East residential Our Patch, Our View Q3 2016 2–3

CBRE East London Our patch

Heron Quays

CBRE East London South Quay Tower Hamlets Newham Hackney

Redbridge Crossharbour

City of London Barking and Dagenham Overview

Overall, growth in the London market Investors accounted for 82% of sales: an remained robust, albeit with a slight encouraging sign that investor sentiment for moderation in Q3. Nationwide recorded the East London and the wider London annual growth of 7.1%, down from the 9.9% residential market remains positive, despite recorded in Q2. This growth was driven by the additional rate of Stamp Duty. Overseas strong activity in the first quarter of 2016, as investment levels also remained mostly investors clambered to avoid paying an unchanged compared with Q2, indicating additional 3% Stamp Duty on their that international buyer interest has persisted purchases. Since then, activity in Greater through an uncertain few months. London has slowed with sales volumes down 13% overall in the first half of 2016 compared Market distortions aside, the fundamental with the same period last year. drivers of London’s property market are not affected by the decision to leave the EU. In Some four months have now passed since fact, the declining interest rates and the the UK voted to leave the European Union, continued strength of the mortgage market Havering and the industry is closely monitoring its continues to underpin demand, particularly impact. However, the distortionary effect of in the main stream market, which is further the new Stamp Duty rules means that there stimulated by the London help-to-buy will still be some time before we can draw scheme. In addition, the fall in Sterling has any conclusions. generated renewed interest from international buyers. Bexley CBRE East London did experience a slight fall in activity in the third quarter, We hope you enjoy the latest edition of Our as the impact of Stamp Duty and Patch, Our View. If you would like any further post-referendum uncertainty continued to information please do not hesitate to contact feed through the market. In addition, the a member of the team, whose details can be third quarter is typically quieter as people found at the back of this report. enjoy their summer breaks. However, while activity declined, it still remained robust.

Southwark

Lewisham Royal Borough of Greenwich Joseph Selby Senior Director T: +44 (0)20 7519 5913 E: [email protected] 4–5

East London: The metamorphosis of East London has The evolution of the tech industry has backwater into a top residential and leisure As well as a creative migration, new industry further open up East London, bringing been in motion since the 1980s when a brought further workers and residents to East location. Olympic stadiums and arenas have and significant regeneration, East London several other property markets into focus. an overview pioneering population of artists and other London. What began as a cluster of digital been recycled, with West Ham United taking has also been the benefactor of several creatives established themselves in companies surrounding Old Street residence in the redeveloped Olympic infrastructure developments. London City The multifaceted evolution of East London Shoreditch, Hoxton and Clerkenwell. This roundabout has resulted in an explosion of Stadium, and the Copper Box Arena now Airport, opened in 1986, now serves 4.3m has translated into strong growth of its Over the last several decades laid the artistic foundation of these tech companies throughout markets such as home to London Lions Basketball Club. passengers a year, with a current investment residential property market. To August 2016 neighbourhoods, transforming them and Shoreditch and Clerkenwell. The area now Homes at the former Athletes Village, now programme aimed at increasing this to house prices in East London increased by East London has been boosting their appeal – as a result, these hosts more than 10,000 tech companies known as East Village, are also in high 8m by 2030. The extension of the Jubilee 14.1%, compared with 12.1% across wider completely transformed. districts now command some of the highest generating £12.5bn of annual revenue. demand. This development, along with Line in 1999 made areas including Canary London. Over the longer term, prices have house prices in the capital. Amazon will also join the ranks in 2017; its other schemes spread across the Queen Wharf, North Greenwich and Stratford more risen 78% over the last five years, outpacing It is now a highly desirable new UK headquarters next to Street Elizabeth Olympic Park will deliver 11,000 accessible. A further benefit comes with the wider London by a margin of 12%. This place to live and new With the unabated growth in popularity of station will host 5,000 employees. new homes to the area. Westfield Stratford recently introduced 24 hour weekend strong growth is set to continue as the these City Fringe neighbourhoods, the City, one of the largest urban shopping service. The opening of , now titled volume of regeneration increases and the infrastructure and industry migration of artists, creatives and However, as demand for tech space in the centres in Europe, also makes Stratford a the Elizabeth Line, in 2018/19 is going to migration to the east continues. continues to draw people fashionistas has continued east over time to City Fringe has grown, so have rents. As a major retail and leisure location. Building on new, previously overlooked areas. This result, the tech industry along with it its the success of the Olympic Legacy, Here Average house price index to the area. As a result, evolution has brought brands like Burberry workers, has spread further east to more East is based in the heart of the Olympic this region of London is and other high end retailers to Hackney affordable areas. An example of this is Park set to create a new hub for individuals 200 Central, and attracted art institutions such as Fish Island in Hackney Wick – with its major and companies in the arts, education and seeing a significant amount the London Film School and the English concentration of artists and studio spaces, tech industries. As if to cement its evolution, 180 of development, with National Ballet from their historic homes in this canalside community is a hub of earlier this year Stratford was officially West London to Leamouth Peninsula and its creativity and innovation. Set alongside re-zoned on London’s tube map, bringing 160 areas like Stratford and brand new community, London City Island. long-established residential and business it into zone 2, and thereby more closely the London Docks now communities, this has become one of associated with Central London. 140 The next phase of East London’s London’s most exciting new destinations.

putting East London in the transformation came with the completion of Based in East India Dock, Republic is Major regeneration in East London is also (Base = Jan 2007) 120 Canary Wharf in the 1990s. This brought a another new campus for start-up companies underway in Greenwich, with the Greenwich global spotlight. house price index Average new population of financiers to the area, where, at less than £35psf, rents Peninsula development set to deliver 100 many of whom chose to live in the now will be half of those paid in Shoreditch and over 15,700 new homes, 900,000 sq ft of trendy Shoreditch and surrounding areas. the West End. business and retail space, numerous leisure 80 Today Canary Wharf is set to become a top facilities and nearly 50 acres of green space 2011 2014 2012 2013 2015 2016 2010 2007 2008 residential location in its own right. There are The summer Olympics in 2012 placed upon completion. 2009 a total of over 20,000 new homes in the another East London market on the East London London pipeline across the Isle of Dogs, over 3,000 residential map. Since the end of the games, of which are on the Canary Wharf Estate. Stratford has been transformed from derelict 6–7

Sales overview CBRE East London Reason for purchase Q3 2016 Owners Investors Q3 2016 sales snapshot % Percentage

Despite the impact of Brexit 90 and additional Stamp Duty, Average sales value £589,160 82% 70 75% buyer appetite remained Average new build £psf £912 strong in the third quarter. 50

Specifically, investors Average resale £psf £625 30 Number of sales remained highly active; an 25% encouraging sign that they Highest £psf £1,788 10 17% have not been discouraged Q2 2016 Q3 2016 by the additional 3% levy. A successful launch of the final building at Purchaser origin Q3 2016 London City Island, Caledonia House, % Percentage generated a large number of sales this quarter. The Stage in Shoreditch also continued to be a popular development, UK 61 Asia 26 particularly among overseas investors. Other 9 High levels of interest remain at Precision Europe 4 in Greenwich, where UK investors were the main buyer group in Q3. CBRE Research, Q3 2016 Overall, these new-build developments contributed to a total sales volume of nearly 100 for CBRE East London in Q3. The average sale value was £912psf, down Sales forecast 21% from Q2. This largely reflects the sale of lower value units, with 14% of sales over The summer holidays coupled with the £1,250psf in Q3, compared with 40% in Q2. continued impact of Brexit and Stamp Duty In contrast, 57% of sales were between caused a relatively muted third quarter. We £750 and £1,250psf this quarter, compared expect activity to pick up during Q4, as an with 37% in Q2. Overall, the prices for all improvement in confidence and pent-up exchanges in Q3 ranged from £534psf demand, as well as a number of high profile up to £1,788psf. launches translates into sales. Overall, we expect domestic demand to remain strong We saw quite a significant shift in buyers this as the market continues to be underpinned quarter. At 61%, UK buyers accounted for the by the favourable credit environment. In largest portion, while buyers from Asia made addition, the Bank of England has reduced up a further 26%. This compares with Q2 banks’ capital requirements. This has freed where there was an approximate even split up approximately £150bn of capital, a portion between UK and Asian buyers, each of which could be directed into the mortgage accounting for 45% of sales. Positively, we market. Lower interest rates could also lead continued to see a high proportion of to a further boost on the demand side. The investors across our developments in Q3, weakening of Sterling has resulted in signalling that they have not been deterred renewed interest from overseas, and we by the additional Stamp Duty introduced in expect the relative discounts offered by April. Investors accounted for 82% of buyers weaker currency to continue to generate this quarter, up from 75% in Q2. opportunities in the near term. 8–9

Case study: Spire London

Spire London is a 67-storey tower of 861 Apartment interiors suites, one, two and three bedroom apartments and penthouses, set in Argent Design has worked closely with landscaped open space on West India Greenland Group to create apartments with Quay by London’s Canary Wharf. At 771ft bright open interiors with 2.6 metre (8.5ft) in height above ground, it is the tallest high ceilings in the living spaces and residential tower in Western Europe. bedrooms, bordered by floor-to-ceiling Delivered by China’s Greenland Group, windows which will provide an abundance Spire London has just started construction of natural light. Features include comfort and is estimated to complete in 2020. cooling, large living areas, custom-designed open-plan bespoke kitchens and boutique The development hotel-style bathrooms with high quality finishes in natural materials including timber Located in Hertsmere Road, adjacent to and stone. Canary Wharf, Spire London is directly fronting onto the water of . Kitchen specification The tower has been designed to provide uninterrupted panoramic views over the –– Bespoke kitchen units in a combination whole of London capturing the Thames, of veneered and lacquered finish Canary Wharf, the City of London and the capital’s numerous famous and –– Reconstituted stone countertop and historic landmarks. Its striking and unique splashback architecture is inspired by the nautical history of the site and by the orchid, –– Miele or similar induction hob, oven a flower cultivated in China for more and microwave than 3,000 years. –– Siemens or similar dishwasher, Spire London will provide a range of fridge freezer amenities. The 35th floor Saffron Club spa will include a swimming pool, jacuzzi and –– Stainless steel under-mounted sink lounge areas, alongside a gym and fitness with mixer tap studio. A cinema room will provide the perfect venue for entertaining family and –– Integrated wine cooler friends, while residents will benefit from additional community space and an open –– Custom-designed compartmentalised deck garden on the third floor. To either cupboards side of the tower are the three-storey pavilion buildings providing over 5,000 sq ft Bathroom specification of high quality retail space with residents’ roof-gardens above. –– Polished natural stone floors and walls

At night, feature lighting around the top of –– Bespoke fitted vanity unit with stone the tower will reinforce the landmark countertop silhouette of Spire London, complemented by accent lighting to the trees, benches and –– Over basin mirror with anti-mister pad paved piazza, creating a striking impression and concealed cabinet to the approach to the building after dark –– Baths with overhead shower, hand shower Transport links and mixer taps

Spire London is conveniently located just a –– Walk-in shower with glass enclosure short walk from Canary Wharf underground station (Jubilee line) and Canary Wharf and –– Wall-mounted WC with concealed cistern West India Quay DLR stations, providing and soft-close seat cover access to Bond Street, Bank and City Airport within 15 minutes. It also has the –– Chrome bathroom fittings added benefit of the new Crossrail link due to open in 2018. A further benefit is the –– Chrome heated towel rail recently introduced 24 hour service of the Jubilee Line. 10–11

Development Consultancy Sales Lettings Land

Alan Selby James Bearryman Samuel Anderson Matthew Black Executive Director Associate Director Lettings Manager Senior Director T: +44 (0)20 7519 5902 T: +44 (0)20 7519 5917 T: +44 (0)20 7519 5931 T: +44 (0)20 7182 3474 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Joseph Selby Darren Gibbinson Edward Bonsu James Graham Senior Director Senior Sales Negotiator Senior Lettings Negotiator Associate Director T: +44 (0)20 7519 5913 T: +44 (0)20 7519 5920 T: +44 (0)20 7519 5918 T: +44 (0)20 7519 5925 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Matthew Leitch Tom Lyne Marcin Lukasiewicz Alex Lee-Bull Senior Director Senior Sales Negotiator Lettings Negotiator Associate Director T: +44 (0)20 7519 5927 T: +44 (0)20 7519 5932 T: +44 (0)20 7519 5908 T: +44 (0)20 7519 5926 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Helene Parry Georgina Pope Marc Dobber Associate Director Senior Sales Negotiator Surveyor T: +44 (0)20 7519 5910 T: +44 (0)20 7519 5906 Property Management T: +44 (0)20 7519 5914 E: [email protected] E: [email protected] E: [email protected]

Sam Spittles James Mansfield Rhonda Cole Associate Director Senior Sales Negotiator Associate Director T: +44 (0)20 7182 2443 T: +44 (0)20 7519 5911 T: +44 (0)20 7519 5916 Research E: [email protected] E: [email protected] E: [email protected]

Susie Middleton Nicola Freeman Jennet Siebrits Development Consultant Property Manager Head of Residential Research T: +44 (0)20 7519 5923 T: +44 (0)20 7519 5912 T: +44 (0) 20 7182 2066 E: [email protected] E: [email protected] E: [email protected]

Scott Cabot Operations Associate Director T: +44 (0)20 7182 2362 E: [email protected] Susanne Munroe Operations Director T: +44 (0)20 7519 5904 E: [email protected]

Please be advised that the statistics in this report are calculated from CBRE East London’s sales data. Values and prices are calculated from sales data from the selection of developments we are currently involved with and are not representative of the whole East London market.

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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. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. Some images are computer generated images for indicative purposes only. ©2016 CBRE Ltd.