the region of £700 per sq ft, the area offers tremendous value for money for investors looking for value outside of Prime Central London, where prices of more than £3,000 per sq ft are being achieved.
Studios and one and two-bedroom apartments are particularly popular with investors owing to the high level of demand from tenants, many of whom want to live close to Canary Wharf and the City. The demand is so strong that properties can be quickly let or sold, meaning that in addition to a healthy yield of 4.8%*, investors typically enjoy few void periods and a relatively liquid asset compared to other property holdings.
While the rest of the London market appeared virtually paralysed during the build-up to the General Election, the Docklands, Canary Wharf and East London property markets did not skip a beat. This is a remarkable feat, considering how supposedly reliant the area is on a robust and healthy financial services sector to provide the thousands of tenants and buyers required to fill the apartments in the wider Docklands area – which incorporates Canary Wharf, Limehouse and Surrey Quays.
This suggests that the area is no longer a bi-product of the financial services industry on which Docklands’ success has been built – it is now a self-sufficient community in its own right that can attract people who don’t work in Canary Wharf or the City, but are just looking for a pleasant and enjoyable place to live.
This should really come as no surprise given the excellent transport links the area enjoys (DLR and Jubilee lines and City Airport), the high-quality, modern homes and the local employment opportunities.
In addition to this, The Canary Wharf Group, the owner and developer of the Canary Wharf Estate, has focused on improving public amenities in order to create a genuine sense of community and wisely diversified the businesses and industries it has attracted to the area so as to not be over-dependent on global banking giants. This has helped create a self-sustaining and buoyant property market and means the area is one of London’s top investment hotspots in the current market.
* Rightmove, July 2015