A new report from global real estate firm JLL has claimed that 2021 will be the year when the mammoth new Nine Elms Battersea neighbourhood will start to flourish.
The regeneration area on the banks of the Thames, one of the largest ongoing projects in Europe, is aiming to turn a previously industrial area into a residential, business, leisure and entertainment district to rival the best of London.
JLL’s prediction is rooted in the opening of Battersea Power Station, the Northern Line extension and the occupation of around 500,000 sq ft of office space by tech giant Apple, all of which are set to happen before the end of next year.
The company says it is these ‘tentpole moments in the area’s development’ which leads it to predict that the five-year sales and rentals forecast will be 19% and 18% respectively.
Other key stats and findings from the report included the fact that 4,996 private new-build units have been completed over the last five years, with a further 4,810 units under construction. The resales market, meanwhile, has become more and more active, now that the number of completed units has increased.
It’s an area that has become especially popular among millennial young professionals, with Nine Elms and Vauxhall having a far higher proportion of 25-34 year olds compared with London as a whole.
The report also revealed that, with around 7,000 new homes likely to be completed in the next five years, the population of Nine Elms and Vauxhall is expected to rise by more than 10,000 – a 30% increase.
What does the area offer?
A Zone 1 neighbourhood that is bigger in size than Hyde Park, the Vauxhall Nine Elms Battersea area has seen nearly 5,000 residential units completed over the past five years as well as retail, leisure and office space.
Plenty of residential developments are still to come – some underway, some still in the planning pipeline – but its flagship projects are inarguably Battersea Power Station and the Northern Line extension, which are both set to open in the second half of 2021 after a long and troubled journey to completion.
The tube extension is expected to make the neighbourhood more accessible, paving the way for further development and expansion. Currently, Vauxhall station is the only major transport hub in the area and getting to Battersea Power Station and the Nine Elms neighbourhood can prove tricky.
The Power Station is set to deliver around 250 very high-end, exclusive new homes, and will also become Central London’s third largest shopping destination.
A big win for the Power Station was the decision by tech behemoth Apple to occupy around 500,000 sq ft of office space, which it will do so from 2021.
Most of the regeneration and redevelopment is focused on Nine Elms, as massive brownfield sites are transformed into new residential and business buildings, but the Vauxhall and Albert Embankment neighbourhoods are also being transformed and enhanced as well.
“The Vauxhall Nine Elms Battersea neighbourhood is now approaching critical mass,” the JLL report says. “The area has already become more vibrant but the key events of the opening of the Northern Line Extension stations and the Power Station building, which will include retail, leisure and Apple occupying office space, will be defining moments for the area.”
It says these will help to fill the restaurants and bars, creating a far greater footfall which, in turn, ‘will make the whole area a more appealing place to live’.
“We therefore expect demand in both the sales and lettings markets to increase notably over the next five years,” the report added. “The improved connectivity will provide a step-change for rental demand when it becomes operational.”
JLL says the outlook for prices and rents remain dependent on the progress of Brexit, trade discussions and the UK economy, but the firm still expects price and rental growth to accelerate over the next five years, with particular boosts around 2021 when the key openings occur.
What does the new-build market look like?
The area is like one big building site at present, as numerous developments pop up at the same time to sit alongside existing buildings. Cranes dominate the skyline and the din of construction noise is ever-present, with the majority of new units found in Nine Elms. That said, there are also a number of new schemes found along the Albert Embankment and in Vauxhall.
The rejuvenation and revitalisation of the area – which has included the arrival of the state-of-the-art US Embassy, as well as Embassy Gardens, the DAMAC Tower, Graphite Square and The Dumont – is set to continue with 8,105 units in the development pipeline. Included in these are plans for around 900 private units in ‘the hitherto undeveloped’ Oval area.
The homes on offer range from studio apartments to prestigious riverside penthouses, with the abundance of new developments leading to a very active new-build sales market.
“Buyer demand continues to be strong with many taking a long-term view of the area as well as enjoying the steady improvement in the environment and amenities,” the report says. “Pricing can vary widely in the area. It is generally highest along the Albert Embankment, typically ranging from £1,300 to £1,800 per square ft.”
“It is a little lower, on average, in Nine Elms and Vauxhall, typically in the £1,000 to £1,600 and £1,100-£1,600 per square ft ranges respectively. Importantly, pricing can vary within areas, and even within buildings, especially given that aspect can be as diverse as a high-rise apartment with fantastic views along the Thames to poorer locations overlooking train tracks or main roads.”
The various developments – which include Build to Rent projects, homes for sale and rent, and office buildings – are being developed by a wide range of firms, including Bellway, Alchemi Group, EcoWorld Ballymore, St James and Kent County Council, as well as a tie up between Royal Mail, Telford and Greystar.
Who lives there?
The area, which has the Thames Path running through it and is also set to have a sustainable Linear Park running through its length once complete, has clearly attracted the attention of London’s Generation Yers.
Some 57% of households are characterised as young professional, notably higher than the London average, with a far bigger number of 25-34 year olds in Nine Elms and Vauxhall compared with London as a whole, and a notably lower proportion of people aged 34 and above.
This is reflected in cafes, bars and restaurants with a hipster vibe, as well as a local spa, cycle-bar and 8,000 sq ft art gallery. It’s also clearly aimed at people with wealth to spare and those who are willing to rent, with a higher proportion of households earning less than £40,000 pa and a higher proportion of private renters compared with Greater London.
Some of the biggest criticisms of the area have been its unaffordability, its soullessness and its very corporate, business-like feel. Despite the heavy presence of millennials, there isn’t currently that much to draw people to the area in terms of things to do – although the opening of Battersea Power Station should help to change that.
Transport links will also be drastically improved when the Nine Elms and Battersea Power Station stops appear on the Tube map, making journeys into Central London and further afield much easier.
The area is also not short on nearby local landmarks, with The Kia Oval, Tate Britain, Sloane Square and the Houses of Parliament all relatively close by.
But the criticisms over its lack of character, its overabundance of identikit high-rise towers and its appeal only to one kind of demographic is likely to continue, even if the area has plenty to recommend it.
The JLL report clearly highlights a thriving sales and rental market and an exciting future for a previously neglected and unloved area, so the Vauxhall Nine Elms Battersea neighbourhood is one that investors should definitely keep a close eye on moving forward.
We previously explored the Nine Elms area as part of our 10-part London regeneration series last year.
You can see the full JLL report here.