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London Property Market 20 October 2015

Canary Wharf Investment Report

Already well established as one of Europe's pre-eminent financial centres, Canary Wharf is becoming an increasingly high quality residential location supported by numerous new bars, restaurants and excellent infrastructure links.

  • Between December 2010 and June 2015, average new home sale values in E14 rose by 21.5%
  • In the first half of this year were 11.3% higher than the average sold value in 2014

Despite the increase in the development pipeline, the continuing high level of off-plan sales suggests that oversupply will not be an issue going forward. Indeed, current Canary Wharf average values per sq. ft. (ca. £1,150) look good value compared to central London (ca. £1,500 per sq. ft.) and represent an attractive option for both investors and owner-occupiers.

Further growth

We forecast that average new build values will rise by a further 10% in 2016, with solid growth prospects thereafter as CrossRail nears completion and the planned commercial development and leisure amenities are delivered.

The investment case for Canary Wharf is also compelling. Yields are higher than in central London and in many of the emerging markets in the outer zones. Moreover, the area is effectively being developed as a high quality self-contained village within London, as opposed to simply receiving new residential development and little else (as is the case in some other parts of the capital). This provides a level of comfort with regard to future investment risk, equally important as absolute returns.

The area is set to expand considerably, with new commercial property development anticipated to accommodate a near doubling in employment within two decades. The residential pipeline is also significant, with demand high - only 6% of units under construction remain unsold.

The final piece in the jigsaw will come with the arrival of the CrossRail extension in 2018 which will bring journey times to the West End (Bond Street)within 13 minutes and the City (Liverpool St.) to just six minutes. This will add to the existing Jubilee Line and Docklands Light Railway links, together with London City Airport which is less than three miles away.

Regeneration, including major infrastructure provision, typically triggers a rise in both property demand and values. Annual sales in E14 have been trending upwards over the past five years with half year figures for 2015 up on 2014. As a result, with strong projections for 2016 this is a fantastic destination to invest.