Real Estate Investor Magazine South Africa June 2013 | Page 58

LONDON

BY MIKE SMUTS

New Crossrail project creating property hotspots

L

ondon, which holds the status of “the
world’s most important city”, has always
been a place of change and reinvention.
As its population has grown, the city has
undergone a relentless process of change to keep
up, not least in its transport system. Ten million
people a day rely on it to get to schools and
offices; to do business and enjoy their leisure. If
transport fails, the city cannot operate properly.
Crossrail, the east-west rail link through
London, and Europe’s largest infrastructure
project, will not only revolutionise travel across
London and the South-East, but also have a
dramatic effect on residential property prices
along its route. According to n ew research
released by Jones Lang LaSalle, Crossrail is set
to cause more property ripples, and have a bigger
impact on London, than even the latest Tube
extensions to the Jubilee and East London lines.
Transport-led regeneration is the single
most important factor in boosting the value
of London homes. Unlike South Africa, car
ownership in London is a luxury for most and
the vast majority of Londoners rely on the
public transport system to get around. Because
of this, people have a tendency to congregate
around areas with good transport links and are
often willing to pay a premium to be within
walking distance from a station.
Propert y investors who want to ensure
that their London propert y appeals to a
large market of potential tenants, while also
benefiting from good capital growth, would
be well-advised to invest in an area with good
public transport.
In key places along the route, prices are likely
to outperform the rest of London and rise by
up to 44 per cent between now and when trains
start running in 2018.
Such trends have been evident in the past residential prices in Canary Wharf and Tower
Hamlets around the time of the Jubilee line
extension in 1999 rose by more than 60% in

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June 2013 SA Real Estate Investor

the four years running up to the opening of
the extension.
While neighbourhoods around the five new
central London stations may see the greatest
price lift, outer London locations and homes
in Berkshire and Essex will benefit too. Ealing
in the west and Woolwich in the east are
also tipped for strong growth — as is Canary
Wharf, which for the first time will have a
direct link to Heathrow.

“Neighbourhoods around
the five new central London
stations may see the greatest
price lift.”
The cross-London railway will make a
significant contribution to the transport needs
and economic development of London and the
South East region. This 37-station stretch of
railway will seamlessly join up west and east
London and have a profound impact on London
by bringing an extra 1.5 million people within
45 minutes’ commuting distance of London’s key
business districts.
Travellers will be able to travel direct from
Padding ton to Canar y W harf, through
stations at Bond Street, Tottenham Court
Road, Farringdon and Liverpool Street, in just
16 minutes.
Busy stations like Bond Street will see an
estimated 40% increase in the number of people
passing through – rising from 155,000 to
220,000 a day.
This will have a direct impact on the capital’s
economy, enabling employers to draw from a
deeper pool of talent.
The Mayor of London, Boris Johnson,
said: “Crossrail is vital to support London’s
growing population and to ensure our city’s
future economic prosperity in an increasingly

competitive world. These latest f igures
demonstrate the impact of this ambitious project
is already taking hold, creating jobs and sparking
regeneration across the capital. This is good
news not just for Londoners but for the nation’s
economic health as a whole.”
Progress on the Crossrail project is steaming
ahead with a new Network Rail Director
already appointed and over 9km of tunnels
now excavated for the capital ’s f lagship
transport scheme. But maybe even more
exciting are the discussions already underway
for a second Crossrail project, connecting the
congested southwest of London to the more
deprived northeast.
A London First taskforce, chaired by former
transport secretary Lord Adonis, recently put
forward a Crossrail 2 proposal. Initial costs are
estimated at £12bn and the line could be open
by the early 2030s. The two main route options
for Crossrail 2 are a major suburban and regional
line running under Central London via a new
tunnel connecting Wimbledon to Tottenham,
or a shorter automatic tube line contained
within the urban area, but either would provide
much-needed relief to London’s south-western
commuter congestion.
London is facing extraordinary growth, with
its population set to increase by around a million
over the next decade and another million by the
2030s – all of which will put added pressure on
the city’s public transport system. Crossrail will
therefore become even more important, both in
terms of getting people quickly and safely from
A to B, but also in the regeneration opportunities
brought by the new railway and new stations.
Crossrail will support the delivery of over 57,000
new homes and 3.25 million square metres of
commercial space along with significant public
realm improvements, which will leave a lasting
legacy for London.

RESOURCES

Smuts & Taylor

www.reimag.co.za