London developers are jostling for position in the centre of Edinburgh as they shift their focus away from the UK capital, a property briefing heard today (1st March).
In a very strong new build sector, where record £/sq ft values are being set with the release of every development, prime sites in Edinburgh City Centre are attracting bids not only from local but also from London developers searching for growth elsewhere.
Strutt & Parker Associate Michael Hodgson, speaking at the firm’s Property Seminar in The Principal on George Street this morning, said: “Edinburgh is benefitting from a general shift away from London. Investors are capitalising on Edinburgh’s buoyant property market and the popularity of the core and hub of the city itself. Other players in the market are hotel operators and those developing serviced offices, both often able to outprice the competition. As a result, new sites are going to very competitive closing dates and attracting as many as 15 offers.”
He added that the new build sector was “going from strength to strength” with prime West End achieving £450 to £650 / sq ft and prime new build penthouses selling for £700 / sq ft. This contrasts with £800 to £2,000 p / sq ft as reported by Partner Sarah Curtis, whose talk at the briefing was on the London new build market, fuelled predominantly by overseas purchasers.
Significant demand, particularly for luxury new build, comes from downsizers, continued Mr Hodgson. “This is a trend which has been going on for some time and due to an ageing UK demographic is only going to grow. While downsizers are likely to release significant cash, their primary driver is to find a smaller home and garden which offers luxury and comfort but requires less maintenance. This is exemplified by the Newbattle Terrace development by Wemyss Properties, where the beautiful finish, a lift, underground parking and proximity to shops, restaurants and a vibrant local community, is proving attractive to downsizers.”
Mr Hodgson told the delegates that the outlook for the Edinburgh property market as a whole is a very positive one. “Demand at the top end, although not quite back to pre-2007 levels is now very strong. The market is characterised by an undersupply of prime properties, which is keeping prices firm. We have sold some fantastic properties in the past 12 months and demand is still very strong for £1m+ and £2m+ properties.”
Such is the appetite, he said, that some recent properties such as a four-bedroom ground and garden flat at Eglinton Crescent, went under offer within 24 hours of going on the market.
He said that while New Town, Stockbridge, West End, the Grange and Morningside would remain perennially popular, the places to watch were those areas near new developments, such as the St James redevelopment, which were likely to prosper and gentrify as a result of nearby improvements.
Mr Hodgson said: “The east of the New Town and the top of Leith Walk have seen some fantastic growth over the past 18 months. The centre of Edinburgh is moving east with the development at St Andrew’s Square and St James at its beating heart. It is no surprise that our office has just moved east to George Street.
“Quality apartments and houses within walking distance are sure to benefit from this trend, with the already fashionable Albany Street, Abercrombie Place, Broughton Street, London Street, Drummond Place and Dundonald Street likely to become particularly sought after.”
He said that similarly, in Morningside, new developments including Newbattle Terrace by Wemyss Properties were making the area even more desirable with surrounding streets likely to benefit. These included Church Hill, Clinton Road, Falcon Avenue, Falcon Gardens, Albert Terrace, Abbotsford Crescent, Abbotsford Park and Morningside Place.
In a similar vein, the West End was benefitting from the Haymarket redevelopment and Grosvenor Street, Coates Gardens, Rosebery Crescent and Magdala Crescent all likely to see price increases. Additionally, the impact of the prestigious refurbishment of Victorian townhouses on Drumsheugh Gardens by Dunedin House Properties, with prices commanding approximately £450 - £650 / sq ft, will ripple out to other prime streets slightly further west such as Eglinton Crescent, Glencairn Crescent, Grosvenor Crescent, Lansdowne Crescent and Douglas Gardens.