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Home , Clerkenwell tube station, Exmouth Market, Farringdon station, Finsbury, Hatton Garden

RESIDENTIAL RESEARCH

FOCUS ON: PARSONS GREEN 2016

LONDON MIDCITY , , FARRINGDON, BARBICAN 2018

CONNECTIVITY DEVELOPMENT PIPELINE FORECASTS FIGURE 1 FOCUS ON: MIDCITY Midcity, the central residential location sitting between the West End, the City of , the South Bank and Kings Cross, is now becoming a focal point for development.

Significant improvements to local outer London, the home counties, the City infrastructure, not least the opening of of London, and three of 34% the Elizabeth Line, which will augment London’s five airports. Farringdon’s credentials as one of the best The new links add to more than a decade Average outperformance of property connected areas in London, have been of continuous improvement to transport prices within a ten minute walk of the catalyst for developers beginning new since the Elizabeth infrastructure in Midcity, which began in projects. The eight largest schemes under Line was approved in 2008. 2007 with the opening of the construction or in the pipeline will deliver terminus at St Pancras International that more than 2,000 private units over the next ferries passengers to Paris and Brussels. three to five years (Figure 4). The choice of destinations has since been These new developments will bring more expanded, and passengers can now catch residents to an area which, due to its central direct trains from the terminus to locations FIGURE 2 location, has always been economically Housing delivery in Camden, including Avignon and Amsterdam. diverse. The residential community includes , and City For journeys further afield, London City, of London homeowners and renters working in the Heathrow, Gatwick and Luton airports can nearby technology, media, legal and all be reached within 45 minutes on the train financial hubs as well as students from three or underground from Farringdon station. of the UK’s top ten-ranked universities. Local transport infrastructure also includes 2,580 Connectivity nine tube stations (see Figure 6), though Mean net addition dwellings Midcity is one of a handful of locations in Midcity’s central location means that delivered annually 2012-2017 London where regeneration and transport workers, shoppers or those seeking upgrades have created new demand and entertainment in the West End can walk to underpinned residential market performance their destination (Figure 8). in recent years. The Elizabeth Line, also 5,766 known as , opens in late-2018, Prices and supply making Farringdon, at the heart of Midcity, Average residential property values in Housing need per annum one of the busiest train stations in the UK. Midcity have broadly followed the trend Source: Knight Frank Research The upgraded station will link Midcity with of prime , while outperforming

FIGURE 3 Connectivity: London and beyond

TRAVEL TIMES ST PANCRAS TO FARRINGDON TO* PARIS BRUSSELS AMSTERDAM AVIGNON AIME LA HEATHROW BOND LIVERPOOL CANARY PLAGNE STREET STREET WHARF

2 HRS 2 HRS 4 HRS 5 HRS 8 HRS 39 4 2 8 16 MINS 1 MIN 38 MINS 39 MINS 1 MIN MINS MINS MINS MINS

EUROSTAR EUROSTAR EUROSTAR EUROSTAR EUROSTAR ELIZABETH LINE ELIZABETH LINE ELIZABETH LINE ELIZABETH LINE *from late 2018/2019

Source: Eurostar, TFL

2 Please refer to the important notice at the end of this report LONDON MIDCITY 2018 RESIDENTIAL RESEARCH

in the past three years, with average resale FIGURE 4 prices climbing 121% since 2007 (Figure 5). TECHNOLOGY MEDIA FINANCIAL LEGAL MIDCITY Even so, average values in much of Midcity CHANGING MIDCITY TELECOMMUNICATIONS DISTRICT DISTRICT DISTRICT BOUNDARY remain lower when compared to some neighbouring prime central London locations. RESIDENTIAL DEVELOPMENT PIPELINE Size of dots relative to number of units Despite the rise in development activity, Developments of more than 75 private units in progress. data suggests Midcity may remain undersupplied when it comes to housing. LINCOLN SQUARE 1 221 Midcity spans sections of the four boroughs (NEW COURT) UNITS 8 of Islington, Camden, Westminster and the 226 5 . Housing delivery is failing 2 BARTS SQUARE 10 UNITS to keep up with official estimated need in 7 all four boroughs (Figure 2). Taken together, 3 THE DENIZEN 99 UNITS 3,231 additional dwellings were delivered 6 during 2016-17, while estimated annual 4 POSTMARK 515 5 need is 5,766. UNITS 9 Commercial Hubs 5 250 616 UNITS Factors underpinning residential demand FORMER ST MATTHEW'S 100 6 have also supported office and retail activity, 6 and Midcity spans three commercial districts, HOSPITAL UNITS 4 each with their own distinct character. 7 CANALETTO 190 UNITS The northern section of Midcity is particularly KINGS CROSS QUARTER 98 popular among businesses from the 8 (GRIMALDI SQUARE) UNITS technology, media and telecommunications sectors, who have sought out alternatives 8 3 to more established office locations due to a variety of factors, including the relative SELECTED BUSINESSES THAT HAVE value and varying styles of architecture. TAKEN NEW OFFICE SPACE IN MIDCITY Recent tenancy agreements have been SINCE 2015 signed by companies differing in size, from growing start-ups like Monzo Bank to global 1 DEUTSCHE BANK AG technology firms like Google, which is 4 1 2 developing a £1 billion campus on Midcity’s 7 northern fringe in King’s Cross (Figure 4). 2 DELOITTE LLP 3 Midcity is also a hotspot for coworking, 3 DLA PIPER UK LLP and serviced office provider WeWork has 2 leased six locations in Midcity totalling more 1 than 500,000 square feet since 2015. 4 ITV PLC The southern quarter of Midcity is home to 5 EXPEDIA London’s legal industry, with the Royal Courts of Justice at the centre, surrounded by the – the associations for barristers 6 WEWORK that have been present in the area since 1320. The legal district, which contains many 7 CLEARY GOTTLIEB STEEN & HAMILTON LLP barristers’ chambers and solicitors’ offices, stretches from Lincoln’s Inn Fields, the largest 8 MOONPIG.COM public square in London, through to Temple on the north bank of the River Thames.

9 MONZO BANK Heading east, the legal community begins to give way to financial services firms on the 10 ETSY Eastern fringe of the City of London, where Source: Knight Frank Research/Molior Goldman Sachs is establishing its new European headquarters.

3 4 LONDON MIDCITY 2018 RESIDENTIAL RESEARCH

Demand for housing comes from performing arts centre for music, theatre FIGURE 5 a variety of sources that includes and dance. Midcity resale prices have international students. One New Change, a shopping centre, outperformed (Indexed 100 = 2006) with a roof terrace overlooking St Paul’s 250 Education Midcity Cathedral, sits on the eastern fringe of Prime Central London Kings College London, London School 225 Midcity, while Kings Cross is a brand new of Economics and Political Science and retail destination on the northern fringe. University College London are all in 200 Midcity or on its fringe. They are rated Amenities are likely to continue to 7th, 5th and 4th respectively in the 175 proliferate as local infrastructure Times Higher Education UK rankings. continues to improve, bringing increasing 150 The London School of Economics numbers of visitors to the area. The and Political Science has the highest commencement of Elizabeth Line 125 proportion of international students in services at Farringdon station, which is the UK, at 70%. 100 itself surrounded by London’s primary shopping and business districts, is 75 Amenity

likely to underpin demand for further 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Midcity’s central location means development over the coming decade. Source: Land Registry/ Knight Frank Research amenities are within easy reach. Oxford Street, with approximately 300 shops and restaurants, is around a 20 Prime Central London Average values for homes within ten-minute minute walk from tube prices in context walk of Farringdon station, for example, station (Figure 8), or ten minutes on the have outperformed the wider Prime Central underground. Once the Elizabeth Line Average prices in prime central London London market by 34% since Crossrail was opens, a trip from Farringdon to Bond are 9% below their peak in 2015, amid granted royal assent in 2008. Street will take four minutes. pricing adjustments to new stamp duty Prices in prime central London East are rules introduced in 2014 and 2016. Within Midcity itself, , projected to climb by 0.5% during 2018, However, values are still 22% above the with cumulative growth of 13.1% by with 32 stalls and an array of bars and previous peak of the market in 2008. 2022, according to Knight Frank’s latest restaurants occupies the district, while There are also pockets of outperformance. forecasts. to the east sits the , a

FIGURE 6 upgrades planned and in progress

M ill Hill ! New !! Stanstead !! Angel Road Broadway ! Southgate Airport Barnet HS2 Proposed (2026 – subject to approval) Haringey !! Alexandra !! Turnpike Crossrail 1 (Central – late 2018, Outer – 2019) Harrow Palace !! Lane Hale (2030 – subject to approval) !! Redbridge ! Chadwell Crossrail 2 Proposals ! !! Seven Heath Extension (2020) Sisters Waltham Forest !! ! !! Existing !! ! Park Islington !! Bakerloo Line Proposed (2030 – subject to approval) Hackney !! !! (£7bn upgrades complete 2019) Camden ! !! Brent !! ! ! !! ! Junction !! Angel Stratford Barking Euston Old Oak St. Pancras Common !! !! Tower !! Hamlets Newham ! Tottenham ! Court Road ! !! ! ! London City West ! !! ! !! !! ! !! !! !! Airport Drayton !! !! Acton !! London !! o !! !! ! West M ainline !! Bridge !! !! ! Ealing Victoria !! Langley !! !!!! Elephant Castle !! ! !! Kings Road ! ! ! ! ! Kennington !! ! ! ! Abbey Chelsea ! !! !! ! Charlton Wood !! !! ! !! !! ! Nine ! Gate Heathrow !! ! Heathrow Elms !! !! ! !! Terminals 2 3 !! Terminal 5 ! !! !! Bexley Heathrow Junction !! !! !! Terminal 4 !! Lewisham Tulse !! Richmond Hill !! !! Upon Thames !! !! Broadway !! ! !! !! !! W imbledon !! ! Sunbury !! !! ! !!! !! ! !! ! !! !! ! ! !! !! ! ! !! !! Merton !! !! !! Kingston ! Hampton !! !! !! ! !! !! !! !! !! Court !! Motspur !! !! ! Park !! atwick Elmers !! !! ! !! Airport Shepperton !! ! End !! ! !! Worcester !! Hayes Park !! Bromley ! !mes! !! !! ! ! !! Source: Knight Frank Research

Kingston Upon Tha 5 FIGURE 7 “THE OPENING OF THE Prime central London East, price forecasts* ELIZABETH LINE WILL ENHANCE FARRINGDON’S POSITION AS A KEY TRANSPORT HUB IN CENTRAL LONDON. GIVEN THAT FARRINGDON IS ALSO 05% 15% 25% 30% 50% 131% SURROUNDED BY LONDON’S 2018 201 2020 2021 2022 2018 2022 BUSINESS AND SHOPPING * Price forecasts are for existing homes as of May 2018. Property values in the new-build market may perform differently. Source: Knight Frank Research DISTRICTS, IT’S APPEAL IS

FIGURE 8 ONLY SET TO INCREASE.” Walk Times Twenty minute walk-times from selected stations in Midcity

Patrick Gower, Residential Research [email protected]

If you would like further insight into residential markets please get in touch.

Source: Knight Frank Research

RECENT MARKET-LEADING RESEARCH PUBLICATIONS Knight Frank Research provides strategic advice, consultancy services and forecasting

RESIDENTIAL RESEARCH RESIDENTIAL RESEARCH PRIME LONDON RESIDENTIAL RESEARCH SALES INDEX to a wide range of clients worldwide including

The global perspective on prime property and investment LONDON CROSSRAIL developers, investors, funding organisations, ANALYSING PROPERTY MARKET PERFORMANCE DEVELOPMENT ALONG THE ELIZABETH LINE 2017

The prime London sales indices are based on repeat valuations of second-hand stock and do not HOTSPOTS JULY 2018 include new-build property, although units from completed developments are included over time. RESIDENTIAL DEVELOPMENT corporate institutions and the public sector. PRIME CENTRAL LONDON OPPORTUNITY AREAS 2018

Prime central London index | 5,884.2 Annual change | -1.9% Quarterly change | -0.8% Monthly change | -0.2% THE WEALTH REPORT 2018

Figure 1 The number of new prospective FIGURE 1 FIGURE 2 New prospective buyers rise in June High-value deals hit three-and-a-half year high All our clients recognise the need for expert buyers in prime central London was 31% Year-on-year % change Monthly value of £10 million-plus deals in London higher in June than the same month

last year. Despite a period of political 35% £500m uncertainty, the upwards trend highlights 30% the strength of underlying demand as asking 25% £400m 20% prices rebase. 15% £300m 10% 5% Figure 2 The total value of £10 million- £200m 0% plus sales in June 2018 was £407 million, -5% independent advice customised to their the highest monthly total since December -10% £100m 2014. It highlights the strength of underlying -15% -20% £0 demand for prime central London property despite a period marked by political Jul-17 Apr-16 Apr-17 Apr-18 Oct-16 Oct-17 Jun-18 Jun-16 Jun-17 Apr-18 Feb-16 Feb-17 Feb-18 Aug-16 Dec-16 Aug-17 Dec-17 Jan-18 Oct-17 Jun-17 Jun-18 Mar-18 Feb-18 Dec-17 Aug-17 Sep-17 Nov-17 uncertainty. May-18 Source: Knight Frank Research Source: Knight Frank Research / LonRes / Land Registry PRIME OUTER LONDON specific needs. Prime outer London index | 277.8 Annual change | -4.0% Quarterly change | -1.2% Monthly change | -0.5%

Figure 3 The number of properties FIGURE 3 FIGURE 4 Downwards trend for withdrawn properties Viewings per office on the rise withdrawn from sale declined 31% year-on- Rebased to 100 at June 2017, rolling quarterly Rebased to 100 at January 2017 year in June. Properties are often withdrawn average because buyers will not meet the asking 150 price. The trend suggests asking prices 100

now more fully reflect buyer expectations as 80 120 higher rates of stamp duty are priced in. 60 90 Index Figure 4 The number of viewings per office Index 40 60 in prime outer London was 18% higher in June than the same month last year. This 20 30 2018 reflects the resilience of underlying demand and also the fact that price-sensitive buyers 0 0 12th Edition are carrying out more viewings before Jul-17 Jul-17 Apr-18 Apr-17 Apr-18 Jan-18 Oct-17 Jan-17 Jan-18 Oct-17 Jun-17 Jun-17 Jun-18 Mar-18 Mar-17 Mar-18 Feb-18 Feb-17 Feb-18 Dec-17 Aug-17 Sep-17 Dec-17 Aug-17 Sep-17 Nov-17

HOW HAVE PRICES Nov-17 May-18 May-17 LOOKING TO THE FUTURE: DEVELOPMENT making an offer. May-18 PERFORMED? CROSSRAIL 2 PIPELINE Source: Knight Frank Research Source: Knight Frank Research AREAS TO WATCH PRICE FORECASTS MARKET UPDATE The Wealth Report Crossrail - 2017 Prime London Sales London Development - 2018 Index - July 2018 Hotspots 2018 Get in touch If you’re thinking of buying or selling, Knight Frank Research Reports are available at KnightFrank.com/Research or would just like some property advice, please do get in touch. Important Notice © Knight Frank LLP 2018 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in Edward Robinson this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not +44 20 7718 5211 necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report [email protected] in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content 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, W1U 8AN, where you may look at a list of members’ names.