The Crossrail: Investment and Offices

London’s Crossrail, due to open in 2018/2019, is the largest infrastructure project Europe has ever seen. It will increase capacity and connectivity which in turn will encourage regeneration and new development in the areas surrounding the 40 stations it passes through (with 10 new stations being built). It connects also Maidenhead and Heathrow in the west and Abbey Wood and Shenfield in the East.

The Crossrail is already having an impact on investment decisions, British Land is paying £470 million to purchase a significant amount of the buildings surrounding Paddington Central in the hope their value will dramatically increase once the Crossrail is functioning; although the effects of the Crossrail can already be felt in many of the areas it is due to pass through. For example residential prices at Tottenham Court Road have increased by 20% already, with take up and rents in office space also increasing. Similar investments are occurring all along the Crossrail with Almacantar rumoured to the top contender to purchase 125 Shaftsbury Avenue for approximately £120 million. 125 Shaftsbury Avenue is currently a mix of retail and office space but has huge potential for redevelopment. 

With regards to Central London Offices, Ollie Salter from Morgan Pryce believes that the existing strength of their groupings and submarkets means it is unlikely the Crossrail will create new markets. We should see an increase in demand for office space due to the Crossrail increasing footfall, improving travel links across the city and reducing travel time (especially in the West End). Also it’s certain it will support occupier demand in already established office locations whilst maintaining values in high value areas. 

Although the Crossrail is not likely to create new office markets in Central London there will be smaller businesses who are tempted by reduced rents outside of Central London who may look to relocate to new locations such as Slough, where it would be possible to get to the West End in 20 minutes. This relocation is likely to push up rents in these areas and potentially create new markets outside London.

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.