01 June 2012 – The Times
For proof that the recession is making builders work harder, look to Merchant Square in Central London. The ongoing development that surrounds the rather industrial-looking Paddington Basin is going sleek and upmarket in a bid to attract the wealthy buyers currently sustaining the London property market.
The latest phase of the massive project, just south of the A40, will result in the creation of three new buildings including Westminster’s first tower, designed by the architect behind the Swiss Re building, the London landmark better known as the Gherkin.
Already dubbed “the Cucumber” because of its similar shape, the 150m high-rise will be clad in cobalt blue porcelain and graceful white fins, providing an eye-catching marker for anybody driving into London via the Westway dual carriageway.
It is all part of the effort to redefine an area that has been better known as a hub of railways, highways and waterways than as a destination in itself. It is also what developers must now do to attract the only kind of buyers driving up prices in Central London — affluent ones who purchase flats to live in rather than let out.
Richard Banks, managing director of European Land, the developer behind Merchant Square, has noticed an enormous shift in the London market since the project started, before the credit crunch hit.
When he began planning 4 Merchant Square, one of the now-finished buildings along the canal, buyers were mostly investors looking to let. Patter focused on rental yields and pounds per square foot. Today’s sales pitch, however, is all about bespoke joinery, parquet flooring and Miele appliances as investors are replaced by owner-occupiers.
“Central London’s residential market is going up-spec,” Banks says. “We are focusing on personalised living and moving the whole product upmarket.”
Getting Robin Partington, the architect who gave us the Swiss Re building in the City as well as the Strata Tower in Elephant and Castle, to design details right down to the doorknobs is one way to keep more demanding buyers happy.
Changing the public area around the development is another. The 42-storey tower, which will house a boutique hotel and a bar on the top floor as well as flats, will be flanked by two smaller residential buildings. The whole scheme sits around a branch of the Grand Union Canal and will be landscaped to look like the garden squares that define so much of Westminster. An interactive water fountain designed like a maze will dominate the triangle between the three buildings and provide entertainment as well as decoration. Over the canal itself, a new sculptural bridge that fans open every time a barge passes through, is bound to provide another talking point. Shops, bars and cafés line the ground floor around the square.
At the moment, the space is dominated by Superdrug, Tesco and William Hill. The two smaller residential blocks will be built before the tower, with completion pencilled in for summer 2014. Floor-to-ceiling windows and generous balconies provide light, a feeling of space and, as long as your flat faces the right way, glorious views.
Inside each flat, every inch has been carefully designed to create a cool, contemporary feel. Miles of hidden cabling takes care of the lighting, heating and wi-fi. The entrance hall is framed by built-in cupboards where you can stash away the washing machine and other domestic clutter as well as coats.
The main body of each flat is an open-plan sitting room and kitchen/diner that flows into a balcony large enough for a small drinks party. The kitchen comes complete with Miele and Siemens appliances.
To save space, all manner of pop-out devices have been employed. Pop-up sockets keep cables tidy while a pop-out pantry provides space for food. In the bathroom, hidden shelving pops out right next to the demisting mirror.
Much is made of the scheme’s location. Paddington station, with the Heathrow Express, is just five minutes away. Little Venice is a slightly longer walk. Stroll out in the opposite direction and you get to Selfridges on Oxford Street in about 20 minutes. Hyde Park is not far and the A40 even closer. Prices are equally upmarket but vary dramatically depending on the whether the flat includes the attractive views of Hyde Park to the south or faces north over the dual carriageway.
So far, 79 of the 159 private homes in the development have been sold since the scheme was put on the market in October 2011. Most of them were the less expensive flats on the lower floors and have been bought by people of all kinds of nationalities already living in the UK. A further 42 flats are given over to “affordable housing” projects.
The cheapest apartment available on the open market is a small (565 sq ft) one-bedroom, north-facing flat at £642,500 on the 11th floor. For a wow view of Hyde Park to the south you may need to double your money. A big two-bedroom flat on the south side of the 15th floor stretching 1,153 sq ft commands a £1,71 million price tag while a three-bedroom (1,367 sq ft) flat with a large terrace on the 14th floor costs £2.23 million. Such prices are well above anything on the market around the rest of the square today. Modest flats in some of the earlier blocks, popular with investors at the height of the boom, now swap hands for less than £500,000.
At the far end of the canal, a tiny (459 sq ft) one-bedroom flat in the Balmoral building is for sale for £450,000 with Paddington Estates. At the glitzier end of the basin, there are a handful of resale flats on the market at 4 Merchant Square starting at just under £800,000. Some of the larger units look comparatively good value.
Hamptons is selling a three-bedroom flat (947 sq ft) for just above £1 million. According to the website Zoopla, the property has been on the market since January and the price was reduced by more than 14 per cent in April. Perhaps competition from its fancier and more spacious neighbour has lessened its appeal. Buyers are out there but they are choosier than ever.