Fixing Wapping’s supply line
Wapping is a relatively small area with many historic buildings. Developers are often deterred from converting buildings with listed status into residential properties as it can be costly and time consuming getting the planning permission.
As a result of the only major new build development underway in Wapping right now is St George’s London Docks. St George is part of the Berkeley Group who is no stranger to taking on large-scale developments in listed areas. Just look at Royal Arsenal Riverside, to see their award-winning work with listed mixed-use developments.
Unlike the 19th century warehouses with exposed brickwork, Juliet balconies and wall hoist that line the streets of Wapping’s historic past, the 15 acre complex of newspaper offices and printworks on the site of London Docks is unlikely to be missed.
Rupert Murdoch’s former print factory and journalist stronghold earned the nickname ‘Fortress Wapping.’ With its ugly canopies, complete with barbed wire, and a gatehouse that looked like armed guardpost, the building bore more resemblance to a maximum security prison than a dockside wharf. The proposed redevelopment of stunning residential blocks with landscaped piazzas and water gardens has been praised as a welcome addition to enhance a historic area.
There are a few listed elements of the old site which will be artfully blended with modern design to restore a more faithful vision of Wapping’s docklands history than Murdoch’s media empire. The basement of a 19th-century building will be opened up to create public space and a former wine rum and brandy warehouse that was repurposed as The Times newsroom will be transformed into a 100,000 sq ft retail and leisure complex.
The new development will consist of 1,800 new homes, 230,000 sq ft of office space, plus shops, restaurants and a secondary school.
Nearby at Wapping Riverside, developers Galliard are creating the ‘last remaining original warehouse conversion in London’ consisting of 37 apartments. In 2014 Ballymore completed ‘the first major building in Wapping in the past 10 years’ at 21 Wapping Lane and units sold fast. But that’s it as far as new stock is concerned, there are no more major planning applications at the current time.
A limited supply pipeline is a good news for property investors. Lower supply means less competition to provide for rental demand. As demand in the area is already huge, there’s a real opportunity for good returns from Wapping buy-to-lets.
Property prices in Wapping
A Zone 1 London location, hot on the heels of Mayfair and Chelsea
Wapping’s central London location means it is also subject to the fortunes of international buyers. China’s recent market wobbles have led to more investors looking to store their investments in the relatively safe havens of London prime properties.
International students from wealthy backgrounds who attend London’s top universities often look for prime rentals and make respectful tenants. High spec apartments in Wapping would appeal to these tenants as they are perfectly placed to access all the best universities from LSE to Kings College and the University of Greenwich just across the river.
According to Knight Frank data, the Wapping lettings market has outperformed other prime areas of London in the past year that you’d traditionally associate with the top-end of the market. Places like Mayfair, Chelsea, South Kensington and Knightsbridge, Wapping out-performed them all.
Tower Bridge views come at premium prices
The most popular properties are those with a view of Tower Bridge. At their pre-crash peak, apartments that overlooked the bridge’s silhouette at sunset cost as much as £1,000 per sq ft. Today, that figure is well over £1,700 per sq ft.
Why is rental demand so strong in Wapping?
London’s historic past meets modern design
Wapping is considered by many to be the Dockland’s most charming and authentic district, with historic wharves and warehouses, cobbled lanes, famous inns and riverside pubs where Charles Dickens and J.M.W. Turner drank.
At Execution Dock the shackles that once held the corpses of convicted pirates still clang at high tide. A short journey away, the Tower of London is one of the most iconic historic buildings in the world. Despite its central London location, Wapping’s residential areas can be very peaceful while still in sight of London’s financial centres.
Spanning from the shadow of Tower Bridge the area runs east to Shadwell Basin. Modern-day Wapping and the riverside around Tower Bridge, while steeped in maritime history, are very modern, following the regeneration of London’s industrial heritage.
Winding lanes still cross the district but apartment blocks on Wapping High Street and the visible architecture of Canary Wharf, add a contemporary feel to the area. The warehouses that once stored imported luxury goods from across the world, that have now been converted into spacious luxury apartments. But Wapping wasn’t always full of des res apartments for the upwardly mobile.
From bomb-damaged docks to sought-after postcode
E1W was once a bustling trade hub in the age of the British Empire, but suffered from heavy bombing during the Second World War and was left to decline.
Redevelopment of derelict buildings began in 1981. The London Docklands Development Corporation relaxed regulations allowing industrial warehouses to be redeveloped as residential properties. In a move that echoes the current relaxing of the laws to convert office space into residential addresses, residents flocked to the attractive loft apartments with views of the Thames.
At the time, Margaret Thatcher’s regeneration scheme, the Docklands Light Railway, was a huge boost to much of the Docklands, and Wapping benefited from access to the DLR at Shadwell. However, that left the majority of the area reliant on buses or a walk to Tower Hill for the District line to access the rest of London.
London Overground brought a new wave of residents to Wapping
The opening of Wapping station in 2010, on the East London branch of the Overground line, that has played a massive part in developing the area in recent years and is a huge factor in the second wave of popularity the area is now experiencing. The line now connects Wapping between Highbury and Islington, Clapham Junction, New Cross and West Croydon. Zoopla’s estimates the average the average value of property in Wapping to have risen over 45% in the years since the Overground opened.
The arrival of Crossrail at both Whitechapel and Canary Wharf will see another surge in property prices in nearby areas. Whitechapel is a short walk north of Wapping and is expected to be the main beneficiary of the entire Crossrail project. Residential research experts JLL anticipate property prices near the Crossrail station will rise by 54% from 2014-2020.
Good yields in a solid lettings market
Prime rents in Wapping have increased by 1.9% in 12 months to October 2015 and properties are renting fast. The Wapping lettings market has performed similarly to the sales market and exceeded other parts of London in the past year. Wapping rental figures growth for prime properties increased more than Islington, Chelsea, South Kensington, Mayfair, Canary Wharf, Knightsbridge, Wimbledon and Fulham.
Similarly, buy-to-let yields surpass other areas. The London average rental yield is 4.5% but Wapping delivers a more impressive yield of up to 5.7% for a two bedroom apartment.
Figures on the London Property Watch site indicate this is one of the highest yields in London at the current time. The figure is surpassed only by a three bedroom in Bethnal Green, with current yields at 7.9%.
Gary Hall, Head of Wapping Lettings at Knight Frank anticipates “healthy growth as consumer and business confidence continues to grow and the number of available properties increases. We also expect to see more movement across the corporate sector, with more businesses relocating employees to The City and Canary Wharf for which Wapping is the perfect commute.”
Wapping is within walking distance of three of London’s major employment hubs: Canary Wharf, the City and London Bridge and opposite creative Bermondsey and cultural Southbank. This makes it popular among young professionals and professional couples.
In his Financial Times article on Wapping’s property boom, Nathan Brooker quotes Savills’ Wapping to explain the trend. “We are seeing more young families who are choosing to stay in Wapping, where a few years ago perhaps they would have moved on.”
This is a direct result of the community that has been gradually growing around the Wapping wharves in recent years.
Traditionally the area has a solid primary school offering (St Peter’s London Docks Primary School is rated well by Ofsted) but was lacking where secondary schools were concerned. Two independents: City of London School and City of London School for Girls are 25 minutes away by bus but news that the St George London Docks development will be opening a new secondary school was warmly received by residents. It has prompted families with young children to stay on in the area and boosted the area’s appeal for families with older children.
Building fundamentals: The rise of St Katherine Docks
In previous decades Wapping lacked the shops and amenities it needed to thrive, but improved transport and increased popularity have changed all this.
St Katherine Docks has an extensive number of drinking and dining options. 24 restaurants, pubs and coffee shops, many with al fresco seating overlooking the marina. There’s also a range of office space, specialised art galleries, bespoke boutiques and boat moorings available. Resident amenities range from a Tesco local to a Sunday farmer’s market at Shadwell Basin.
These amenities have added a much sought-after village-feel to the already desirable warehouse conversions and cobbled streets. The small area and know your neighbour’s mentality that is rarely found in inner London spaces adds further to the charm.
With London’s club scene hit hard by the recession, nightlife offerings have moved away from the traditional locations around Tottenham Court Road and Oxford Circus. Opened in 2012, Tobacco Dock is two floors of repurposed warehouse and quayside space used for club nights, festivals, exhibitions and conferences.
Wapping also has a growing music scene, making use of the great space that Wapping’s warehouses offer as entertainment venues like The Hydra in Pennington Street. There ’s also a range of comedy, cinema and cabaret in the decadent setting of Wilton’s Music Hall, the world’s last surviving music hall.
As well as the 10,000 sq ft shopping complex coming to London Dock, the council plans to extend the leisure and tourism role of St Katherine Docks and build the whole area as a community hub with even more retail space.
Wapping is a prime location that’s running out of prime apartments. See our available property page for current investment opportunities and take advantage of unprecedented demand from affluent tenants.