Simon Morris has learned that property development firm City Developments London (CDL) has recently bought a brewery in Richmond, which they’re now planning to turn into a lucrative London property development.
Moving away from the centre
The prime central London property market heated up in 2015. Figures from an analysis report from WA Ellis (a London estate agency) indicate that the average price prime central London property per square foot now sits at £1,832 – a 1.4% increase between the third quarter of 2014 and the third quarter of 2015. This contrasts with prime property sales levels in central London, which have decreased 14% year-on-year from the third quarter of 2014.
Rising prices are forcing property developers such as CDL that have traditionally favoured the central London market, to desert the district in favour of Greater London. CDL executive chairman Kwek Leng Beng recently said that “Greater London is a key focus for our UK real estate platform, which we established in 2013. Greater London is seen as an attractive alternative to central London as buyers have increasingly sought more value for their money.”
Leng Beng said this while talking about CDL’s latest property acquisition. The Straits Times reported that CDL recently bought the Stag Brewery freehold site from global brewer Ab InBev in Mortlake, south west London, for £158 million. CDL said that they will develop the site to provide extra residential accommodation, a new hotel and a new school for the borough.
The company noted that the freehold site, which spans 89,031 square feet has “tremendous potential.” They highlighted its proximity to Central London; it’s just 200 meters away from the rapid overland train link to central London’s mainline station, Waterloo. This suggests that the site could attract tenants because it would only take 25 minutes to reach central London from Mortlake by train.
In Simon Morris’ opinion, CDL might have made a good investment decision by buying a site to develop in Richmond, Greater London. Development activity has climbed so high in central London that firms such as CDL need new space to construct lucrative property projects. By choosing a site in Richmond the company has taken advantages of the area’s booming property market, whilst ensured that tenants are still within easy reach of the most important district in the UK’s capital city.