x Abu Dhabi, UAEFriday 19 January 2018

London's Crossrail transport scheme on the right track

A scheme to link central London with Heathrow is one of the biggest transport developments undertaken in the UK capital in a century. And areas along the route are set to benefit from the Crossrail project.

An engineer inspects the cutterhead of a tunnel boring machine in London. Jason Alden / Bloomberg News
An engineer inspects the cutterhead of a tunnel boring machine in London. Jason Alden / Bloomberg News

Phyllis is now half way across London.

Phyllis is one of two tunnel-boring machines (her sister machine is called Ada) that is inching its way under central London to create Crossrail - the new £15 billion (Dh85.28bn) rail link that will connect to West London and Heathrow. Phyllis, was named after Phyllis Pearsall who created the London A-Z road map.

Crossrail is the biggest infrastructure project to be built in London for nearly two decades and is the culmination of 22 years of campaigning by the capital's business community. As a measure of how big the construction project is, there are now 40 construction sites for the line across the capital and a further four more boring machines will be named and used.

Passenger numbers on the new lines are expected to be in the region of 200 million a year, a 10 per cent increase in London's transport capacity.

Crossrail will serve 37 stations linking Maidenhead and Heathrow in the west, to Shenfield and Abbey Wood in the east. Work began in 2010 and is now moving into the peak construction phase, but will not be completed until 2018 to 2019.

When finished, Crossrail will provide essential new links and additional transport capacity, allowing an extra 1.5 million people to reach Oxford Street, the retail and tourist heart of London, within 45 minutes.

Faster travelling times across the capital will open up new areas for development, both commercial and residential.

Developers in the city are already beginning to invest and develop in anticipation of the line's opening and Crossrail itself is set to develop about 3 million square feet of commercial space next to and above central London stations.

"Crossrail has already had an impact on property prices around the central stations we have examined, and we expect this outperformance to continue," says Grainne Gilmore, the head of UK residential research at Knight Frank, which predicts residential property values around key stations will increase by about 40 per cent over the next five years.

The biggest London beneficiaries, according to Knight Frank, will be Tottenham Court Road and Farringdon, although for quite different reasons. The area around Tottenham Court Road station is set to be transformed by the new developments planned by Crossrail, giving the junction with Oxford Street a much needed facelift.

Meanwhile, Farringdon will become one of the biggest transport hubs in London, linking the east/west Crossrail route to the north/south Thameslink service and making it a very attractive destination for homebuyers who want to be able to reach most corners of the capital quickly.

A report by GVA last year on behalf of the New West End Company predicts a 36 per cent increase in passengers - about 200,000 people a day - using Tottenham Court Road station once Crossrail opens.

The St Giles Circus areas, east of central London's Oxford Circus through New Oxford Street to High Holborn, are expected to see a doubling of retail spend by 2025.

However, because it is likely to be 2018 or 2019 before line opens, many retailers are not yet ready to sign leases on buildings.

Many are waiting for details of where station exits will be, which will dictate pedestrian flows and is all-important for retailers looking to take space.

Outside central London, British Land's decision to pay £184 million in February for a retail portfolio that included the 300,000 sq ft Ealing Broadway Shopping Centre, was attributed in part on the impact of Crossrail.

Charles Maudsley, the head of retail at British Land, says there are "significant opportunities to grow and develop the shopping centre …as the area benefits from residential development and the completion of Crossrail".

New developments in Marylebone and North Mayfair, including a preponderance of office to residential conversions, have been spurred on by the potential impact of Crossrail. In Marylebone, in central London, prime residential property prices have increased from £1,200 per sq ft in 2007 to more than £2,000 per sq ft by the end of last year, according to Knight Frank. Over the same period, those in Mayfair rose from £1,500 per sq ft to £2,500.

"Crossrail will undoubtedly increase prices in the immediate area as wealthy commuters will want to enjoy the benefit of immediate access to the Crossrail link from Bond Street, which will almost halve the journey times to Heathrow and Canary Wharf," says Harvey Cyzer of Knight Frank, Mayfair.

"International investors and those looking for pieds-à-terre are already quizzing us about Crossrail and its benefits."

Meanwhile, office developers in the City, the West End and Canary Wharf, which are all close to the line, also expect occupiers to choose their properties - because of the better transport links.

Farringdon will become one of Britain's busiest stations with links to Crossrail, the Underground network, Thameslink and a Heathrow-Gatwick interchange. The station is expected to reinvigorate Smithfield Market and Hatton Garden, an area that is already proving popular with the buoyant technology sector.

Liverpool Street, where British Land and Carlyle are redeveloping the Broadgate office complex, where UBS is one of the main tenants, is also expecting increased pedestrian flow through the area.

Improvements at Whitechapel in east London, including a new pedestrian walkway from Durward Street on to Whitechapel Road, are also expected to help stimulate the area, which has not seen the influx of investment that might have been expected given its proximity to the City.

Recent deals by Derwent London - which bought buildings in Prescott Street in the area - and Aldgate Developments' recent securing of an £85.5m development loan to build the 17-storey Aldgate Tower, suggest things are starting to happen in this down-at-heel neighbourhood.

Perhaps the biggest winner out of Crossrail will be, fittingly, one of its first supporters - Canary Wharf Group.

"They are best placed to benefit from the east-west link, and any types of north-south plan. In future, it will be much closer to Heathrow," says Mat Oakley, the head of commercial research at Savills.

"The winner has to be that part of London."

When the line opens, Canary Wharf will be about 45 minutes from Heathrow Terminal 4, with 12 trains an hour in each direction at peak times. It will also be just 8 minutes from Liverpool Street.

Work at Crossrail's Canary Wharf station started first and is more advanced than anywhere else along the line. A new development built over the station, based on a four-storey box, provides more than 115,000 sq ft of retail and leisure use space.

It is set to open in 2018 and almost half the units are already in solicitors' hands, according to Canary Wharf.

But Crossrail is just the beginning. The London Underground chief Mike Brown and Boris Johnson, the mayor of London, have unveiled plans for Crossrail 2 - a new north to south railway.

They say this will be essential if a new high-speed line from Manchester and Leeds to London is built, delivering 57,000 passengers to Euston in the three-hour morning peak by 2033.

 

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