JR Capital invests £15m into London Zone 3 Residential: Hornsey
JR Capital has purchased 31 flats off plans for circa £15m in a new Berkeley Homes development known as Smithfield Square in Hornsey, London N8 near Alexandra Palace.
The purchase is part of JR Capital’s chosen strategy to identify areas in the capital off prime central London but where the fundamentals are in place for strong capital growth coupled with a resilient local rental market.
Smithfield Square, due for completion in 2017, is a new development of 270 luxury 1 and 2 bedroom apartments benefiting from 24 hour concierge, gym, parking and private gardens. The community scheme will include a new Sainsbury’s food store.
Located in an established residential area close to Crouch End and Highgate the development is only a 5 minute walk to Hornsey train station which connects to Kingcross and a 10 min walk to Turnpike Road underground station which is on the Piccadilly line and only 15 mins to the West End.
The famous Alexandra Palace is located just to the north of the development and some of the flats have views looking over the Palace and its landscaped gardens. Alexandra Palace train station sits on the proposed new Crossrail 2 train line that will connect North and South London and is currently under consultation by the UK Government.
The flats were purchased by a consortium of our private clients from the Middle East and Europe. JR Capital co-invested into the deal.
The flats will be held for investment purposes for the medium to long term.
John Collier-Wright, founder and chief executive of JR Capital said: “While the capital as a whole continues to outperform most of the rest of the UK residential property market, we see stronger growth outside prime central London in those local communities with established high streets and schools and strong transport links for commuting to the City and West End.
We continue to see value in residential in Zones 2 to 4. There remains a chronic shortage of relatively affordable housing in London and the sweet spot for both end users and investors is the £400,000 to £1m bracket.
Prices have risen consistently more in this bracket of relative affordability for the capital over the past couple of years, helped recently by overall declines in stamp duty payable in this bracket since last November’s changes. Both demand for housing stock and sales volumes have remained robust in this bracket, unaffected by a pause in volumes that has occurred in the £2m plus market in the run up to the UK general election.
We see the £400,000 to £1m price bracket, in the right locations for the renting market, as being the most in demand from a new wave of buy-to-let investors due to enter the market following the freeing up of the pensions market.
We and our investors are long on the success and popularity of London as a great place to work, live and invest.
Our purchase in Hornsey follows similar investments we have made into areas such as Aldgate East, Brentford and Stratford which fit with our chosen strategy of investing in smart parts of the capital outside prime central London. We look to invest into areas that have good transport connections and are within 25 minutes of central London.
Smithfield Square is the only major new development in the Hornsey area, where there is an undersupply of new and smart housing for young professionals working in London.
Residential values in the Hornsey and surrounding areas are at around £600 per sq ft which could rise to £750 per sq ft over the next two to three years depending on current values and prices paid.
We see Middle Eastern investors broadening their investment horizon and moving away from Central London trophy properties to assets that generate steady income in strategic areas poised for growth as well as established areas throughout London zones.”