London is experiencing a resurgence of high-rise living – driven by a need to build up rather than out – with 13,600 residential units currently under construction in new towers in the capital, according to a leading property consultancy.
CBRE also revealed that there a further 70,000 units now in the planning pipeline, 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.
Research also found that towers are emerging in clusters, a trend 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. Clustering is driven by local values, with locations close to the river particularly attractive to buyers and, therefore, to developers.
Said Jennet Siebrits, Head of Residential Research at CBRE: “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 per cent. The largest ‘tower premium’ was achieved on the highest specification and value product, ranging between 1.3 and 3.25 per cent.”