Monday, 1 July 2013

Spotlight on Battersea

Breaking Dawn, Battersea undergoes a ground breaking face transplant

Over the years Battersea has emerged as one of the most sought after locations in London. Indeed, the streets of period terraces and redbrick mansion blocks to the west and south of Battersea Park have become home to prosperous young families, many exiles from Chelsea. Battersea Park – with its riverside promenade, rowing lake, art gallery, children’s zoo, as well as the abundance of good state primary schools and private prep schools – has made west of the park a top location for families. However, the area to the east known as Nine Elms – with Battersea Power Station as it’s not so shining beacon – has been an area to avoid until now. Once one of London’s industrial heartlands this mile long stretch of urban wasteland – along the southern bank of the Thames – is set to undergo a ‘face transplant’.

The new face of Nine Elms will come from St James’ Riverlight designed by Rogers Stirk Harbour & Partners, Ballymore’s Embassy Gardens, and Battersea Power Station owned by a consortium of S P Setia Berhad, Sime Darby & Employees Provident Fund. In addition, Lord Foster has master planned a mixed-use scheme at the New Covent Garden Market site, which will be relocated. Meanwhile, the 70s Market Tower office could be demolished and replaced by One Nine Elms, two skyscrapers linked by a 100 metre high sky bridge. The most significant development will be on U.S. soil, however. The new American Embassy is moving south and will occupy the site off Ponton Road.

East of the park is likely to be less family orientated than west of the park – but should have a real buzz about it – owing to the new attractions and things to do. “Initially tenants are likely to be young professionals or those looking for a convenient pied-a-terre taking studio, one or two bedroom properties but as the area develops I expect to see a much more varied profile of resident.”

To date, Battersea’s new developments have attracted a lot of interest, with a large proportion, 58 per cent according to Knight Frank, being international. In January Battersea Power Station became the fastest selling development on record when £600 million worth of property was sold in only four days. “Embassy Gardens has attracted strong interest from UK and international audiences, which is largely due to the popularity of the surrounding area amidst exciting plans to redevelop what is now described as ‘London’s third city’ ”, says Roger Black, Creative Director of Ballymore Group.

Kathryn McCombe, Sales and Marketing Director at St James, the developer behind Riverlight, adds: “The relocation of the American Embassy highlights the belief that Nine Elms will be a vibrant new district and prime location in London. With prices much lower than across the river and certainly around the Grosvenor Square embassy, many investors expect values to rise strongly as the district becomes established. This enthusiasm has been underlined by the strong sales to date.”

Charlie Walsh, Associate Director of International Residential at Savills, comments: “International sales have been strong, particularly with the Malaysian consortium behind Battersea Power Station driving sales from that part of the world. But – competition for new properties in Battersea is intensifying as the resurgent UK buy-to-let investor looks to jump in ahead of international buyers.”

Penthouse - Embassy Gardens
All of this should bode well for the market, so buyers will need to act fast. Jones Lang LaSalle has already commented that an excess of demand over supply will steadily build over the next few years leading to higher prices. They forecast price growth of eight per cent per annum by 2017.

While this competition is likely to inflate prices, a regeneration area the size of the one at Battersea and Nine Elms will give tenants plenty of choice. Drew Baxter, Associate Director at David Phillips, who will be supporting Ballymore at Embassy Gardens, comments: “Embassy Gardens should have absolutely no problem selling so our role will be directed towards the investors.

“Landlords will have to bear in mind the number of new properties coming to the area over the next few years, especially if they have a one bedroom apartment. Young professionals are the most mobile and will have a lot of choice so landlords will need to step up.”

That said, Riverlight is the primary river fronting scheme in Nine Elms so there are few options for riverside views. There’s also a residents’ clubhouse with a private cinema and swimming pool to keep tenants happy. And Embassy Gardens benefits from being a bit more family friendly. It’s comparatively lower rise, has more security features and includes a lot of amenities which will give more of a village feel about it.

“Maximising income is about attracting and keeping hold of your tenant without having to lower the rent. Creating the right finish will differentiate your property from others – making it stand out from the crowd. We try to tailor our designs to the development and the demographic of those likely to live there. We will try to make our clients’ properties as desirable as possible to live in so tenants don’t want to look elsewhere.

“We will look to cater for the young, affluent crowd that new developments are likely to attract. We also expect a lot of corporate lets to those working at the new American Embassy – so we will create homes that appeal to them. The show apartment at Ballymore’s Embassy Gardens has a Manhattan feel about it; this is something we would like to emulate.”

Competition between UK and overseas buyers for properties in Battersea will be fierce but investors will need to dress properties well to stand out from the crowd.

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