GLOBAL WATERFRONT REPORT - 2019 RESEARCH - Knight Frank

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GLOBAL WATERFRONT REPORT - 2019 RESEARCH - Knight Frank
RESEARCH

GLOBAL
WATERFRONT
REPORT
2019

       MEASURING THE PREMIUM A WATERFRONT PROPERTY GENERATES
                   IN KEY CITIES AROUND THE WORLD
GLOBAL WATERFRONT REPORT - 2019 RESEARCH - Knight Frank
GOING WITH
THE FLOW
Water resources have long played an important role in the pattern
of human settlement. Today however, owning a slice of a prime
waterfront is less to do with its transport or agricultural value and
far more to do with the iconic views and lifestyle it affords.

                                    From the panorama of Sydney Harbour
                                    to the serenity of Lake Geneva and from
                                    Hong Kong’s bustling waterways to the
                                    iconic Thames skyline, waterfront             Waterfront properties are also
                                    addresses are amongst the most
                                                                                  amongst the most liquid. Even
                                    desirable in the world.
                                                                                  in a depressed market, due to
                                    Such is the demand for frontline property,    their position and scarcity, a
                                    be it on a beach, river, lake or harbour we   front-line waterfront property
                                    thought we’d take a closer look at what       will face strong demand with
                                    price premium such properties generate
                                                                                  prospective buyers aware
                                    and how this varies around the world.
                                                                                  that their future exit strategy is
                                    According to the new Knight Frank Global      also secure.”
                                    Waterfront Monitor, compiled by
                                    valuations from our global network, prices
                                    for prime waterfront properties are on
                                    average 40% higher than comparable
                                    properties inland.

                                    The index measures the potential value
                                    uplift for prime homes on the water’s
                                    edge compared with similar properties
                                    located further inland without access to,     The lifestyle and additional amenities
                                    or a view of, water.                          that a waterfront home offers is a key
                                                                                  motivation for many buyers. From

     40%
                                    Not all prime waterfront properties are       private moorings to jetties and quays,
                                    equal, however, and much like the diverse     waterfront properties offer easy access
                                    nature of global property – from luxury       to numerous watersports along with an
                                    apartments in Chelsea to sprawling villas     ever-changing panorama.
                                    in Dubai and converted warehouses on
                                    Berlin’s River Spree, premiums vary by        By classifying each property according to
                                                                                  its characteristics and exact location, our
     The average uplift             location and amenity.
                                                                                  data reveals that being located alongside

      for a waterfront              Our data shows that individuals from all
                                    over the world searched for prime
                                                                                  a harbour generates the highest premium
                                                                                  of 59.1%. However, at 58.5%, a
      property across               waterfront property last year, led by
                                    prospective buyers from the UK, US,
                                                                                  beachfront home is not far behind with
                                                                                  Sydney and the Gold Coast registering
          12 cities.                Canada and Australia.                         some of the highest uplifts.

2   RESEARCH KNIGHT FRANK
GLOBAL WATERFRONT REPORT 2019                               RESIDENTIAL RESEARCH

FIGURE 1                                                                                                             FIGURE 2
                                                                                                                     Which type of waterside living commands the largest premium?
Knight Frank Global Waterfront Monitor
Premium calculated as at Q3 2018

                                                                                                                                                                                                                      LAKE
                                                                                                                                HARBOUR                        BEACH                        RIVER

                                                                                                                         59.1%                          58.5% 36.8% 32.7%
                                                                                                                       FIGURE 3
                                                                                                                       Which nationalities are searching for waterfront homes?
                  LONDON 30.0%                                                                                         1 Jan 2018-30 Oct 2018

                                    BERLIN 28.0%
           PARIS 48.0%           LAKE GENEVA 32.7%
                                                                                                                            UNITED                   UNITED                 CANADA               GERMANY               FRANCE
             MONACO 11.1%                                                                                                  KINGDOM                   STATES                    3                    4                     5
                                                                                                                               1                        2

                                                                         HONG KONG 39.9%

                                                   DUBAI 50.7%                                                          SWITZERLAND               AUSTRALIA             UNITED ARAB                 SPAIN                ITALY
                                                                                                                             6                        7                  EMIRATES                     9                    10
                                                                                                                                                                             8
                                                                                                                        Source: Knight Frank Global Property Website. Based on online viewings 1 Jan to 31 Oct 2018
                                                            SINGAPORE 7.7%
                                                                                                                          CHINESE BUYERS AND THE IMPORTANCE
                                                                                                                          OF FENG SHUI
                                                                                            GOLD COAST 64.1%              Water has global appeal, by producing negative ions it boosts energy with research showing
                                                                                                                          it has significant health benefits.
                                                                                                                          For one particular world region – arguably the most important for global markets in today’s
                                                                     PERTH 53.2%                                          world – Asian and especially Chinese buyers, water is more than a mood enhancer but of critical
                                                                                              SYDNEY 89.3%                importance when considering both where and the type of property to purchase. Feng Shui (Shui
                                                                                                                          meaning water) is usually fundamental to Chinese buyers’ decision-making.

                                                                                           MELBOURNE 30.4%                Water signifies wealth in Feng Shui and can bring good fortune and prosperity. It should be
                                                                                                                          slow moving and clean, rather than stationary and stagnant. The property should be elevated
                                                                                                                          above the water and if on a river, should ideally be positioned on a winding section where the
                                                                                                                          pace of flow is slower. Fast moving streams and rivers are often avoided as this suggests
                                                                                                                          wealth is rolling away.

Source: Knight Frank Research

3   RESEARCH KNIGHT FRANK                                                                                                                                                                                     KNIGHT FRANK RESEARCH   4
GLOBAL WATERFRONT INDEX 2019

2018 RESULTS
At 89%, Sydney sits in first place            According to Taimur Khan, Knight Frank’s          Berlin’s uplift of 28% is set to increase
generating the highest premium for            Research Manager in Dubai, “Palm                  as availability of land along the River
waterfront properties. Here, homeowners       Jumeriah, overlooking the Arabian Gulf,           Spree lessens. According to Till Brühöfener-
vie for the best views of the Harbour         is Dubai’s most desirable waterfront              McCourt, Head of Research at Ziegert
Bridge or Opera House. Asked why              location. The scarcity of the product,            Immobilien, Knight Frank’s partner in
Sydney leads the rankings, Michelle           along with the fact waterfront properties         Germany “With fewer new-build opportunities
Ciesielski, Knight Frank’s Director of        are usually best-in-class in terms of             available and a finite number of properties,
Research comments, “From its iconic           specification and amenities, has insulated        values are rising, particularly those in the city
New Year celebrations to the starting         values over the last decade.”                     centre close to Charlottenburg, Mitte-Mitte
point of the Sydney to Hobart yacht race                                                        and Friedrichshain.”
                                              In Geneva, Cologny is the city’s most
on Boxing Day, residents are treated                                                            At 2.02 square kilometres, Monaco (11%)
                                              desirable neighbourhood, however, the
to expansive views of one of the world’s                                                        is the world’s second-smallest state and
                                              main Quai de Cologny road runs along the
best waterscapes.”                                                                              nearly all of its 1,839 homes have views of the
                                              perimeter of the Lake inhibiting the view
                                                                                                Mediterranean. This, combined with the fact
Waterfront properties are also amongst        from this exclusive enclave. Instead, those
                                                                                                that the Rue de Princesse Grace hugs much
the most liquid (no pun intended). Even in    seeking a lakeside home look to the
                                                                                                of the coastline means being in the heart of
a depressed market, due to their position     neighbouring villages of Vésenaz or Anieres.
                                                                                                Monte Carlo or buying an apartment on a
and scarcity, a frontline waterfront          Here, a frontline property sees a premium
                                                                                                higher floor to secure a prime vantage point
property will face strong demand with         of 33%.
                                                                                                is almost as desirable as securing a home
prospective buyers aware that their future
                                              Properties on the edge of the Thames in           with direct waterfront access.
exit strategy will also be assured.
                                              London generate a premium of around               Analysis shows there is some correlation
Perth (53%), Dubai (51%) and Paris            30%. The Knight Frank Riverside area, which       between the volume of water and the
(48%) sit mid-table but unlike Paris, where   stretches from Fulham to Southwark, is            premium generated. Where water is in
new-build opportunities are scarce and        made up of around 13,000 properties, yet          abundance – island properties such as
waterfront homes are older high-ceilinged     this narrow belt alongside the Thames             Hong Kong and Singapore – the premium
Haussmann homes along the Seine, both         accounts for only 0.4% of the Central             is smaller. Singapore registers the lowest
Perth and Dubai’s offering in terms of        London’s 3.7 million housing stock. This          premium (7%) and here our research
waterfront living is skewed towards           scarcity of supply explains the uplift, a trend   confirms that sea views command a
new-build beachfront living.                  that we are seeing reflected globally.            higher premium than river views.

                                                                                                                KNIGHT FRANK RESEARCH         5
RESEARCH
                                                                                                                                                                                                                                                                                                                                                                              Liam Bailey
                                                                                                                                                                                                                                                                                                                                                                              Global Head of Research
                                                                                                                                                                                                                                                                                                                                                                              +44 20 7861 5133
                                                                                                                                                                                                                                                                                                                                                                              liam.bailey@knightfrank.com

                                                                                                                                                                                                                                                                                                                                                                              Kate Everett-Allen
                                                                                                                                                                                                                                                                                                                                                                              International Residential Research
                                                                                                                                                                                                                                                                                                                                                                              +44 20 7167 2497
                                                                                                                                                                                                                                                                                                                                                                              kate.everett-allen@knightfrank.com

                                                                                                                                                                                                                                                                                                                                                                              MEDIA ENQUIRIES
                                                                                                                                                                                                                                                                                                                                                                              Rebecca Sands
                                                                                                                                                                                                                                                                                                                                                                              International PR Manager
                                                                                                                                                                                                                                                                                                                                                                              +61 29 0366 833
                                                                                                                                                                                                                                                                                                                                                                              rebecca.sands@au.knightfrank.com

                                                                                                                                                                                                                                                                                                                                                                          Important Notice
                                                                                                                                                                                                                                                                                                                                                                          © Knight Frank LLP 2018 – This report is published
                                                                                                                                                                                                                                                                                                                                                                          for general information only and not to be relied upon in
RECENT MARKET-LEADING RESEARCH PUBLICATIONS                                                                                                                                                                                                                                                                                                                               any way. Although high standards have been used in
                                                                                                                                                                                                                                                                                                                                                                          the preparation of the information, analysis, views and
                                                                                                                                                                                                                                                                                                                                                                          projections presented in this report, no responsibility or
                                                                                                                                                                                                                                                                                                                                                                          liability whatsoever can be accepted by Knight Frank LLP
                       2018
                                                                          Branded Residences Report 2019

                                                                                        1
                                                                                                                                 RESIDENTIAL RESEARCH

                                                                                                                                                                                                                                                                                                                                                                          for any loss or damage resultant from any use of, reliance
    Waterfront                                                                                             Branded
                                                                                                           Residences
                                                                                                                                                                                                                                                                                                                                                                          on or reference to the contents of this document. As a
     VIEW
                                                                                                           Report                                                               RIVERSIDE MARKET INSIGHT 2018
                                                                                                           2019

                                                                                                           Global Sales Focus
                                                                                                                                                                                SALES MARKET ANALYSIS

                                                                                                                                                                                Transaction levels for non new-build sales in
                                                                                                                                                                                the Riverside property market were 3% higher
                                                                                                                                                                                                                                      FIGURE 1
                                                                                                                                                                                                                                      Sales volumes (excludes new-build sales)
                                                                                                                                                                                                                                                                                                                                                                          general report, this material does not necessarily represent
                                                                                                                                                                                                                                                                                                                                                                          the view of Knight Frank LLP in relation to particular
                                                                                                                                                                                in the year to March 2018 than the previous           Figures relate to the schemes shown in figure 4, excluding Riverlight and Battersea Power Station
                                                                                                                                                                                12-month period. Indeed, trading volumes                            Battersea – Chelsea Bridge
                                                                                                                                                                                have continued to strengthen since 2015, as                         Chelsea – Lambeth Bridge
                                                                                                                                                                                                                                                    Wandsworth - Battersea Bridge
                                                                                                                                                                                figure 1 shows.                                                     Waterloo – Southwark Bridge
                                                                                                                                                                                                                                                    Hammersmith - Wandsworth Bridge
                                                                                                                                                                                Meanwhile, average prices for non new-build                           150
                                                                                                                                                                                property declined 2.3% in the year to March

                                                                                                                                                                                                                                                                                                                                                                          properties or projects. Reproduction of this report in whole
                                                                                                                                                                                2018, having declined by 13.6% since the last
                                                                                                                                                                                peak in September 2015.                                               120

                                                                                                                                                                                Demand continues to grow and 18% more
                                                                                                                                                                                prospective buyers registered in the year to
                                                                                                                                                                                                                                  Number of sales

                                                                                                                                                                                                                                                         90
                                                                                                                                                                                March 2018 than the preceding 12 months.

                                                                                                                                                                                                                                                                                                                                                                          or in part is not allowed without prior written approval of
                                                                                                                                                                                Viewings rose 11% over the same period and
                                                                                                                                                                                the number of offers made increased 53%.                                 60

                                                                                                                                                                                Matthew Smith, Riverside Office Head
                                                                                                                                                                                “Prices have edged down over the last year                               30
                                                                                                                                                                                but the extent of the declines has reduced

                                                                                                                                                                                                                                                                                                                                                                          Knight Frank LLP to the form and content within which it
                                                                                                                                                                                notably. This bottoming out process follows
                                                                                                                                                                                greater flexibility on the part of vendors, who                           0
                                                                                                                                                                                                                                                               2006        2007    2008   2009    2010   2011    2012      2013     2014        2015   2016        2017
                                                                                                                                                                                have become more accepting of asking
                                                                                                                                                                                                                                      Source: Knight Frank Research / LonRes
                                                                                                                                                                                price reductions following the introduction
                                                                                                                                                                                of higher rates of stamp duty. The 3%
                                                                                                                                                                                                                                      FIGURE 2                                                              FIGURE 3
                                                                                                                                                                                surcharge for second homes and landlords is
                                                                                                                                                                                                                                      Price growth (rebased to 100 at January 2005)                         Average and maximum pricing data

                                                                                                                                                                                                                                                                                                                                                                          appears. Knight Frank LLP is a limited liability partnership
                                                                                                                                                                                particularly prevalent along the River Thames.                                                                              Data relates to all sold properties in the Riverside
                                                                                                                                                                                                                                                    Riverside                                               area, excludes new-build sales
                                                                                                                                                                                “A pricing gap has inevitably opened up                             Prime central London
                                                                                                                                                                                                                                                                                                            Price
                                                                                                                                                                                between the newest and the established
                                                                                                                                                                                                                                             230
                                                                                                                                                                                developments along the river, which has led                                                                                     Average price     Max price
                                                                                                                                                                                                                                             210
                                                                                                                                                                                to a more binary choice for buyers.
                                                                                                                                                                                                                                                                                                            Year to March 2018     £1.06m               £16.5m

                                                                                                                                                                                                                                                                                                                                                                          registered in England with registered number OC305934.
                                                                                                                                                                                                                                             190
                                                                                                                                                                                “Following asking price reductions,
                                                                                                                                                                                                                                             170                                                            Year to March 2017      £1.18m                         £20m
                                                                                                                                                                                properties in more established schemes
                                                                                                                                                                                                                                             150
                                                                                                                                                                                can represent good value for money, which                                                                                   Year to March 2016     £915K               £15.5m
                                                                                                                                                                                                                                             130
                                                                                                                                                                                has led to relatively strong trading in some
                                                                                                                                                                                                                                                                                                            £PSF
                                                                                                                                                                                                                                             110
                                                                                                                                                                                instances.
                                                                                                                                                                                                                                                    90                                                          Average £PSF      Max £PSF

                                                                                                                                                                                                                                                                                                                                                                          Our registered office is 55 Baker Street, London, W1U 8AN,
                                                                                                                                                                                “Meanwhile, demand is also strong for
        12th EDITION                                                                                                                                                            the latest developments with state-of-the-
                                                                                                                                                                                                                                                    70                                                      Year to March 2018             £1,355         £2,850
                                                                                                                                                                                                                                                    50
                                                                                                                                                                                art amenities, for which buyers will pay a                                                                                  Year to March 2017                £1,475            £3,395
                                                                                                                                                                                                                                                      2005
                                                                                                                                                                                                                                                      2006
                                                                                                                                                                                                                                                      2007
                                                                                                                                                                                                                                                                    2008
                                                                                                                                                                                                                                                                    2009
                                                                                                                                                                                                                                                                    2010
                                                                                                                                                                                                                                                                                  2011
                                                                                                                                                                                                                                                                                  2012
                                                                                                                                                                                                                                                                                     2013
                                                                                                                                                                                                                                                                                     2014
                                                                                                                                                                                                                                                                                     2015
                                                                                                                                                                                                                                                                                                 2016
                                                                                                                                                                                                                                                                                                 2017
                                                                                                                                                                                                                                                                                                 2018

                                Cover: One Barangaroo, Crown Residences                                                                                                         premium. In both cases, buyers are heavily
                                                                                                                                                                                                                                                                                                            Year to March 2016                £1,315          £3,120
                                                                                                                                                                                scrutinizing the market and are driven by their
                                                                                                                                                                                perception of value.”                                 Source: Knight Frank Research                                         Source: Knight Frank Research / LonRes / Land Registry
                                                                                                                                   WEALTH TRENDS   PRIME PROPERTY   OUTLOOK

                                                                                                                                                                                                                                                                                                                                                                          where you may look at a list of members’ names.
                          1

UK Waterfront                 Global Branded                                                                                    Australian Prime                              London Riverside
View 2018 – 2018              Residences – 2019                                                                                 Residential Review                            Market Insight – 2018
                                                                                                                                – 2018

Knight Frank Research Reports are available at KnightFrank.com/Research
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