Historically, it has been outpaced by other parts of the city, but as new development and regeneration work has gained momentum, the Southeast Quarter has grown into the UK capital’s best property investment destination.
The area is seeing significant investment from government bodies and property developers and has excellent transport times into Central London, as well as new infrastructure – including Crossrail – linking together a multitude of towns built on strong community foundations.
However, average property values remain low enough for both new investors looking for easy entry points and seasoned investors wanting to spread their capital across a diversified portfolio.
Here we take a closer look at some of the key reasons we believe property investors should be keeping a close eye on southeast London.
LONDON LIVES HERE
One of the most notable aspects of southeast London is that it’s a place where the real London lives - by and large, it’s not a tourist destination. Greenwich is of course the exception, with its rich history dramatically on display in its museums, universities and in its town. In the southeast of London, communities are built, artists gather, students learn and families grow.
Southeast London offers quick journey times into the city. For example, Deptford with only one stop to London Bridges takes a mere six minutes, Greenwich only eight. It’s an ideal location for city workers who like short commutes, a vibrant community life and green spaces near the river Thames.
THE CURRENT 23-MINUTE DLR RIDE FROM WOOLWICH TO CANARY WHARF WILL BE CUT DRAMATICALLY TO ONLY 8 MINUTES WHEN CROSSRAIL OPENS IN 2018
Woolwich, further east, will benefit from Crossrail when the city-spanning service opens in 2018. The current 23 minute DLR ride to Canary Wharf will be cut dramatically to only eight minutes and residents will be able to speed their way to Heathrow Airport in just over three quarters of an hour.
The rest of the Borough of Lewisham is well connected – trains from Lewisham station to London Bridge take a mere eight minutes; King’s Cross is only half an hour away and Canary Wharf is under 20 minutes. Services here are set to further improve after local authorities secured GBP3.8million in funding for the local transport network in early 2013.
Further south into Bromley, services are equally as good with journeys into central London taking no more than half an hour. From Croydon, trains reach London Bridge and London Victoria in a surprisingly low 14 and 18 minutes respectively. The area also benefits from close access to the M25, which runs across the south of both boroughs, and direct trains into Gatwick Airport take just 23 minutes. Gatwick Airport itself is undergoing its own expansion plans, with new routes being opened to international and national destinations.
And it’s not just the train times that are surprising. The choice of travel is too. For those who enjoy a more leisurely, refined pace of life, the Thames Clippers ferry service runs through central London along the river. Returning from a day at work in the City of London to Greenwich takes only 19 minutes – time enough for a quick gin and tonic from the ferry’s onboard bar. Residents in Deptford and Woolwich can also enjoy the Thames Clippers for their daily commute.
Greenwich Peninsula is one of London’s biggest regeneration projects. Building up around the iconic O2 Arena, the area will become a major employment and entertainment hub as three million square feet of office space and 24,000 new jobs are created under the scheme, providing a huge boost to the local renter and buyer demographic.
In Woolwich, new transport improvements are underway courtesy of the DLR extension and the construction of Crossrail. The Royal Arsenal will see a number of homes built at the site of the new Crossrail station, alongside a bustling commercial area and a heritage quarter that will boast two museums, a number of listed buildings and a riverside walk linked to the Thames Path.
Nearer to the more traditionally popular Greenwich Village, work is taking place around the riverside, particularly Deptford Creek, creating culture and leisure hubs along the waterfront, including space for artists’ workshops, design studios, galleries, cafes, bars and restaurants.
DEPTFORD’S MODERN ART HISTORY AND STRONG LOCAL CREATIVE COMMUNITY ARE TRANSFORMING THIS ONCE DILAPIDATED AREA INTO A NEW SHOREDITCH
Such culturally driven development is seen to an even greater extent in Deptford itself, where the town’s modern art history and strong local creative community are transforming this once dilapidated area into a new Shoreditch and attracting increased attention from the city’s professional classes. This in turn is attracting development investment, with several regeneration projects lined up in the area, including a new riverside plaza and a highly community-focused revitalisation of the site around Deptford station.
Deptford High Street has seen recent improvements, largely centred around the popular Deptford Market, and this focus on public area uplift is reflected further south in Lewisham town centre, which is being overhauled and rebranded as the Lewisham Gateway.
The area around Lewisham station is also a focus, with projects in progress that will bring new commercial space and community facilities to the town, while the wider borough has placed a particular emphasis on educational improvements in recent years, with local authorities renovating eight local schools since 2011.
Bromley and Croydon will also see new homes, jobs and community features, with Bromley in particular identified by authorities as one of London’s regeneration zones. Work at Crystal Palace will be another of London’s major revitalisation projects, making significant improvements to local parkland to create new leisure, sports and cultural amenities.
The GBP5.2 million improvement scheme at Bromley North Village is intended to encourage new business investment in the area, while the main high street of Bromley town centre is undergoing a retail-led expansion under the Churchill Place project. Another development at Bromley South Central will soon bring even more improvements, including a hotel, café and restaurant space as well as a new cinema and parking facilities.
Town centre improvements are also afoot in Croydon, where work is centred around the new Westfield shopping centre and a range of associated leisure facilities. This GBP1 billion project will be completed in 2017 and will bring 5,000 new jobs to Croydon.
Going beyond this, local authorities have drawn up a long-term regeneration programme known as Croydon Vision 2020. This includes master plans for work to go ahead in East Croydon, West Croydon, Mid Croydon, College Green and Old Town, and private developers have already committed GBP3.5 million to projects within this framework.
The Southeast Quarter, on the wave of London’s regeneration, provides excellent value to property investors compared to more traditional, central locations.
Prices within London’s more popular areas have risen rapidly in recent years. GBP1,500 per square foot is now typical in areas such as Islington, Old Street and Shoreditch, while in prime areas such as Kensington and Chelsea prices above GBP2,000 per square foot are far from uncommon.
In contrast, off-plan developments around central Greenwich average at just GBP640 per square foot. Prices decrease towards Woolwich in the east of the borough, where the average apartment price is around just GBP366 per square foot, although this represents a 12% increase over the past year.
Average prices for recent projects in Lewisham are around GBP450 per square foot. Prices tend to be lower in the south of the borough and higher in the north, especially around the river and Lewisham station, although there is a notable pocket of value around Deptford where average prices are lower despite how close the town is to central London and the Thames.
AVERAGE PRICES FOR RECENT PROJECTS AROUND CROYDON TOWN CENTRE ARE AROUND JUST GBP450 PER SQUARE FOOT
Around Bellingham and Southend Village in Bromley, average off-plan asking prices are as low as GBP354 per square foot, although this is rising in the face of very limited supply. With regeneration on a huge scale on its way in the area, Croydon too offers great value, with average prices for recent projects around Croydon town centre at approximately GBP450 per square foot.
IP GLOBAL IN THE SOUTHEAST
We believe that the investment case for Southeast London is exceptionally strong, which is why our investors have been quick to purchase some of IP Global’s latest developments in the area, including Hilton’s Wharf in Greenwich and Altus in Bromley.
These have been hugely successful – Hilton’s Wharf sold out within three weeks of launch – as more investors recognise the potential that London’s southeast has to offer. The regeneration work, the journey times into central London and beyond, and the vibrancy and community focus of these towns combine to deliver investment drivers that we believe will support strong growth.
THERE ARE FEW OTHER PLACES IN LONDON LIKE DEPTFORD, FROM WHERE YOU CAN REACH CENTRAL AREAS WITHIN SIX MINUTES BUT STILL FIND NEW-BUILD DEVELOPMENTS AT AS LITTLE AS GBP610 PER SQUARE FOOT
There are few other places in London like Deptford, from where you can reach central areas within six minutes but still find new-build developments at as little as GBP610 per square foot. Westminster, which is five minutes northwest of London Bridge, averages over GBP2,000 per square foot, while Old Street to the north has developments selling at over GBP1,300 per square foot.
Because of this, we’re continuing to focus our resources on identifying other opportunities in London’s Southeast Quarter, so expect to hear more from us over the coming months.