HAVE you ever looked at Canary Wharf’s riverside properties and wished you had bought one when Thatcher first hatched her plan to turn it into a business hub? Back when nobody realised how lucrative it would become?
Well David Cameron’s call for a British Silicon Valley stretching from Shoreditch to the Olympic Park could be the second chance you have been waiting for.
Cameron wants to take the cluster of creative and tech start-ups congregating around, the newly dubbed, “Silicon Roundabout” in Old Street and spread them east – a bold plan that has generated plenty of scepticism.
Reassuringly, Facebook and Google have already committed to the area, believing it will turn into a global centre of creativity and innovation. Facebook’s vice president Joanna Shields said: “It will give start ups and innovators in the UK a home to realise their ambitions as part of the London 2012 Olympics legacy.”
Firms such as Cisco, Intel and British Telecom have also hinted that they too might fill some of the empty office space out east.
But the question is: could you bring yourself to take the chance? At the moment the eastern quarter of the stretch over by Stratford and around the Olympic village is considered by many to be a bit of an industrial wasteland. There are limited local amenities and many of the new housing developments have not yet opened. Buying here is a bit of a gamble. But here are six reasons why it’s worth the risk.
BUSINESSES ALREADY INVESTED
The whole idea of the Silicon Roundabout sounds uninspiring, following as it does the Silicon Fen in Cambridgeshire or the Silicon Glen in Scotland. But it’s fair to say that Intel, Facebook and Google are pretty big names. A whole host of start-ups are already flourishing. So far the government’s specific involvement is a little unclear – perhaps it would be best just letting the area develop organically – but you can bet that they will tag on to this trend for one reason above all: the Olympic legacy. If Cameron and Nick Clegg decide that they can bathe in reflected East End techno-glory and claim that they were responsible for the area’s regeneration, then you can guarantee that any spare five-pence pieces that they can find down the back of the Treasury sofas will be directed there. Whatever they do, it’s sure to have some positive effect on the area’s prospects, and its prices.
AMBITIONS FOR REGENERATING THE AREA
When most people think of the Sydney Olympics in 2000 they think of the stadiums that were left empty and unused once the Olympics left town. When they think of Athens in 2004, they remember how shambolic it was. So understandably enough, the Olympic legacy is a matter of serious importance for the government. This means that improving the area will be high up the government’s agenda. Not to mention the fact that the London Olympic bid was won partly because the British organisers pledged to regenerate the area. Cameron reiterated this in his election manifesto, committing his party to the project and to more generally regenerating urban environments throughout the UK. He will no doubt have looked at the history of Canary Wharf, the improved property prices and the thousands of support jobs that were created in the deprived area surrounding it. He’ll be thinking that he can replicate this for the Olympic Park area. Savvy investors might be wise to invest in political paranoia.
Nobody wants to commute if they can help it, and much of East London is a short walk or cycle ride from an office in the Square Mile. For some City folk East London is still a relatively undiscovered part of town, so there is scope for development. Don’t forget City Airport either. London’s most civilised gateway is well connected to banking hotspots in Northern Europe and Switzerland, making it good for those whose work takes them there regularly -- also for those who decide that Geneva or Zug’s friendly tax laws appeal, but need to be in striking distance of the City. A number of hedge fund managers have already made the move and as the age of austerity continues more may follow. A swanky bolt-hole in East London could be a very appealing prospect indeed. And where bankers go, price-appreciation is sure to follow.
A decade ago Shoreditch and Hoxton became fashionable, with the opening of places like Lounge Lover, the Vibe Bar, Cargo, Cantaloupe, the Hoxton Pony and a whole host of others. These days the trendiest of the trendy might shake their heads at the influx of mainstream types and have packed up their record collections and ridden off on their fixed-gear vintage racing bicycles to pastures new (Stoke Newington, perhaps). But that just makes it all the riper for development, and all those bars, restaurants and clubs are more than willing to take the non-cool pound. The proximity of art galleries, most notably White Cube, also helps make the area a hub for culture as well as cocktails. When Crossrail opens the East and West Ends will be linked like never before.
CANARY WHARF’S STORY
In 1981 Margaret Thatcher announced that the London Dockland’s area around Canary Wharf would become a financial centre. Its aim was to regenerate eight square miles of docks that had been in decline since 1950. The property prices in and surrounding the area have rocketed in value. The graph (left) shows this and demonstrates how quickly the prices have recovered since the downturn. When Thatcher opened the premise she said: “ 10 years ago, it would not have been possible even to think in such bold, ambitious terms” – maybe in ten years, Cameron will say something similar about the British Silicon Valley.
THOSE ALREADY MOVING IN
With property investment, people moving into an area spells profit since shops and bars follow suit. Not to mention that it’s reassuring to know that your investment is not too far off the wall. As you can see from the graph (left) the numbers of people and prices are picking up after the recession. It seems that buyers have started to cotton on to the area’s commuter potential, at least. Housing developers are also interested too. The developers Ballymore are rumoured to have plans for Hercules Wharf.