Canary Wharf, the heart of London’s Docklands, is shaking off the economic woes of the past five years and looking to the future with a wave of new luxury developments.
The business district, created in the 1980s and 1990s when land freed up by the closure of the West India Docks was redeveloped, has come a long way since the first tower blocks were completed in 1991.
The working population at Canary Wharf passed 100,000 for the first time in 2012, with the area now accommodating more bankers than the City of London. It has also become a thriving retail district with more than 240 shops, cafés, bars and restaurants.
And while transport used to be a problem in the early days of Canary Wharf, today’s residents are comparatively spoiled for choice. It is now served by the Docklands Light Railway, the Jubilee Underground line, the nearby City airport, and the Thames Clipper “river bus” service.
A further improvement will come with the Crossrail link in 2017/18, which will join Canary Wharf to the west of London, with a fast connection to Heathrow airport.
The attractions of the area have been spotted by developers and, following a dearth of activity since the credit crunch, many are now springing into action. There are as many as 12 schemes planned to the north and east of the original estate, spreading across the water to the area surrounding South Quay and Marsh Wall.
“We currently have planning permission to approximately double the working population by 2025, with major new developments at Heron Quays West, North Quay, Newfoundland, Riverside South and Wood Wharf,” says Hamish McDougall of Canary Wharf Group, the company that owns the majority of the estate.
One of the biggest residential schemes will be Wood Wharf, an area to the east of the financial centre, which is expected to contain as many as 1,500 homes. The project is being led by architect Sir Terry Farrell.
A smaller scheme across the river from Wood Wharf is Dollar Bay by developer Londonewcastle, which received planning permission in March. Situated on West India Docks, Dollar Bay will consist of 31 storeys and 120 high-end apartments.
James Shindler of Londonewcastle believes Canary Wharf will mature as a residential location over the next five years on the back of new developments and the Crossrail link. As a result, he says prices for high-end properties will rise from an average of £600 to £800 per sq ft today to as much as £1,000. “Canary Wharf is increasingly being viewed as a ‘prime’ area, it’s no longer a ‘fringe’ location.”
Andrew Groocock, head of sales at Knight Frank’s Canary Wharf office, is similarly positive. “It is becoming less weighted towards a rental market as people are realising the benefits of Canary Wharf, such as the ability to get a two-bed apartment with a river view in a good development with good facilities for less than £600,000 and still have fantastic access to the City and central London,” he says.
But the past five years have been anything but plain sailing. After peaking in 2008, prices in Canary Wharf fell by as much as 30 per cent in some developments. Those who bought properties off-plan before the credit crunch were particularly hit by the sharp fall in values. One luxury development, Pan Peninsula, which launched before the downturn, had many buyers nursing painful losses.
“There is still some negativity around Canary Wharf as a lot of investors did get their fingers burnt,” admits Groocock.
“Canary Wharf went into the downturn with a bigger overhang of stock than other locations and felt the full impact of the financial crisis, with values suppressed by weak City sentiment post-downturn,” adds Lucian Cook, director of Savills research.
He notes that the area’s mix of stock, which is very heavy in one- and two-bedroom flats, has meant a greater reliance on one buyer type and therefore has not attracted the equity-rich family buyers who have boosted other local markets. However, as the oversupply of property has disappeared, agents believe the area will start to recover its growth, particularly due to interest over Crossrail.
On the market now is No 1 West India Quay for £1.2m, marketed by Savills. The three-bedroom apartment comes with three bathrooms and comprises 1,792 sq ft.
Nearby Wapping is also seeing new construction activity, with the redevelopment of the News International site by Berkeley Homes and the Tower View development by Hadley Homes.
Joanna Beale of Knight Frank’s Wapping office says: “The area is much more in the spotlight now. St Katharine Docks is much more of a destination venue than it used to be, One Tower Bridge is raising our profile and a few other new-build developments have shaken up the market with some fresh properties for the first time in a decade.”
Cluttons is marketing New Crane Wharf, a two-bedroom penthouse apartment in a warehouse conversion for £2.25m. It maintains its original warehouse features, such as timbers and beams and exposed brickwork.
Meanwhile, Savills has a four-bedroom duplex penthouse apartment in St Katharine Docks. The £4.9m property occupies the sixth and seventh floor with seven terraces that have views across the City.
James Hyman, partner for residential sales at Cluttons, says Wapping is one of London’s most undervalued postcodes at around £650 per sq foot for non-riverside properties and £950 per sq ft for river-fronted.
However, both Canary Wharf and its neighbour Wapping won’t be to everyone’s taste. Families largely avoid the areas due to a lack of family-sized homes with gardens, while for many, the new-build “soulless” nature of the Docklands will fail to appeal.
● Crime levels in E14 are designated high by Tower Hamlets police
● House prices have risen 12 per cent over the past three years
● Just under half of all buyers work in the financial and business services sector
● Families are a minority, comprising less than 10 per cent of buyers
● Younger purchasers are the most prevalent
What you can buy for …
£500,000 A small two-bedroom apartment
£1m A two-bedroom penthouse apartment with riverside view