The Crossrail factor is boosting property demand in the areas set to benefit, with east London in particular reaping the rewards as investors seek to get into the game ahead of the improved transport link’s arrival.
Fund management firm Clearbell Capital LLP is one of the latest companies to move into the area, purchasing the three building Harbour Exchange development near South Quay in a deal worth £37 million. The firm is expected to channel further investment into the site in order to increase value and turn a strong profit, with upgrades to common and external areas a priority alongside significant works to the internal accommodation.
Clearbell has partnered with Morgan Stanley Alternative Investment Partners Real Estate in the venture, and hopes that the expertise brought to the table by the property specialist will aid greatly in achieving its financial aims. Morgan Stanley may also prove useful in the firm’s secondary aim, which involves approaching existing tenants and asking what measures would persuade them to renew letting agreements at the end of their fixed terms.
Clearbell partner Rob West says; “We are delighted to acquire this asset off a sensible base price with scope to drive future value via refurbishment and leasing.
“Clearbell has deployed approaching £200 million in three investments over the last few months – given market conditions we expect our rate of capital deployment to accelerate throughout 2014.”
Although business investment into east London is expected to rise meteorically as a result of Crossrail, another sector expected to benefit is tourism. With easier access to the West End, tourists may well choose to base themselves in the less expensive east London locales – providing hoteliers and leisure firms the scope to expand into the area.
Hot off the blocks in this regard has been budget hotel group Tune Hotels, which is currently in the process of constructing a 130 bedroom hotel near West India Quay. The project is forecast to be completed by November this year and will be especially geared towards business travellers requiring access to the Royal Docks business hub once work there is complete.
Tune Hotels group chief executive officer, Mark Lankester, says; “Introducing the fifth hotel to the capital is a significant business move for us.
“The demand for a low cost hotel in Canary Wharf that offers good quality basics and importantly a great night’s sleep is becoming ever more important as tourists and business travellers are swayed by price but unwilling to trade down on standards.”
With east London forecast to become a highly desirable location, Tune Hotels and Clearbell will feel their investment in the area is a safe bet that will reap even greater rewards in the future.
