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Canary Wharf
Canary Wharf

Published FT October 2 2009

There is an impressive model on the 30th floor of architect César Pelli’s Canary Wharf Tower, which in 1990 became the first high-rise building on the expanse of former docklands in east London.

It depicts a vast area of central London, all of its streets and buildings lovingly laid out with skyscrapers and spires poking out amid the sea of low-rise structures. There’s the BT Tower, the London Eye and Tower Bridge. The bends of the River Thames snake across the middle, clearly showing the great loop that encircles Canary Wharf and the Isle of Dogs. At the push of a button, train lines light up, demonstrating to potential commercial investors how well connected the area is: the Docklands Light Railway has been extended south to Lewisham and east to City airport and platforms are being lengthened to accommodate extra carriages.

The Jubilee Underground line was brought to the area 10 years ago and weaves through central London west to Stanmore and east to Stratford. But the train line that will have the biggest impact on travel times to and from Canary Wharf is Crossrail, an east-west link. Building work began in the North Dock in May on the route’s first station. Trains are expected to start passing through the £500m, six-storey structure in 2017, disembarking almost double the current 93,000 workers who make the daily commute. The 118km railway, running from Maidenhead, west of London, to Shenfield and Abbey Wood in the east, will bring an extra 1.5m people within a 60-minute journey time of Canary Wharf and cut the travel time to Heathrow to 44 minutes. It will make the area a key transport hub for the whole expansion of London eastwards along the river.

A second model details the 97 acres of estate belonging to the Canary Wharf group. It shows the buildings already created, the outline planning permissions for more buildings and the remaining vacant plots on the eastern edge. Even though the financial landscape has changed, JPMorgan agreed a £237m deal on the Riverside South site in November last year at the height of the credit crunch. Planning permission has also just been granted on Wood Wharf, a mixed-use scheme in conjunction with Ballymore and the British Waterways Board.

This large commercial presence, which is diversifying away from the financial sector to media, accountancy and energy companies and government offices, has had a significant impact on residential property in the area. Many of the new apartment buildings have been aimed primarily at investors hoping to rent to the workforce. Cory Askew, of estate agency Chesterton Humberts, says: “As the area has become more established, there’s been an evolution from around 90 per cent buy to let, or even buy to flip, to around 50 per cent owner occupied.”

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The initial wave of residential building began in the late 1980s, along the river’s edge. Cascades, designed by architectural practice Wilkinson and Gough (now CZWG), was one of the first yuppie developments, completed in 1987. Twenty storeys high with 164 apartments, it cost £19m to build and the first occupants moved in while the seventh floor was still being constructed. The first 86 flats released sold within an hour and the price for a river view, 754 sq ft two-bedroom apartment was £142,000. Today a similar home is for sale for £400,000.

One of the latest projects to be completed is Pan Peninsula, Europe’s tallest residential tower, built by Ballymore. At the luxury end of high-rise living, it has a 35-seat cinema, a spa, a gym, a stainless steel swimming pool and a 50th-floor penthouse cocktail bar with panoramic views.

Most of the flats were sold off plan before the credit crunch. A fall in property values of between 17 and 35 per cent since the 2007 peak has left some buyers nursing painful losses. A lobby group, the Pan Peninsula Buyers Association, was set up to attempt to negotiate on behalf of the buyers but Ballymore is taking a tough line and demanding full completion, although the company says it will listen to the private concerns of individual buyers.

Denesh Bhabuta, of the PPBA, says: “Many of the purchasers work in the financial and legal sectors, where an adverse court judgement could cause disqualification. We are still hoping to be able to sit around the table with Ballymore and discuss solutions.”

Other developments are at various stages of completion. Glenkerrin has planning permission for a Foster and Partners-designed, 430-apartment complex on Marsh Wall and for a lower-rise mixed private and social housing development of larger family units at Island Point. It continues to sell a completed 128-unit development called the Forge, which mixes new build with the conversion of a 19th-century forge.

Also on Marsh Wall, the 276-apartment Landmark West Tower has all been reserved, with the 45-storey East Tower due for completion at the end of 2010. Galliard Homes’s Wharfside Point was recently sold at knock-down prices when 155 of the 167 off-plan buyers failed to complete. Selling its stock at virtually half price, Galliard Homes exchanged with new buyers on all 155 flats in a weekend sale. “There were queues round the block,” says Madeleine Flower of Galliard Homes. “Over the weekend, 1,600 prospective purchasers registered and, interestingly, we noticed that there were a lot of first-time buyers. The ratio of owner occupiers to investors was around 60-40 per cent.”

Askew says: “Expect to pay £200,000-£400,000 for a one-bedroom [property], £300,000-£500,000 for a two-bedroom, £400,000-£600,000 for a three-bedroom, with penthouse flats going for £600,000 plus. Super-prestigious flats can sell for well over £1m and although most of the stock is geared for singles, there are more families moving in or staying in the area. Activity in the market has picked up noticeably in the last couple of months.”

Katherine Goncharov, who recently upgraded to a new apartment with her husband and two daughters, says: “When I first came here six years ago it was a bit boring. Now there are many more children here and there is always something going on for kids.” The apartment, on the bend of the river, has views along the Thames towards the city.

Rosie McGrath, who got married in April, rents but is looking to buy in the area. “When I first moved in I thought it would all be a bit dead but it’s like a mini-Manhattan,” she says. “There’s great retail and it all feels very safe and secure. There are no issues when you’re out walking late at night or running along the Thames path.” In fact, in some ways you could call it a model city.

www.chestertonhumberts.com


Copyright Financial Times 2009

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