I’m not quite sure what the average age of Spectator readers is, but for many a pink floating pig is their abiding memory of Battersea Power Station. Since 1983, when it stopped producing energy, there have been many unfulfilled promises and dreams for the building. I went inside it back then and it was immense. So vast and bleak was the space that the majority of Londoners simply couldn’t envisage anything happening there. 30 years of will it, won’t it, were brought to an end ten years ago when current shareholders SP Setia, Sime Darby Property and the Employers Provident Fund acquired it and started to make good on their vision.
Recent headlines about the opening of two new underground stations, extensions of the Northern Line, modestly ignore the fact that this was one of the biggest local infrastructure investments in history. It’s also easy to underplay the importance of the stations to an area that has, certainly for my 40 years in the business, always suffered from the label of being too badly connected to be worth buying in. Now that major block to investment in the area has been removed, it’s high time prospective buyers reappraised Battersea.
Fears that Battersea’s new developments were being cherry picked by overseas buyers and that it would be a ghost town – like much of Chelsea has become – have largely proved to be unfounded.
Despite the 60/70 per cent initial overseas buyer ratios these properties have been rented out to residents. Buyer numbers are now nearer 50/50 domestic/international and local appeal appears to be improving, helped by competitive pricing and ongoing cheap money.
And let’s not forget that it’s home to the third largest shopping centre in London. The socioeconomic status of residents along with a powerful combination of tube connections and riverside views seems to have assured the area’s long term destination credentials, especially as it’s only a short walk from an increasingly formulaic Kings Road which is swiftly starting to resemble an upmarket version of Festival Place in Basingstoke.
One thing Battersea Power Station doesn’t seem to have done is lift the value of the rest of Nine Elms, whose property market is still vulnerable to an oversupply of new builds. Indeed, a large number of cranes litter the skyline and, although the area is home to the American Embassy, this is increasingly seen as a liability rather than an asset.
Overall the supply bulge will keep price rises in check across Battersea for the time being. But therein lies the opportunity for investors: the longer term outlook looks rosy.
Living within the power station building clearly commands a premium: this studio at c. £1m is a prime example.
Move a little further away from where the action is and, even with a Sky Pool, a similar studio is considerably less.
As someone who hails from the other side of the river, I’ve always been somewhat dismissive of Battersea. No longer. For those looking for a return on their property investment, it should be top of the list.
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