New research by CBRE has found that the resurgence of high rise
living – driven by a need to build up rather than out – means that
13,600 residential units are currently under construction in new towers
in London, with a further 70,000 units now in the planning pipeline.
That’s enough to meet the Mayor of London’s housing target for two
years.
The move towards constructing taller residential towers
has been ignited by an upsurge in land values in London, with a
consequent need for developers to be more efficient with their sites.
Tower
developments are increasingly synonymous with luxury living and being
higher up can add substantial value to units. This means that end values
can more frequently support the higher build costs attached to towers.
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The research also found that towers are emerging in clusters.
This is driven in part by planning policy, which drives tall buildings
to the central activity zone and opportunity areas. It also guides them
away from sites in the viewing corridors designated in the London Plan,
which guard views of the river and existing skyline.
CBRE has
also found that clustering is driven by local values, with locations
close to the river particularly attractive to buyers and, therefore, to
developers.
Mark Collins, Chairman of Residential at CBRE, said:
“Towers are valuable instruments for providing much needed homes. In the
last decade, tower schemes have generated just under 10,000 new homes,
but there now are 13,600 currently under construction and a further
70,000 units in the planning pipeline, all of which can help to play an
important role in meeting the requirement for new homes in the capital.”
Jennet
Siebrits, Head of Residential Research at CBRE, added: “As London’s
skyline continues to grow, we have seen an array of towers being
submitted for planning, under construction and now completed right
across the capital. Despite the higher build costs associated with
developing high-rise, developers have recognised the increased premium
that these developments can expect to enjoy, making them increasingly
viable.
“Through examining the unit by unit pricing of 15 current
and recent schemes across a range of price points and specifications,
CBRE has calculated an average price premium per floor of 2.3%. The
largest ‘tower premium’ was achieved on the highest specification and
value product, ranging between 1.3% and 3.25%.”
Stuart Robinson,
Chairman of Planning at CBRE, added: “In London we have a tradition of
setting broad guidelines for the clustering of tall buildings, so that
they do not harm important views. This requires a high standard of
design, so that London’s skyline is enhanced.
“This approach will
come under increased pressure in the future, as we will increasingly
need to create higher density in our city in order to meet London’s
housing need.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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If you have a property story you want us to publish email: andrew@propertyguru.com.sg