RESIDENTIAL RESEARCH FOCUS ON: PARSONS GREEN 2016 LONDON MIDCITY BLOOMSBURY, CLERKENWELL, 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 London, 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, Canary Wharf 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 Farringdon station 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 Eurostar 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 Westminster, Islington 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 Crossrail, 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 central London, 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 CENTRAL SAINT MARTINS undersupplied when it comes to housing. LINCOLN SQUARE 1 221 CAMPUS Midcity spans sections of the four boroughs (NEW COURT) UNITS 8 of Islington, Camden, Westminster and the 226 ST PANCRAS 5 City of London. Housing delivery is failing 2 BARTS SQUARE 10 HOXTON UNITS to keep up with official estimated need in ST. PANCRAS 7 all four boroughs (Figure 2). Taken together, 3 THE DENIZEN 99 UNITS 3,231 additional dwellings were delivered SHOREDITCH during 2016-17, while estimated annual CITY UNIVERSITY 6 4 POSTMARK 515 OF LONDON 5 need is 5,766. UNITS LONDON EUSTON 9 SHOREDITCH Commercial Hubs 5 250 CITY ROAD 616 UNITS Factors underpinning residential demand FORMER ST MATTHEW'S 100 CLERKENWELL 6 have also supported office and retail activity, 6 and Midcity spans three commercial districts, HOSPITAL UNITS EUSTON SQUARE SILICON ROUNDABOUT 4 EXMOUTH MARKET each with their own distinct character. UNIVERSITY OLD STREET 7 CANALETTO 190 UNITS COLLEGE LONDON The northern section of Midcity is particularly KINGS CROSS QUARTER 98 SOAS UNIVERSITY popular among businesses from the 8 OF LONDON (GRIMALDI SQUARE) UNITS RUSSELL SQUARE technology, media and telecommunications sectors, who have sought out alternatives 8 3 to more established office locations due to CASS BUSINESS a variety of factors, including the relative SCHOOL SELECTED BUSINESSES THAT HAVE RUSSELL SQUARE HATTON GARDEN value and varying styles of architecture. TAKEN NEW OFFICE SPACE IN MIDCITY Recent tenancy agreements have been FARRINGDON BARBICAN SINCE 2015 signed by companies differing in size, from CITY OF LONDON SCHOOL FOR GIRLS growing start-ups like Monzo Bank to global 1 DEUTSCHE BANK AG technology firms like Google, which is 4 1 MOORGATE 2 developing a £1 billion campus on Midcity’s 7 northern fringe in King’s Cross (Figure 4). 2 DELOITTE LLP HOLBORN LIVERPOOL STREET 3 Midcity is also a hotspot for coworking, 3 DLA PIPER UK LLP LINCOLN'S and serviced office provider WeWork has INN FIELDS 2 leased six locations in Midcity totalling more 1 ONE NEW CHANGE than 500,000 square feet since 2015. 4 ITV PLC LONDON SCHOOL OF ST PAUL’S SHOPPING CENTRE ECONOMICS AND The southern quarter of Midcity is home to 5 EXPEDIA POLITICAL SCIENCE ROYAL COURTS London’s legal industry, with the Royal Courts THEATRE DISTRICT OF JUSTICE BANK of Justice at the centre, surrounded by the COVENT GARDEN ST PAULS CATHEDRAL Inns of Court – the associations for barristers 6 WEWORK TEMPLE CITY OF that have been present in the area since MANSION HOUSE LONDON 1320. The legal district, which contains many BLACKFRIARS CANNON STREET 7 CLEARY GOTTLIEB STEEN & HAMILTON LLP LONDON barristers’ chambers and solicitors’ offices, ROYAL OPERA HOUSE MONUMENT TEMPLE 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 CHARING CROSS to give way to financial services firms on the 10 ETSY EMBANKMENT 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 Greater London Midcity, while Kings Cross is a brand new United Kingdom 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 Russell Square 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, Exmouth Market, 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.