Soho a Local Market Review Soho Snapshot Location
Total Page:16
File Type:pdf, Size:1020Kb
Soho A local market review Soho snapshot Location Synonymous with London’s Situated in the heart of the West End, many In addition, traffic congestion in the area is thriving theatre district, bustling of London’s tourist attractions like The set to ease with the removal of the one-way British Museum, Somerset House and the traffic system that has historically hindered Soho is situated in central National Gallery, together with restaurants the area. These overall improvements in London within the prestigious like The Ivy and Hakkasan are within walking connectivity have already seen the area start borough of Westminster. Home to distance of Soho. In addition, the area is to attract high profile office occupiers like well served by a network of buses and Google, which has taken up space at Central some of the world’s most famous underground stations including: Leicester St Giles and Facebook, which is now located restaurants, bars and private Square, Covent Garden, Holborn, Charing on Rathbone Square. members’ clubs it has come a long Cross, Piccadilly Circus, Oxford Circus way since its days as a less and Tottenham Court Road. It is estimated that the addition of Crossrail will significantly reduce travel times for salubrious area. In recent years Tottenham Court Road station is currently commuters, from Soho to Canary Wharf to its residential market has undergoing a £1bn facelift, both below and 12 minutes, Soho to Stratford to 13 minutes flourished, attracting significant above ground. This is the most significant and Soho to Heathrow to under 30 minutes. transport investment in the West End for interest from discerning buyers decades, and is required to accommodate looking for the external charm of the extra 70 million people that Crossrail period buildings, combined with will welcome to the area per year. In fact, our research suggests that the substantial the high specification interiors increase in connectivity will increase found in new build apartments. residential values in the area by 2.9% per This surge in popularity has annum, over and above the average house price growth in London, in the period prior resulted in average property to its opening. prices in Soho increasing by 84% since 2010. BFI Dominion Jo Malone Theatre The Sanderson Saatchi & Saatchi Facebook Charlotte Linkedin Street Tottenham Hotel Court Road Oxford Circus 20th Century Fox Google Prince Cambridge Edward Theatre SOHO Theatre Arbutus* L’atelier Liberty De Joel Robuchon* Soho Yauatcha* House Hotel The The Ivy Groucho Apple Retailers Club Members clubs Leicester Square Restaurants The Hotels Garrick Louis Vuitton Club Theatres W Hotel Offices Fortnum & Mason Piccadilly Circus *Michelin star Local demographics and Tenure profile economic trends 100% The population of Westminster is currently These people are defined as the most estimated at 239,294, having increased by wealthy and influential people in Britain, 90% 28% 27% 32% from 181,286 in 2001. This is expected often in positions of power in the private to reach 258,774 in 2021, a further increase and public sectors; whether as owners 80% of 8%. As a result of this population growth, of their own businesses, as bankers in 70% the number of households in Westminster the city, as senior managers in industry increased by 21% between 2001 and 2011 to or as top lawyers, surgeons or civil 60% 110,000, and this is expected to increase by servants as well as a small but influential 41% a further 20% by 2021, bringing the total group of celebrities in sport, the arts 50% 57% number to 132,000. This represents growth and entertainment. of approximately 2,200 households per year. 40% More specifically, there are currently Proportion of households 30% However, despite this marked demand, since 3,054 people resident in Soho. Although 2009 only 3,259 new homes have been built this has doubled from 1,412 since 2001, 20% across the borough resulting in a significant it still only reflects 1.4% of the entire 32% shortfall of housing. As a result, and typical population of Westminster. 10% 14% of London overall, demand for homes is hugely outweighing supply and this is The transformation of Soho from a leisure Soho Westminster fuelling price growth. destination to up-market residential area over the last few years has seen an influx This strong demand is reflected in of both young entrepreneurs looking Social rented the fact that, across Westminster, for a central London apartment, and Private rented empty nesters looking to down size to Owner occupied 63% of units currently being built a pied-à-terre. have already been sold off plan. Soho has a proportionately strong private Westminster is an affluent borough, with rental sector, making up 57% of all average earnings of £74,550 in comparison residents in comparison with 41% across with the London average of £43,519. It Westminster as a whole. has a high proportion, 10.3% in comparison with the national average of 3.5%, of residents defined as: ‘Alpha Territory’. Housing market trends In the post-recession recovery period This brings average property prices in In fact, 30 such schemes began construction London’s housing market has performed Westminster to £989,700 and those in in the wider borough in 2015. strongly, outperforming the wider UK market London to £503,430, equating to by a significant margin. Prices across Westminster wielding a premium of Traditionally, much of the stock in Soho the city are now 43% above their previous 98% over the capital as a whole. has consisted of office to residential peak. Price growth over the last year conversions, with 52% of stock over the now sits at 12%. Looking more specifically at Soho, average past five years falling into this category. property prices currently sit at £1,554,054 – However, recently the local authority has Activity in the new build market remains 57% higher than the Westminster average. placed limitations upon new applications extremely strong and demand is high, Comparatively, those in nearby Covent and now an impending shortage looms. with 67% of the 51,448 new build homes Garden come in at £1,323,254 while When coupled with the increase in under construction already sold. This is averages in prime central London sit at demand and new buyers that the area has the highest absorption rate of new build £1,631,551. seen in recent years, this supply/demand stock in recent years. imbalance can only boost Soho property In terms of growth, prices in Soho have prices further, taking them well into prime In addition, the government has recently increased by 84% from £843,664 since 2010. central London territory. announced more favourable terms for the This is a significant outperformance over Help to Buy scheme in London. To reflect the London as a whole. Prices grew by 33% on higher prices, first time buyers in London average, over the same timeframe, as well as Increase in Soho prices since 2010 will have access to a 40% help to buy loan those recorded for prime central London (compared with 20% currently). This loan is where growth over the same period was interest free for five years and offered on 65%. However, nearby Covent Garden, new build properties up to £600,000. This arguably an area a step ahead of Soho in 84% incentive is likely to stimulate the market by its residential revival, performed even encouraging first time buyers. This increase better – growing by 97% since 2010. This in demand should have the roll-on effect of is understandable given that it is further Soho stock over the last five years that were further boosting the development market. ahead on this path, but we expect Soho to office to residential conversions follow in Covent Garden’s footsteps over House price growth across Westminster the coming years. has been extremely strong over the past few years, rebounding almost immediately Much of the stock within Soho consists 52% following the Global Financial Crisis and of office to residential conversions. These consistently outperforming wider London. combine the preserved aesthetic charm In fact, since its deepest trough in 2009, of historic exteriors with the high specification prices in Westminster have increased 88% interiors found in modern new builds. while those of London have increased 73%. London’s new build market 80% 70,000 70% 60,000 60% 50,000 50% 40,000 40% 30,000 30% 20,000 20% Private units under construction 10,000 10% 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 average 2001–2006 Sold Unsold Proportion Sold (RHS) House Price Growth forecast 2016 2017 2018 2019 UK 3% 3% 4% 5% London 5% 3% 5% 6% Price comparison Average house price index 215 £1,800,000 195 £1,400,000 175 £1,000,000 155 115 £600,000 Average apartment price Average 95 £200,000 Average house price index (Base = Jan 2007) Average 75 2007 2008 2009 2010 2011 2012 2013 2014 2015 Soho London Westminster Prime Cental Westminster London Base Covent Garden Greater London Contacts Jennet Siebrits Mark Collins Head of Residential Research Chairman of Residential +44 20 7182 2066 +44 20 7182 2264 [email protected] [email protected] Jamie Gunning Shaun Macnamara Senior Director Residential Development Head of West End Sales Sales & Consultancy +44 20 7420 3087 +44 20 7182 2005 [email protected] [email protected] Sources CBRE, Land Registry, Molior, Rightmove Disclaimer 2015 CBRE CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them.