Wapping A local market review snapshot overview Wapping – history and character

Wapping’s rich maritime history In the post-recession recovery period In the 19th century Britain’s trade industry and riverside location make it one London’s housing market has performed was booming and the majority of its ships strongly, outperforming the wider UK by a returned to London, making it one of the of London’s most desirable places significant margin. Prices across the city are busiest ports in the world. However, it was to live and demand for homes is now 36% above their previous peak. Some clear that the city’s informal riverside wharves extremely high. This has resulted of the strongest growth occurred in 2014 could no longer keep up with demand. with annual growth peaking at 21% in London needed to build docks, and one in a price premium over the wider August. The market is maintaining needed to be as close to the City as possible borough which has averaged 44% sustainable and robust growth, with 9% to allow easy access to market. A site was over the last five years. inflation in the year to May 2015. chosen in Wapping and The London Dock was born with the first ship mooring on Moreover, activity in the new build market 31 January 1805. remains extremely strong and demand is high, with 67% of the 51,000 new build Today, Wapping maintains its maritime homes under construction already sold. character; public houses line the river with This is the highest absorption rate of new steps down to the water and the converted build stock in recent years. warehouses ensure the area’s rich history is clearly visible, making it one of the most desirable areas of the borough. It offers proximity to the river and easy access to the City and . In addition to local amenities, it is also close to several trendy social scenes including , Angel and . And a short walk to Wapping, Aldgate East or stations, which is soon to join the new Crossrail network, means the rest of the city is easily accessible.

London’s new build market

60,000 80%

70% 50,000

60%

40,000 50%

30,000 40%

30% 20,000 Private units under construction 20%

10,000 10%

0 0 average Q1 2015 End 2007 End 2008 End 2009 End 2010 End 2011 End 2012 End 2013 End 2014 2001–2006

Sold Unsold Proportion Sold (RHS) Demographics and demand House prices and growth This is likely to continue to increase; other for homes submarkets with proximity to the river that Since 2007 price growth in Tower Hamlets have emerged in recent years include The population of Tower Hamlets currently has performed largely in line with the Nine Elms and the Southbank where stands at 273,000. This follows growth of London average. However, strong growth apartments sold for a premium of 100% 39% since 2001, the highest rate of in 2014 saw prices increase by 19% across and 50% in 2014. Growth in these population growth in London. This trend is the borough compared with 15% for submarkets has also been strong with expected to continue with a further 43,000 London overall and Tower Hamlets is now values in the Southbank increasing 13% increase over the next six years to 2021 outperforming the wider city. In the year last year. However, with a significant quantity (again the highest projected increase to May 2015 the average house value in of new build development, values across throughout London). Overall, London has a the borough increased by 13% versus Nine Elms rose by 61% in 2014. This clearly severe undersupply of housing but this is 9% across London. illustrates how high quality development even more acute in Tower Hamlets. The can unlock the potential of an area, pronounced population and household Wapping’s rich history and prime which then drives demand and results in growth is exerting increased pressure on the riverside location makes it one of London’s significant capital appreciation. borough’s housing stock which is fuelling most desirable residential areas. As a price inflation. result, Wapping is a distinct sub-market The desirability of Wapping is further within Tower Hamlets where homes sell enhanced by its relative affordability with The demand for housing in Wapping itself for a premium. other neighbourhoods, especially those is high. It is adjacent to the employment offering proximity to the river such as Nine hubs of the City, Canary Wharf and close In the first quarter of 2015, apartments in Elms, and the Southbank. to the newly formed Tech City, where the Wapping sold, on average, at a 23% employment rate grew at six times the premium to the rest of the borough. national average last year. Collectively these Overall, Wapping attracts the highest house areas host over half a million high earning prices in Tower Hamlets and over the last workers and it will come as no surprise that five years the premium for apartments in Canary Wharf and the City attract the the area has averaged 44%. highest salaries in London, at £81,000pa and £66,000pa respectively.

As a result, Wapping attracts an affluent cohort of young Londoners looking to buy or rent. Its population has grown by 10% since 2001, with a third of residents aged between 25 and 34. Demand for homes is high but with only one development of 380 homes completed in recent years there is acute pressure on the area’s housing stock. Average house price index Transactions in Wapping increased by 88% in the last year alone and the appetite 160 for new build homes across Tower Hamlets is extremely strong; all of the 1,433 homes 150 completed in the last year have sold and 80% of homes under construction have been purchased off-plan. This absorption 140 is significantly higher than the London average of 67%. 130

120

110

100 Average huse price index =(Base = Jan 2007) Average 90

80 2007 2008 2009 2010 2011 2012 2013 2014 2015

London Tower Hamlets Base The rental market Connectivity The placemaking premium

The rental market across Tower Hamlets has Proximity to work is a big draw for many A further appeal is the significant amenity also performed strongly, with annual growth buyers and renters. The area is very well offering; there are an array of local averaging 4.6% since 2005. And like capital connected for accessing the rest of the city, restaurants and bars along the river and this values, there is also a premium attached to with Wapping, Aldgate East and Whitechapel will soon be complimented by the many renting in Wapping. In the first quarter of stations a short walk away. In addition, shops, bars and restaurants at London Dock 2015 the average rent for a 2 bed apartment Whitechapel will be joining the Crossrail itself. In addition, the nearby social scenes of was £2,483pcm, 16% higher than the network when the line opens in 2019. Shoreditch, Angel and Westfield in Stratford borough average. This will translate into an average journey can be easily accessed from Wapping. time reduction of more than 50% from Whitechapel to some of the main stations Placemaking schemes have been shown to on the network. A journey to Bond Street, trigger an uplift in value. Research led by for example, will be reduced from 24 CBRE, in collaboration with the Royal minutes to just 10 minutes. Institution of Chartered Surveyors (RICS), found that placemaking creates a price premium of at least 10%. Further, as the development matures, its reputation grows and a sense of identity is created resulting in this premium increasing substantially over time. This will translate into strong capital appreciation over and above the local area. 5 year House price forecasts 2015 2016 2017 2018 2019 growth 2015-19 We maintain a positive outlook on the market which will continue to see robust growth underpinned by the fundamental supply and UK 6% 5% 4% 4% 4% 25% demand imbalance across London. We fully expect Wapping to perform in line with these forecasts. However taking into account the London 7% 5% 5% 5% 6% 31% impact of Crossrail and the placemaking effect of London Dock, there is potential for the area to significantly outperform.

Total travel time from Central Wapping

Shoreditch High Street Westfield Stratford Tech City 15 mins 30 mins 25 mins

Brick Lane 16 mins Whitechapel 16 mins 14 mins Aldgate East 8 mins DLR Tower Gateway DLR 11 mins The City 8 mins 19 mins 9 mins Wapping Station Canary Wharf 10 mins 25 mins Borough Market 25 mins

Public transport times Walking times Contacts Jennet Siebrits Mark Collins Head of Residential Research Chairman of Residential +44 20 7182 2066 +44 20 7182 2264 [email protected] [email protected]

Tom Bryant Charles Leigh Director Residential Development Senior Director Residential Development Sales & Consultancy Sales & Consultancy +44 20 7182 2562 +44 20 7182 2288 [email protected] [email protected]

Sources CBRE, Molior, Rightmove, travel times from TFL and walkit.com

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. 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. Images provided are computer generated. © 2015 CBRE Ltd.