I AM lucky enough to have spent the last decade immersed in the east of London. Home of the 2012 Olympics, this is the area I believe will be the next addition to London’s core market, bringing huge opportunities for investors.
Will London succeed where (some) others have failed, by delivering an Olympic Games where the host city is the real winner? My short answer is yes. London’s bid concentrated on learning the lessons from previous host cities to create a real legacy.
The immediate Olympic site and its surrounding area has already attracted private capital. £2bn has been invested in the last two years alone, representing commitments to deliver more than 6,000 homes and 5 million square feet of commercial space.
Westfield has constructed Europe’s largest indoor shopping mall, which remarkably opened 95 per cent full in the eye of the downturn in September 2011. The centre has had a strong influence in changing the area’s prospects and Westfield’s investment has already been vindicated – Dutch pension fund APG and the Canadian Pension Plan Investment Board bought a 50 per cent stake in Stratford City for £870m in late 2011.
In addition, the Athletes Village is a major opportunity for investors seeking residential opportunities in London’s supply-starved market. The private element was built on time and on budget and pre-sold to property investor Delancy and Qatari Diar, the property investment arm of the Qatar government. Costing over £550m, this was the UK’s largest private rented sector deal. Post-Games, the site will accommodate over 4,000 inhabitants.
Other component parts of the Olympics infrastructure provide clear opportunities for East London and further investment post-Games. This includes the 1 million square feet Press and Broadcast Centre. Preferred bidder, iCITY, aims to transform the centre into a technology, design and research hub with the potential to create over 4,000 jobs.
Creating a destination like the Olympic Park is incredibly important for the legacy of the Games and Stratford’s ability to draw in investors after the athletes leave. London 2012 is unique, in that creating a legacy and an attractive investment proposition was an intrinsic part of the bid. The above developments mean that 10,000 people are already working in the Olympic Park, and another 10,000 jobs will be created over the coming years.
How will history judge the London 2012 Games? The post-Games regeneration vision of building a thriving commercial hub in Stratford has remained steady over time. Stratford now represents a credible alternative location for occupiers and investors to London’s more established markets. The fact that the majority of the large assets have been funded, or acquired, by international capital is a major endorsement of how London has seized the opportunity created by the event.
Matthew Black is head of East London at CBRE. He has been involved with the Olympic Park since its inception, is an adviser to the London Development Agency, and now advises the Olympic Park Legacy Company.