PRIME CENTRAL LONDON

Transcription

1 PRIME CENTRAL LONDON VILLAGES IN A GLOBAL CITY

2 PRIME CENTRAL LONDON VILLAGES IN A GLOBAL CITY London is a city of villages each with its own particular character, heritage and lifestyle. This diversity is reflected in property markets too. Average prices, price growth and investment yields vary from area to area. There is no substitute for detailed local knowledge. In this research, we delve into a decade of property price statistics to explore what drives these differences in performance across prime central London. 10 YEAR PRICE PERFORMANCE Across prime central London markets, average prices have grown by 86% over the last decade. The top performers in this elite ranking were St James s with 170% price growth, Fitzrovia (+147%) and (+124%). Hot on their heels is Marylebone with a 119% rise. In St James s, per sq ft prices have risen from 955 (2006/7) to 2,582 (2016/17), significantly outperforming the average. There are many reasons for the trends in the price data. Swings in sentiment and timing of market cycles vary slightly between London prime villages and so the analysis period can favour one sub market over another. Size is also a factor, St James s is a particularly concentrated market with only 24 sales in 2016/2017, compared to larger markets such as Chelsea (496 sales in the same period) which cover a greater area and where performance can vary from street to street. The title of London s most expensive market is a close call between St James s, Knightsbridge, and Belgravia. Ranking by maximum price paid, puts Knightsbridge streets ahead. The rise of St James s as a contender is partly due to a 500m investment by the Crown Estate, which includes public realm improvements. Marylebone, also showing strong performance over the last 10 years, has similarly benefited from investment and renewal, this being a critical factor in price performance. TOP FIVE: PRIME CENTRAL LONDON S VILLAGES NOW VERSUS THEN TEN YEARS AGO NOW DECADE OF PRICE GROWTH % change 2016/2017 from 2006/2007 AVERAGE PRICES THEN per sq ft price 2006/2007 AVERAGE PRICES NOW per sq ft price 2016/2017 MAXIMUM PRICING NOW per sq ft 2016/ St James s 170% Knightsbridge 1,146 St James s 2,582 Knightsbridge 6,344 2 Fitzrovia 147% 1,062 2,383 Belgravia 5, % Belgravia 1,019 Knightsbridge 2,270 South Kensington 5,685 4 Marylebone 119% Chelsea 974 South Kensington 1,776 5,292 5 Buckingham Gate/ Westminster 106% South Kensington 965 Belgravia 1,762 St James s 4,853 Source: dataloft, LonRes, note data is for re-sales only (does not include new build prices) 1

3 EXPLORING PERFORMANCE PATTERNS PRIME CENTRAL LONDON NEIGHBOURHOODS Average prices across prime central London vary from a high of 4.6 million in through to 1.1 million in Pimlico. INVESTOR FOCUS For those more focused on investment credentials, yields tend to be higher in the comparatively lower value markets. Gross income yields are 2.5% or above in Victoria, Soho and Pimlico. AVERAGE FIGURES 2016/2017 SALE PRICE > 4M 3M 4M 2M 3M < 2M PRICE GROWTH 10 YEAR WEEKLY RENT YIELD Source: dataloft, LonRes data 2

4 DELVING DEEPER Having shown how performance varies, we ask, what makes one place more successful than another and which characteristics do these locations tend to have in common? Drilling down closer to street level, with price analysis covering over 80 postcode sectors, produces some interesting insights. At this geography, the top ten postcode sectors all had price growth of over 130% in the last decade. The winners league is dominated by the core areas of St James s, Knightsbridge and but new contenders appear such as Fitzrovia and Marylebone. TOP PERFORMING POCKETS: % PRICE GROWTH 10 YEAR 190% SW1Y 6 ST JAMES S around Jermyn Street & St James s Square 183% SW1X 7 KNIGHTSBRIDGE Grosvenor Place & Hyde Park south side 167% W1W 6 FITZROVIA around Titchfield Street 166% W1U 5 MARYLEBONE High Street (north end) & Chiltern Street (north end) 152% W1G 9 MARYLEBONE south end around Wimpole Street/Harley Street 146% W1K 2 MAYFAIR Mount Street/North Audley Street 143% W1W 5 FITZROVIA around Great Portland Street 142% W1H 6 MARYLEBONE Portman Square 139% W1J 5 MAYFAIR around Chesterfield Hill & Hay s Mews 132% SW1E 6 BUCKINGHAM GATE 86% PRIME CENTRAL LONDON AVERAGE COMMON CHARACTERISTICS OF WINNING PLACES Spatial analysis helps identify factors that contribute to outperformance over the last decade. Areas with strongest price growth tend to have common characteristics. CHARACTERISTIC Associated with postcode outperformance Measure Outperforming postcodes Underperforming postcodes New homes New developments often set price records but oversupply can hold back price growth Maximum % of PCL new builds 10% 15% Interesting buildings More historic buildings in outperforming areas Listed buildings per hectare 3 1 Historic parks Outperforming areas typically closer to historic parks Proximity to historic parks and gardens 17% 13% Green space Outperforming areas have a higher proportion of green space per hectare % green space 14% 11% Transport access Good transport access associated with outperformance % properties with highest PTAL score* 69% 30% Population density Lower levels of density for higher performing areas People per hectare Source: dataloft * Public Transport Accessibility Level 3

5 THE ROLE OF PLACEMAKING IN PRICE PERFORMANCE Developers today focus on placemaking to create value and this research provides evidence to support that. The list of features shows how these traditional London villages had already found the recipe for placemaking. Many of the factors which tend to drive property prices: heritage, parks, character, have been part of the London landscape since time immemorial and give developers a clear list of attributes and common success factors to try to replicate. NEW DEVELOPMENTS SET NEW PRICE HIGHS While heritage stock has proven appeal, it is typically new buildings that set price records in these high value areas. Developments often define new standards for luxury and amenities, including flagship retail, leisure or restaurants. The Clarges development in (W1J) which reportedly reached 7,000 per sq ft for the penthouse in 2014 some 200% over the prevailing average per sq ft price in that area. Think also of the impact of One Hyde Park on the Knightsbridge market or The Chilterns for Marylebone. Tastes change and the wish list for London s elite is a moving target. PLACEMAKING COMMON FACTOR AMONG TOP POSTCODES Many of the top ranked areas have seen significant investment and careful curation by landowners. London s great estates for instance, help improvements happen on a grand scale. Grosvenor s reinvention of Mount Street has reaped dividends for residential prices in close proximity as have the ongoing changes on the Howard de Walden Estate in Marylebone. LINK BETWEEN OUTPERFORMANCE AND PLACEMAKING TOP RANKED POSTCODE SECTORS ST JAMES S SW1Y 6: around Jermyn Street and St James s Square KNIGHTSBRIDGE SW1X 7: Grosvenor Place & Hyde Park south side NOTES Crown Estate, which owns nearly 50% of the buildings in St James s, is investing 500 million into the area over ten years on a number of projects, including building on the area s residential character and improving the public realm. Completion of One Hyde Park was a prestigious milestone for the market which included a new retail offering (2010). MARYLEBONE W1U 5: northern parts around High Street & Chiltern Street W1G 9: southern parts around Wimpole & Harley Street Investment by the Howard de Walden Estate beginning in the 1990s, plus the recent completion of The Chilterns and opening of the Chiltern Firehouse. MAYFAIR W1K 2: Mount Street/ North Audley Street Major landowner, Grosvenor, have carefully curated improvements to Mount Street including the relaunch of the iconic seafood restaurant Scott s (2007), refurbishment of the Connaught hotel and new flagship retail. Source: various Disclaimer: This report is produced for general information only. While every effort has been made to ensure the accuracy of this publication, Dataloft Ltd accepts no liability for any loss or damage of any nature arising from its use. At all times the content remains the property of Dataloft Ltd under copyright, and reproduction of all or part of it in any form is prohibited without written permission from Dataloft Ltd. Date of publication: March 2018

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