FOCUS ON: PARSONS GREEN ELMS, BATTERSEA - RESIDENTIAL RESEARCH 2016 VNEB REPORT - Knight Frank
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RESIDENTIAL RESEARCH FOCUS ON: VAUXHALL, NINE PARSONS GREEN ELMS, BATTERSEA 2016 VNEB REPORT 2018 REGENERATION TRANSPORT HUB MIXED USE AREA
VAUXHALL, NINE ELMS,
VNEB is no longer just a BATTERSEA
masterplan – there are The Vauxhall Nine Elms and Battersea (VNEB)
residents, workers, businesses Opportunity Area is a 227-hectare riverside district that
and diplomats who now includes a new cluster of residential towers, the Battersea
Power Station redevelopment and a new US Embassy.
occupy this community.
CHARLES DUGDALE
PARTNER, RESIDENTIAL DEVELOPMENT
Transport infrastructure in more than seventy years. Tunnelling
work to two new stations at Battersea
Regeneration and transport upgrades have Power Station and Nine Elms completed
created new demand and underpinned in November, and from 2020 when the
residential market performance in many stations open, residents will be able to
locations in London in recent years. reach the City or West End in fewer than 15
FIGURE 1
Vauxhall and the surrounding VNEB minutes (Fig 2).
Pricing growth compared
Indexed 100 = Q1 2010 opportunity area is one of London’s
largest regeneration schemes and is Public realm improvements
190
located around a transport hub adjacent to The transport upgrades are taking place
Wandsworth*
180 Lambeth* some of the most affluent areas of prime alongside sweeping improvements to the
Prime Central London
central London. public realm. Vauxhall is to be dramatically
170
remodelled, establishing a pedestrian-
Vauxhall station, where a £36 million
160 friendly town centre, with more public
revamp has recently been completed, is
spaces and room for cafes, restaurants
150 on the Victoria tube line, with direct trains
and shops. Plans to redesign the one-
running every two minutes to the West
140 way traffic gyratory, opening the whole
End and Kings Cross. The station also area up for pedestrians through to Albert
130 has mainland rail services, carrying Embankment, are to be completed by
passengers to the Home Counties 2022. A new linear park will snake through
120
and south coast. River buses run to the whole regeneration project, linking
110 Embankment, Blackfriars and Canary Vauxhall to Battersea Power Station and
Wharf from piers at St George Wharf and a new US Embassy.
100
Battersea Power Station.
Pedestrians can already reach Westminster
90
2010 2011 2012 2013 2014 2015 2016 2017 The wider area is now primed to benefit via Vauxhall Bridge and the proposed Nine
Source: Knight Frank Research/Land Registry from further transport upgrades, including Elms Pimlico Bridge will add to the area’s
*Three month rolling average the first extension to the Northern Line cross-river connectivity.
FIGURE 2
Transport connectivity
CURRENT TRAVEL TIMES FROM 2020
VNEB CONNECTIVITY VNEB CONNECTIVITY
14 14 26 37 15 15
MINS MINS MINS MINS MINS MINS
VAUXHALL TO VAUXHALL VAUXHALL TO VAUXHALL BATTERSEA POWER BATTERSEA POWER
BOND STREET TO BANK CANARY WHARF (ST GEORGE WHARF PIER) STATION, NINE ELMS STATION, NINE ELMS
TO CANARY WHARF PIER TO BOND ST TO BANK
VICTORIA JUBILEE VICTORIA NORTHERN VICTORIA JUBILEE THAMES THAMES NORTHERN NORTHERN
LINE LINE LINE LINE CLIPPER CLIPPER LINE LINE
Source: Knight Frank Research/Transport for London
94%
2 Please refer to the important notice at the end of this reportVAUXHALL, NINE ELMS, BATTERSEA 2018 RESIDENTIAL RESEARCH
The improvements, part of a £1 billion Commercial impact feet of office space upon completion, Apple has agreed a deal to move 1,400 Nine Elms has also been the subject have contributed to an ongoing uplift
revamp of local infrastructure, are which is scheduled for 2026. The first staff from offices across several locations in of diplomatic interest, and a new in amenity and lifestyle.
The £9 billion project to revamp the
enhancing the area’s attraction not just Grade II* listed Battersea Power Station, two residential phases, comprising 1,120 the capital to a new ‘campus’ at the power American Embassy opened in January.
to residents but to businesses whose which has been empty since it was private homes, have all been sold. Phase station. In August the developer received In Vauxhall, recent openings including Residential pipeline
workers will have additional transport decommissioned in 1983, is taking shape. three, comprising more than 1,200 private approval to add an extra 40,000 square feet Damien Hirst’s Newport Street Gallery Around 5,650 private units are under
options to travel to the area. It will include more than 1.25 million square units, is currently under construction. of office space in the former engine room. and Soho House restaurant Dirty Burger construction in the VNEB opportunity
1 EMBASSY FIGURE 3 THE RESIDENCE
GARDENS PH 1 Development pipeline* Northern Line extension stations Viaduct Construction Under Complete Not P ercentage 15 PH 2
not started construction launched Sold
2 EMBASSY 16 THE CORNICHE
GARDENS PH 2
A3213
St
EMBASSY Pl 17 THE DUMONT
3 ott
ury
c Va
GARDENS PH 3 ay u
Eb
xh
Kennington Road
Dr all
Br Bl a
idg
eR 16 ck VOX, 36-46 ALBERT
oa
17
P rin 18 EMBANKMENT
4 RIVERLIGHT A3214 St
d ceR
d
Ge
org
e’s
ment
D
Su
r 19 THE TOWER
5 BATTERSEA POWER
Albert Embank
STATION PH 1
the
rla Pimlico
nd 18
St
Lupus
Street 20 VAUXHALL CROSS
BATTERSEA POWER
Ch
6 Va
u
els
STATION PH 2 xh
all
ea
Bri
Br
dg
idg
e
21 ONE NINE ELMS
eR
oa
BATTERSEA POWER
7
d
STATION PH 3
Vauxhall Ha
rle 22 AYKON
y fo
8 BATTERSEA POWER rd
Ro
Rd
e nor
Chelsea Br
STATION PH 4+ Grosv 19 ad
20
23 VAUXHALL SQUARE
21
idge
9 VISTA 23
22 The
Oval VAUXHALL SKY
28 24 GARDENS
3 Vauxhall
10 NINE ELMS Park
GARDENS 4 sL
n
6 BATTERSEA eE
lm
1 24 25 26 25 BELMONT
5 Nin
POWER STATION 2
PRINCE OF WALES
11 DRIVE PH 1 27
14 26 KEYBRIDGE PH 1**
9 13 15 29
PRINCE OF WALES 8 Nine Elms
11 DRIVE PH 2+ Battersea Park 7 30
S La
Battersea 10 26 KEYBRIDGE PH 2
mbet
A3036
h Road
BATTERSEA
12 EXCHANGE PH1
Brixton
11 27 NINE ELMS POINT**
R oad
BATTERSEA
12 EXCHANGE PH2+ NINE ELMS
Battersea Park 28
Caldwell Stree
A3
t SQUARE
12
13 NINE ELMS A3205 29 NINE ELMS
PARKSIDE** STATION
Lans
dow
THE RESIDENCE Queenstown Road ne Way
14 PH 1** *Completion dates from 2018 onwards, excludes student housing ** Schemes include Build-to-Rent units
30 NINE ELMS GROVE
Source: Knight Frank Research/Molior
3 4VAUXHALL, NINE ELMS, BATTERSEA 2018 RESIDENTIAL RESEARCH
area, constituting about 9% of all private funding for land and construction has overseas students applying to London
homes currently under construction in increasingly been led by investors from universities. The number of overseas
the capital. Almost 60% of units under North America, China, Russia and the applicants has climbed from 91,790 in
construction, which are due to complete Middle East (Fig 5). 2009 to 137,745 in 2016, according to
over the next two to three years, have UCAS data (Fig 4).
been sold. The type of housing under construction
in Vauxhall has become more diverse
A further 6,800 homes have been
as regeneration has progressed. Residential pricing
granted planning (Fig 3).
Larger sections of private rented sector Average residential prices in Wandsworth
accommodation and a student housing and Lambeth, the borough in which
pipeline of 1,865 beds has emerged, Vauxhall sits, have climbed 68% and
underpinned by rising numbers of 81% respectively since the beginning
VNEB, with the arrival of
Apple, is now a recognised FIGURE 5
Global attraction
office location for occupiers Table shows the year and origin of primary funding for each residential development in the VNEB
opportunity area
to consider with all the
infrastructure to support 2011
and earlier
2012 2013 2014 2015 2016 2017 2018
global businesses.
IAN MCCARTER
PARTNER, LONDON WEST END AGENCY
The VNEB area has attracted
development finance from around the
world and investment in land has taken
an increasingly international flavour,
underlining the global appeal of London
real estate. Over the last two years, Source: Knight Frank Research
Two
5,650
FIGURE 4
Number of overseas students
applying to London universities 3.2km
private
Northern Line tunnels
to Battersea Power
Station and Nine Elms
units
160,000
are now complete.
ng UK)
are under construction in the
VNEB opportunity area
140,000
Since 2010, in Lambeth, average Prices in Prime central Apple will move
1,400
120,000 residential prices have climbed London are forecast to
81%
climb by
100,000
12.6%
between 2018 and 2022
staff to a new headquarters at
Battersea Power Station
80,000
£
2016 2009 2010 2011 2012 2013 2014 2015 2016
Source: UCAS
5KNIGHT FRANK
INTELLIGENCE
For the latest news, views and analysis
on the world of prime property, visit
KnightFrank.com/blog
of 2010. This exceeds the 42% growth Prices in Prime central London west
in prime central London over the same will climb by 12.6% between 2018 and RESIDENTIAL RESEARCH
period (Fig 1). 2022, according to the latest Knight Patrick Gower
In the wider Prime central London Frank forecasts. Those in Prime Outer Associate
market, price rises are likely to be muted London, are likely to climb 12.5% over +44 20 3640 7015
the same period. However, there is room patrick.gower@knightfrank.com
for the next year or two, with increased
momentum from 2020, based on the for outperformance in areas that are Gráinne Gilmore
assumption that a Brexit deal is agreed undergoing large-scale changes through Head of UK Residential Research
by then. regeneration and development. +44 20 7861 5102
grainne.gilmore@knightfrank.com
RESIDENTIAL DEVELOPMENT
Charles Dugdale
Partner
+44 20 7861 5411
charles.dugdale@knightfrank.com
Emma Fletcher-Brewer
Partner
+44 20 7861 1705
emma.fletcher-brewer@knightfrank.com
Picture credit: Mount Anvil
Knight Frank Research provides strategic
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MARKET FORECAST
The global perspective on prime property and investment
Headlines Dec 2017
UK house price growth has been
UK HOUSE PRICE FORECAST
LONDON
All our clients recognise the need for expert
DEVELOPMENT
UK house price growth has moderated from recent peaks, although
independent advice customised to their
slowing since the summer of 2014, markets remain highly localised.
although the annual change
remains positive
The momentum in house price growth is observed in the prime housing markets in LONDON SUPER-PRIME LETTINGS INSIGHT SPRING 2018
HOTSPOTS
slowing in many parts of the country, and London and beyond are set to continue,
Price growth across the UK is expected we expect price rises to remain muted and we explore this more fully in our blog.
to be 1.0% in 2018, reaching 14.2% overall next year amid increased economic The UK may now be entering a period of Price sensitivity in the sales market meant there was a record number of super-
cumulatively between 2018 and 2022 and political uncertainty in the run-up to interest rate rises, but even so, we expect prime tenancies in 2017. However, an anticipated recovery in sale prices means
Brexit and amid more muted forecasts for
specific needs.
rates to be low compared to long-term there are more ‘try-before-you-buy’ tenants, as Tom Smith tells Tom Bill
In London, prices are forecast to fall by
wage growth. The market is localised and
we see slightly stronger growth in the
norms by the end of the forecast period.
While development levels are rising across
RESIDENTIAL DEVELOPMENT
0.5% in 2018, but cumulative price
growth over the next five years is
Midlands, East of England and the North the country, the shortage of new homes is
There was a record number of super-prime
tenancies agreed in London in 2017 as price-
compared to 11 in 2016. “There is increasingly
the opportunity to rent the sort of high-quality
OPPORTUNITY AREAS 2018
West, a continuation of the trend that has unlikely to be fully reversed in the coming sensitivity in the sales market continued to boost
positive at 13.1% stock that has come from the sales market that
emerged this year. years, and that will underpin pricing. demand. historically did not exist on the lettings market,”
Once the Brexit deal is completed, we On the other hand, factors such as said Tom. “The clear message for landlords is Prince Albert Road, let, guide price £12,000 p/w
Some 137 properties were rented out at £5,000-
forecast rising momentum across the deepening affordability pressures and that super-prime tenants will not compromise on
plus per week last year, which represented a
THE WEALTH REPORT 2018
market, with price growth reflecting this in property taxes, will continue to weigh quality in the same way as buyers will not.”
34% increase on the figure of 102 in 2016. In the
many locations. The variations currently on pricing. three-month period between July and September The prime central London sales market is now
there were 49 transactions, which is a record for a moving towards recovery mode as higher
single quarter in 12 years of LonRes data. transaction costs are absorbed. Average prices
2017-2022 Forecasts, December 2017 above £10 million rose 0.2% in the year to
“The momentum of recent years is still gathering
pace,” said Tom Smith, Knight Frank’s head of January 2018, the first annual increase in almost
2017 2018 2019 2020 2021 2022 2018 - 2022
super-prime lettings. “Demand is resilient due to two years.
Mainstream residential sales markets
Kensington Palace Gardens, let, guide price £15,950 p/w
higher rates of stamp duty and the associated In a sign that more tenants are anticipating this
UK 1.5% 1.0% 2.0% 3.0% 3.5% 4.0% 14.2%
uncertainty over the short-term prospects for recovery, there has been an increase in the
London -1.0% -0.5% 2.5% 3.0% 3.5% 4.0% 13.1% price growth in the sales market. A lack of clarity number who have requested a clause in the
North East 2.0% 2.0% 2.0% 4.0% 3.0% 3.0% 14.8% regarding Brexit has also been a factor.” tenancy agreement giving them first refusal to Super-Prime Lettings Team
North West 2.0% 1.0% 2.0% 4.0% 4.0% 4.5% 16.4% As well as more transactions, the deals agreed buy at the end of the tenancy. The Knight Frank Super-Prime Lettings team
Yorks & Humber 0.5% 1.0% 2.0% 3.0% 3.0% 3.0% 12.6% are now on a longer-term basis as renting “This option was rarely mentioned a few years
provides a bespoke service to clients with property
becomes more accepted as a tenure model in interests of £5,000-plus per week in prime central
East Midlands 4.5% 2.0% 2.5% 2.5% 3.0% 3.5% 14.2% ago but is now a frequent topic of conversation
the super-prime market, said Tom. The average London. Led by Tom Smith, the team consists of
West Midlands 4.5% 2.0% 2.0% 3.0% 3.0% 4.0% 14.8% on viewings. Many landlords have nothing to
length of a tenancy in 2017 was 589 days, which 12 local specialists with over 130 years of collective
lose with this ‘try-before-you-buy’ route,” says
Methodology Statement: East 1.0% 2.0% 3.0% 3.0% 4.0% 3.0% 15.9% compared to 548 in 2016 and 528 in 2015, an experience and has a dominant market share in
Tom. “The worst case scenario is that you have
House price forecasts are based upon time series
South East 3.0% 0.0% 2.0% 3.0% 4.0% 4.5% 14.2% analysis of Knight Frank data shows. London. It completed twice as many super-prime
regression analysis of relevant statistically significant an income stream that covers your costs and
macro-economic variables adjusted in-house to lettings deals in London as its nearest competitor
South West 4.0% 1.0% 2.0% 2.5% 3.5% 4.5% 14.2% There was also a record number of £15,000- the best is that you also have a sale at the other
encompass externalities such as likely risk factors. in 2017, LonRes data shows. The team members
The forecast uses the Nationwide House Price Index
Wales 1.5% 1.5% 1.5% 2.5% 3.0% 4.0% 13.1% plus per week deals last year, with 20 recorded end.”
as a base. Our forecasts assume a Brexit deal, but are based in Belgravia, Belsize Park, Chelsea,
with a two year transitional period. Hampstead, Hyde Park, Kensington, Knightsbridge,
Scotland 1.5% 1.0% 1.0% 2.5% 3.5% 3.5% 12.0%
FIGURE 1
Marylebone, Mayfair, Notting Hill, South Kensington
Prime residential sales markets London super-prime lettings volumes and rental values
and St John’s Wood. Knight Frank’s global real
Prime central London east 0.0% 0.5% 1.5% 2.5% 3.0% 5.0% 13.1% Total Transactions Average weekly rent Maximum weekly rent estate network gives the team access to London’s
most exclusive properties on and off the market.
Prime central London west 0.0% 0.5% 1.5% 3.5% 3.0% 3.5% 12.6% 50
£45,000 £45,000
“The market is localised and Prime outer London -1.0% 0.0% 1.0% 3.0% 3.5% 4.5% 12.5% 40 £30,000
£35,000
£29,000 £25,000 £30,000
we see slightly stronger £16,800 £15,000£18,500 £13,500
£20,000
Prime England & Wales 0.7% 1.5% 2.0% 2.0% 2.0% 2.0% 9.9% 30
growth in the Midlands, Tom Smith
East of England and the Residential rental markets 20 £10,000
Head of Super-Prime
North West, a continuation UK 1.2% 2.5% 2.5% 2.5% 3.0% 3.0% 14.0% 10 £8,000 Lettings
of the trend that has London 0.7% 3.0% 2.5% 3.0% 3.0% 3.0% 15.0% 0 £6,000
tom.smith@knightfrank.com
2018 emerged this year.” +44 20 7881 7730
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Prime central London -1.5% 0.5% 1.5% 2.5% 3.0% 3.0% 11.0%
12th Edition For the latest news, views and analysis Prime outer London -3.5% -1.0% 1.0% 2.0% 2.5% 3.0% 8.0%
on the world of prime property, visit
our blog or @kfintelligence
Source: Knight Frank Research
NB. Price forecasts are for existing homes. Property values in the new-build market may perform differently. Source: Knight Frank Research / LonRes AREAS TO WATCH PRICE FORECASTS MARKET UPDATE
The Wealth Report UK Housing Market London London Super London Development
- 2018 Forecast - Dec 2017 Prime Lettings 2018 Hotspots 2018
Important Notice
DEVELOPMENT CONSULTANCY RESIDENTIAL RESEARCH
RESIDENTIAL RESEARCH
© Knight Frank LLP 2018 – This report is published
for general information only and not to be relied upon in
MULTIHOUSING 2017 LONDON
PRS RESEARCH
DEVELOPMENT any way. Although high standards have been used in
CROSSRAIL RETIREMENT
DESIGN STUDY ANALYSING PROPERTY MARKET PERFORMANCE
the preparation of the information, analysis, views and
SPRING 2017
ALONG THE ELIZABETH LINE 2017
HOUSING
MARKET UPDATE
Q1 2018 projections presented in 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 necessarily represent
the view of Knight Frank LLP in relation to particular
properties or projects. Reproduction of this report in whole
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HOW HAVE PRICES
PERFORMED?
LOOKING TO THE FUTURE:
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