RESIDENTIAL RESEARCH

CHELSEA RIVERSIDE LONDON MARKET FOCUS 2015

CONNECTING CHELSEA AND CHANGING DEMAND IN PRIME CROSSRAIL 2 AND THE CENTRAL LONDON CONNECTIVITY LONDON’S NEW PRIME NEIGHBOURHOOD The expansion of the prime London property market is leading to growth opportunities in new areas of the capital. One riverside district, on the fringe of prime central London, is especially well-placed to benefit

Changing demand Strong position Place-making Growing demand for prime property There are several markets on the fringe of Media attention has focussed on the in central London has for a long time prime central London that are not seeing transformation of Nine Elms on the south encouraged buyers to explore new areas, the same growth in demand experienced by bank of the Thames due in part to the in what were once considered to be fringe Chelsea Riverside. The area has a number iconic nature of Power Station locations. One such market that has seen of advantages aiding growth. and the relocation of the American significant activity over the past five years Proximity to established high-end amenities embassy. This focus has meant that the is the 260-acre district located between is key. Figure 3 confirms the wider context scale and impact of the development the King’s Road in Chelsea and the River with Chelsea Riverside neatly located happening on the north bank has, to some Thames. between Chelsea, and other strong extent, been overlooked. This area, referred to as Chelsea Riverside performing markets to the south of the river. The Chelsea Waterfront scheme, for in this report, was until twenty years ago a The area is within walking distance of example, has been described by London largely overlooked former industrial area. the retail and restaurant offer on the Mayor Boris Johnson as the largest Residential demand and price growth has King’s Road, which is also the site of a development opportunity on the north bank been underpinned by the area’s favourable proposed Crossrail 2 station. To the south, of the Thames for over 100 years. position on the north bank of the Thames the Thames provides river views and The wider district includes expanses of and on the edge of prime central London. opportunities for recreation, which will be parkland, waterways and landscaped enhanced following the development of key Its location has meant that this area forms areas. The Chelsea Creek development sites along the river frontage. a natural extension to the prime central includes five acres of open space, including navigable canals, a restored historic dock London market as buyers weigh price, Chelsea Riverside in numbers space and facilities. As a result, price growth and wetland habitats. Meanwhile, 45% of has begun to outperform more centrally 200% – Price growth in Chelsea Imperial Wharf is open space, including located markets. Riverside since 2005 riverside moorings and a quarter-mile long riverside walk. Figure 1 confirms that over the past decade 10 – number of minutes to walk to the price growth in Chelsea Riverside has King’s Road The lifestyle offer from the district is also outperformed Chelsea itself, and even the improving. With a growing number of 375 – length of riverside walk in Chelsea hotels, bars and restaurants joining the wider prime central London market, by Creek development (metres) some margin. interior-design cluster surrounding Lots 15 – number of minutes from High Street Road Auctions and the Chelsea Harbour This growth was enhanced after 2013 when Design Centre. the ripple-effect of price growth began to push out from central London, further south 8.1 – acres of gardens in Chelsea Infrastructure Waterfront development and west into Fulham and . Chelsea Harbour, which was built in the late 1980s, was the first major development FIGURE 1 in the district outlined in figure 2. Its focal Chelsea Riverside outperforms other prime London markets point is The Belvedere’s 200-foot tower, What a £750,000 investment 10 years ago would be worth in 2015 still one of the most iconic riverside developments in London. 2005 2015 There was little further development until Imperial Wharf was completed two decades later. The scheme had a major £750,000 £2.25m £750,000 £1.83m £750,000 £1.8m £750,000£1.76m impact due to developer Berkeley Group’s partial funding of a train station, providing quick access to Kensington and .The station Chelsea Riverside Chelsea Prime central London Kensington is also one stop from , Source: Knight Frank Residential Research one of London’s busiest stations.

2 CHELSEA RIVERSIDE 2015 RESIDENTIAL RESEARCH

FIGURE 2 Key residential schemes

Mayfair

Kensington Hyde Park Palace Chelsea

Harrods Stamford Bridge 3 4

South Kensington 2 5

Lots Rd 1

Lots Rd

The King’s Rd

1 2

3 Imperial Rd 4

Imperial Wharf Rd

William Parnell Park 5

Imperial Park

Peterborough Rd

William South Park Morris Way

Key Chelsea schemes Imperial Wharf also gives access, four stops Road power station. This development will 1 The Glebe north, to Willesden Junction, adjacent to the include 8.1 acres of gardens. proposed interchange between Crossrail 2 Chelsea Delivery Office Lots Road was the world’s largest power and the High Speed 2 link at Old Oak 3 Chelsea Police Station station when completed in 1904 and is the Common, which is likely to become one last of the three historic riverside power 4 Draycott House of the best-connected transport nodes in stations in central London to be developed, 5 Chelsea Barracks London. following Battersea and the conversion of As noted above, there are longer-term plans Bankside into Tate Modern. Key Chelsea Riverside schemes for a Crossrail 2 station on the King’s Road, Other notable developments include 1 Chelsea Waterfront which will further improve connectivity. In Chelsea Creek, which is being developed Status Under Construction addition to an increased river taxi service Private Units 441 by St George, and Chelsea Island, which from , planning Developer Cheung Kong Property Holdings Hadley Property Group is proposing to permission exists for a footbridge across the develop next to the Chelsea Design Centre.

2 Chelsea Island Thames between Battersea and Chelsea

Status Full Permission - Not Started Harbour. Elsewhere, St William, a joint venture Private Units 86 between Berkeley Group and the National Developer Hadley Property Group New developments Grid, plans to develop the gasholder site

3 Imperial Road Gasholders Site off Imperial Road, a significant future As the area’s infrastructure is improving, Status Pre-Planning development because it will link Chelsea Private Units TBC developers are increasing their focus on the Developer St. William area. Figure 2 confirms the key residential Creek, Chelsea Waterfront and Chelsea Island to the King’s Road, closing the gap schemes in the pipeline. 4 Chelsea Creek between Chelsea and the River Thames. Status Under Construction These include Chelsea Waterfront, a mixed- Private Units 700 Strong price growth Developer St. George used development, including residential,

retail and restaurants master-planned by In 2005, new-build prices in Imperial Wharf 5 Imperial Wharf

Status Complete and Sold Sir Terry Farrell. Cheung Kong Property typically ranged between £500 and £600 Private Units 1000+ Holdings is developing the scheme on an per square foot. An equivalent figure today Developer St. George 11.3-acre area around the landmark Lots in Chelsea Creek is between £1,500 and

3 FIGURE 3 Prime surroundings underpin future development Estimated current property prices in central and south-

RESIDENTIAL RESEARCH Tom Bill Head of London Residential Research +44 20 7861 1492 [email protected]

LONDON RESIDENTIAL Rupert Dawes Head of New Homes +44 20 7861 5445 [email protected]

Mark Wilkinson Head of Baker Street New Homes +44 20 7861 5414 [email protected]

Alex Carr Partner, Residential Development +44 20 7861 5444 [email protected]

Source: Knight Frank Residential Research Priya Pannu Partner, Residential Development £1,600 per square foot, a trebling in prices FIGURE 4 +44 20 7861 5489 [email protected] over the last decade. Chelsea and Riverside buyer profile (two years to March 2015) Price growth has outperformed Chelsea, Kensington and the prime central Nationality London average, as figure 1 shows. This demonstrates how the area is moving closer to parity with its neighbours and a gap in the residential map of prime London is closing.

Despite this outperformance, prices per square foot remain lower than those further United Germany east, but on a par with developments taking Kingdom Nigeria Italy Sweden place on the south bank of the river around France Jordan Battersea Power Station. India Canada Russian China Demand in the Chelsea and Riverside areas Federation Australia is underpinned by a broad range of buyers, Spain Japan Knight Frank Residential Research provides with a stronger showing by UK nationals than Lebanon strategic advice, consultancy services and areas in the core of prime London, and with forecasting to a wide range of clients worldwide very strong demand from Italian, Russian and including developers, investors, funding French buyers in particular (figure 4). organisations, corporate institutions and the public sector. All our clients recognise the need Outlook for expert independent advice customised to London’s population is expected to grow by their specific needs. Buyer age Source of wealth more than 100,000 every year for the next decade, a fact that is fuelling demand for 50s 70+ Other property across the city. As Knight Frank’s 40s <20 City/Finance 30s 20s Professional 2015 Wealth Report confirms, London and 60s Property New York will continue to dominate as global Inherited city economies and investment destinations Entrepreneur Entertainment /Sports © Knight Frank LLP 2015 over the next decade. Industry This report is published for general information only and Farming These macro-trends will underpin the not to be relied upon in any way. Although high standards have been used in the preparation of the information, ongoing expansion of prime London. analysis, views and projections presented in this report, The concentration of developments in no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant Chelsea Waterside is likely to ensure that from any use of, reliance on or reference to the contents the transformation of this part of London of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in continues. The boundary between a once relation to particular properties or projects. Reproduction of overlooked area of the city and its prime this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content central London neighbour will fade. within which it appears. Knight Frank LLP is a limited liability partnership registered in with registered number OC305934. Our registered office is 55 Baker Street, London, Knight Frank Research Reports are available at KnightFrank.com/Research W1U 8AN, where you may look at a list of members’ names.