Prime central London development market is booming, say agents
08-08-2012
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The Olympic Games have not dampened the lettings market as enquiry levels were up pre-games and there have been bidding wars on some family homes, says the latest monthly report from agents W A Ellis.
‘While the Olympics has compounded the seasonal reduction in sales transactions, the development market is booming in Prime central London. Numerous prime development schemes are currently under construction, with significant stock due to hit the market over the next few years. This is a real change that could redress the supply/demand issue for top end residential property,’ said Oliver Gibson, director of development and investment at W A Ellis.
Regarding projects of 10 units or more, during 2010 in Kensington and Chelsea, construction completions totalled a mere 12 units, with 704 new applications. In 2011 completions rose to 50, with 1,737 new applications, the Borough's highest application pipeline for more than a decade.
There are also numerous exclusive schemes in the pipeline, says Gibson. For example, Native Land and Grosvenor’s 69 luxury properties at Holland Park School and Lancer's De Vere Gardens with 54 private units due for launch in late 2013. He added that although final pricing is yet to be set at each scheme, it is likely that they will be asking in excess of £2,500 per square foot.
‘If we assume a cautious construction timetable for the next three years, taking the schemes already mentioned into account, a plethora of supply is due to come to the market. At one scheme alone, Henry Moore Court, in Manresa Road, Carlyle Group will be providing 17 units priced in excess of £5 million, with three already sold off plan and due for completion in the next nine months,’ added Gibson.
In the pipeline in Westminster is Chelsea Barracks with 325 private units and some 237 private units being constructed by Exemplar, Aviva and Kaupthing at Fitzroy Place, the former Middlesex Hospital.
Lucy Morton, senior partner and head of lettings at W A Ellis, said that despite the talk of the Olympics dampening the market, enquiry levels prior to the start of the Games were up on this time last year. ‘We believe that the increase was because people were rushing to secure lettings before the opening ceremony. Some savvy tenants are now looking to secure a property whilst the Olympics are on, believing that there is less competition in the market place,’ she said.
‘This may be true in some cases, but not in the family homes market. We have seen bidding wars due to the ongoing shortage of good family homes to rent. A five bedroom property in Knightsbridge attracted competitive bidding from three parties in its first day of coming on to the market and has been let close to its asking price of £2,950 per week. We also saw competitive bidding on a two bedroom flat in Cadogan Square, as well as on a four bedroom flat in Pont Street,’ explained Morton.
‘The relocation agents are still keeping busy with their enquiries at the mid to upper levels of the market, whilst the majority of internet enquiries are for one and two bedroom apartments as students start to dominate the summer season. August is traditionally a busy month for lettings as students and families secure their properties for the start of the academic year. We strongly believe that the last two weeks, post Games, will be exceptionally busy,’ she added.
