Monday 05 Jun 2023
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This article first appeared in City & Country, The Edge Malaysia Weekly on March 13, 2023 - March 19, 2023

The British Land Company plc is gearing up to launch The Founding, the first residential tower in its Canada Water Masterplan in southeast London. The 53-acre mixed-use rejuvenation project is jointly developed with AustralianSuper Pty Ltd, an Australia-based superannuation fund.

The £5.6 billion (RM30.2 billion) Canada Water Masterplan will offer components such as 3,000 new homes, one million sq ft of commercial development, two million sq ft of office space, and 12 acres of park and gardens.

According to British Land director and executive committee member Emma Cariaga, the master plan will be developed in five phases and take 10 to 12 years to complete. The site on which the project is being developed was used to ship timber back in the day, she says.

“Until the late 1960s, it was an active part of London that was used to import timber from North America and Scandinavia. It was known as the Docklands, where the ship berthed and unloaded the timber before this was sorted and then supplied to London’s construction sites. It was a very active industrial commercial location.

“And a bit further back than that, it was the place from which they set sail for the Americas in 1620. Today, there’s a very famous pub there called Mayflower Pub, which is often full of American tourists trying to retrace their ancestral lineage from when the maiden voyage happened in 1620.”

Cariaga: [The masterplan]will be developed in five phases and take 10 to 12 years to complete

British Land head of residential sales Simon Capp says the area’s history will be reflected in the interiors of the development, starting with the first phase. “The first phase of the master plan will comprise a mix of residential and commercial projects, including a new leisure centre.

“The choice of timbers and finishes in kitchens and bedrooms of the residential tower is based on an industrial and warehouse concept. For example, the colour of the tower’s exterior exudes an oxide reddish brown, which pays tribute to the existing heritage bridges in the area.”

The Founding

As the first residential tower in the master plan, The Founding will have 186 apartment units, with layouts ranging from studio to three-bedroom apartments and built-ups from 498 to 1,256 sq ft. The selling prices are from £696,500 (studio apartments) to more than £1 million (three-bedroom units).

“The Founding will be the epitome of urban luxury and its open-plan homes will allow residents to customise their homes to their liking. Full-height Crittall windows will not only enable residents to enjoy views of London, but also fill the homes with natural light,” says Capp.

Except for the studio apartments, the other units will come with a private balcony and the developer will provide European oak-engineered timber flooring for the living room, dining area and kitchen. The bedrooms will be fitted out with 100% wool carpets with textile backing.

An oak veneer door will serve as the main door for all units. The kitchen will be equipped with a dishwasher, hob and extractor, microwave, refrigerator, freezer, washer and dryer. The master bedroom will come with a full-height wardrobe.

Capp: The first phase of [the Canada Water Masterplan] will comprise a mix of residential and commercial projects, including a new leisure centre (Photo by British Land)
Dixon: The significant growth in the property market shows that huge demand is returning to London and it’s something that we’re expecting to continue over the next five years (Photo by JLL Ltd)

The tower will have three terraces, offering views of either the sunrise, the sunset or the London skyline. At the mezzanine level, there will be a banquet seating area with artwork and a kitchenette, which provides a place for residents to work, relax and socialise.

On the ground level, there will be a 24-hour concierge service as well as small shops, delicatessens, bars and restaurants that have been curated. Cariaga says the retail component will be a collection of like-minded brands catering to residents of and visitors to Canada Water. The Founding is expected to be completed by 3Q2024 or 4Q2024.

Strategic location

The Founding is strategically positioned in terms of access to the Canada Water tube station, says Capp. “The lobby is literally just opposite the entrance of the Canada Water tube. It is also less than a minute’s walk to the new high street in Southwark. So, the development will be a major infrastructural improvement for the area.”

Cariaga says Canada Water is also well positioned in terms of connectivity with central London’s public transport. “The development sits at the junction of two major tube lines,” she points out.

“There’s the Jubilee line, which runs east-west across London and gets you to places like London Bridge and Bond Street really quickly, as well as Canary Wharf, which is a big financial centre just to the east of Canada Water. Then, there’s the London Overground line that runs north-south, which connects Canada Water with the City of London, Liverpool Street and major office areas.”

Amenities nearby include restaurants, supermarkets, banks and cafés. The London City Airport is only a 30-minute drive or 22 minutes by public transport (Jubilee line).

The area, which will be home to The Engineering and Design Institute (TEDI), is in close proximity to the city’s top educational institutions, including the London School of Economics, Imperial College and University College London, all within a 30-minute drive.

Weyer: We are expecting the central London market, where Canada Water is located, to perform well in terms of take-up and occupancy (Photo by JLL Ltd)
Chong: When it comes to buying a property in London, locations with convenient access to public transport are notably more desirable as it is a walkable city (Photo by Shahrill Basri/The Edge)

There will also be the Canada Water Dock, located opposite The Founding, which will feature a 170m boardwalk. It will be made with timber fins, paying tribute to the timber structures that existed back in the day. Capp says the boardwalk will increase footfall in the area and allow people to enjoy views across the water.

Green, open spaces and regeneration efforts

The Canada Water Masterplan’s concept is influenced by the events that took place during and after the Covid-19 pandemic, says Capp. “Post-Covid-19, city living needs more green spaces. To cater to that, we’ve got fantastic open spaces all around the master plan. There are also existing green spaces that border our site.

“Within the site, we have pledged to enhance biodiversity and introduce a lot of new plants that will thrive in the area. Especially after Covid, we’re aware of demands such as people working from home and for outdoor spaces in the area they live. We will continue to incorporate these factors into The Founding as well as the other developments within the master plan.”

The developer also plans to rejuvenate the dock, which Cariaga says will improve its existing wildlife habitat and increase the amount of biodiversity in that particular stretch of water. “Canada Water is already an established community and destination for London. The term ‘regeneration’ implies that there is not much there, but it’s quite the contrary. It is a mature neighbourhood and we’re just stitching into what’s already there.”

In Phase 1 of the Canada Water Masterplan, British Land is looking to repurpose Harmsworth Quays, a former printing press building that was previously owned by the Daily Mail and General Trust group until 2012, says Cariaga. “To this day, there are a few original printing presses in the building, which we’re going to repurpose together with the fabrication of the building.

“Culture is what attracts people to cities and we want to make sure that our development has a cultural offering at the heart of this new district. The former printing press will be converted into a venue for music, performances, events and conferences, among others.”

Another ongoing commercial project in Phase 1 is the Dockshed, which will comprise a mix of modern warehouse-style office spaces and shops, to cater for eateries as well as leisure-centric businesses, across 182,000 sq ft.

Meanwhile, Cariaga explains that the developer has secured a flexible planning framework that allows it the freedom to change the master plan, subject to approval, depending on how the market evolves over the 10- to 12-year period.

Outlook for London property market

Registration of interest is already open and The Founding has seen a mixed demographic of interested buyers, comprising Londoners as well as those from Asia-Pacific — including Malaysia, Singapore and Hong Kong — the Middle East and Europe, says Capp. He adds that many of them have connections with London, such as through family, work or education.

Rents at The Founding are expected to range from £1,900 to £2,000 for studio apartments, £2,200 to £3,050 for one-bedroom units, £2,995 to £4,000 for two-bedroom units, and £4,500 to £5,000 for three-bedroom units, says Marcus Dixon, director of UK residential research at JLL Ltd. He adds that the development has an average yield of 3.25% based on the asking prices.

Dixon anticipates a wave of foreign buyers due to the recent reopening of borders. Applications to universities in London have also gone up over the past year, he says. “The ties between overseas high-net-worth individuals and the educational sector in the UK is really important for the property market if we are to look at it from a micro perspective.”

In terms of capital appreciation, Dixon says the average price of residential properties in southeast London has risen 52% in the last 10 years, with prices 143% higher than they were 20 years ago. 

“Looking at specific schemes, the most recent sales (as at November 2022) at Ontario Point achieved 71% more than when the property was first sold almost 10 years earlier (March 2013). The most recent sale in the Bermondsey Spa scheme shows prices achieved in October 2022 were 87% higher than when the property was first sold in November 2010.”

The Founding will boast ample open areas (Photo by British Land)
Green spaces, as well as open-plan layouts for the units (Photo by British Land)

According to Dixon, the overall property market in Greater London has seen a price growth of about 6% to 7% over the past year.  Additionally, the annual growth in transacted rents for the overall property market in Greater London is about 15% as of December 2022.

“The usual growth is 2% to 3%, compared with the big jump last year. The significant growth shows that huge demand is returning to London and it’s something that we’re expecting to continue over the next five years. The strong demand for rental property works as an extra layer of reassurance for international investors,” he says. 

Meanwhile, JLL’s surveyor of new homes Martin Weyer is expecting house price growth in central London to be about 19% over the next five years, whereas in the suburbs, it is somewhere around 10%. “We are expecting the central London market, where Canada Water is located, to perform well in terms of take-up and occupancy,” he says.

Chong Shu Ling, head of sales at JLL Property Services (Malaysia) Sdn Bhd’s global residential agency, says Malaysian homebuyers looking to invest in the UK should consider three important factors — budget, location and taxes.

“London is divided into nine zones, but the nearest to central London are zones one to six. When it comes to buying a property, locations with convenient access to public transport are notably more desirable as London is a walkable city,” she says.

Chong notes that the price of properties in London can range from £500 to £10,000 psf, depending on the area and development. “Hence, it is essential to consider your budget before selecting a location.” 

As for taxes, there are different tax implications for properties bought under an individual’s name compared with those purchased using a company’s name. Thus, it is essential to seek professional guidance before buying an overseas property, she advises.

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