In December, London’s state-of-the-art £14.8 billion (US$20.7 million) railway, Crossrail, will open, and it’s already providing a much needed feel-good boost to the city’s fortunes.
Since Brexit, things have been uncharacteristically wobbly in London’s prime real estate market, which previously seemed to be one endless boom. A price fall of 0.7% was recorded last year in the prime London market, and the previous year, the fall was 6.6% according to real estate agent Knight Frank’s prime central London index. The falls were driven by the increased burden of property taxes, as well as concerns about the future of the City—London’s financial powerhouse—and a devaluing of the pound after the Brexit vote.
But Crossrail, which will be renamed The Elizabeth Line on its opening after the queen and colored a regal purple, seems to be helping to cancel out those worries, and is sprinkling royal stardust on the areas it’s passing through.
The first section of Crossrail to open will create a new direct route all the way from Heathrow Airport in the west, to the financial center Canary Wharf in the east. Unlike some of the older Underground trains, all Crossrail trains will be air conditioned, with real-time passenger info as well as Wi-Fi in tunnels. From December 2019, the full line will be in operation, linking Berkshire and Heathrow in the west, to east London and Essex in the east. It will increase rail capacity in central London by 10%, and an extra 1.5 million people will be within commuting distance of London’s key employment districts.
In a 2017 report on the effect of Crossrail, Knight Frank found a 7% outperformance of markets within a 10-15 minute walk of the train’s stations compared to the wider market in the same borough, and a whopping 40% outperformance of areas within 10 minutes walk of prime central London stations.
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"Prime central London areas were the biggest performers," Gráinne Gilmore, head of U.K. Residential Research at Knight Frank told Mansion Global. "For buyers in these areas it’s a massive step up in transport infrastructure —yes the tube (the London Underground) is great, but Crossrail is ultra fast and modern, and journey times from central London to Heathrow and the City have been significantly reduced. London is attractive to buyers from around the world as many of their children are at university here, and for tenants, our surveys show that being near to transport is their most important priority."
"There’s also ‘place-making’ going on around these new stations, with exciting new mixed-use developments of residential, retail, entertainment and amenities, to take advantage of passing trade," Ms. Gilmore said.
As online shoppers put pressure on traditional bricks and mortar retailers, these new spaces are innovating with a mix of high quality shops, entertainment and leisure.
One such development is the much anticipated refurbishment of the iconic 1960s London skyscraper, Centre Point, into luxury apartments. Centre Point sits at the eastern end of London’s busiest shopping street, Oxford Street, near the new Crossrail Tottenham Court Road station, but that end has long been neglected and had become known for tacky tourist shops, crowded sidewalks and heavy traffic. Now, leading developers Almacantar, working with Rick Mather architects and Conran & Partners, have revamped the building, referencing its 1960s origins with appealing new designs, and creating a brand new pedestrian square alongside the tower with terraces, upscale restaurants and two music venues.
The building and square launch fully in September 2018, but 50% of the apartments, which start from £1.8 million (US$2.5 million) and rising to £55 million (US$77 million), are already sold.
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"Crossrail is a massive pull," said Daniel Ritterband, director of communications for Almacantar. "It’s 28 minutes from Heathrow door to door. It’s four minutes from Mayfair, six minutes from the City. That infrastructure lights the torch paper if you like and inspires developers and others to move in."
"Facebook, Warner Bros, LinkedIn and Twitter have taken office space within three minutes walk from our building, so a new tech hub is forming around us," he continued.
Half of the buyers at Centre Point so far have been British, many of them returning from Asia where they’d been used to living in fully serviced apartments, Mr. Ritterband said, as this fully serviced building with a concierge, pool and gym is rare in central London. The buyers are younger than expected, "one tech guy was just 18," Ritterband said. The other half have come from around the world with Indian, Thai, Canadian and American buyers.
The boom in new residential homes and lifestyle spaces is reflected all the way down the line, with over 10,000 private units for sale or under construction in the central London stretch between Paddington in the west and Canary Wharf in the east Paddington, in the central west area of London, is another area that has remained rundown—cluttered with scruffy bed-and-breakfasts and hotels. But now, as the journey time from Paddington in the west to Liverpool Street in the city will fall from 23 minutes to just 10 minutes with the arrival of Crossrail, developers have seized upon the area and are transforming it with new restaurants, hotels and smart housing.
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Last year, hip hotel The Pilgrm opened, and recently Garden House—a renovated period terrace with a white stucco facade, opened, offering buyers rare direct access to a private garden square. Its one-, two- and three-bedroom luxury apartments are fashioned from the period building, with state-of-the-art extras like remotely operated blinds and integrated speakers. Prices start at £995,000 (US$1.4 million) and 50% of the units have now sold.
It’s a similar story in Farringdon, a fashionable neighborhood that has suffered in the past from a slow tube connection, and Liverpool Street in the east, which has become a destination restaurant hub and tech center with the Amazon London headquarters and mobile-only bank, Starling Bank, arriving soon.
Further to the east, Canary Wharf has a new residential tower by Herzog & de Meuron to add to its cluster of skyscrapers. Expectation is that many more will consider living in the neighborhood once Crossrail arrives.
Outlying areas are benefitting too. Once unfashionable Ealing Broadway, far away in Zone 3 of the London underground map, will see journey time to central London cut to just 11 minutes. The area has a new development, Dickens Yard, comprising 700 residential homes, and brand new shops, restaurants, a gym and a cinema are attracting buyers.
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"The golden postcodes are always attractive, but people are willing to move further away if there are very good new developments on offer," Ms. Gilmore said.
Crossrail stretches out of London to the east and west, and many outlying towns and villages are reaping the rewards. Pretty village Taplow in Buckinghamshire already draws affluent commuters, but online listings company Rightmove found asking prices were up by almost 32% between 2015 and 2016. In the east, Essex towns like Ilford and Harold saw close to 30% rises, and these sorts of rises will be reflected elsewhere when the eastern section of the line opens in 2019.
"Brexit was a concern, but people are powering on," said Daniel Ritterband of Almacantar.