Real Estate: London’s Spire to be the Tallest Residential Building in Western Europe
In Y 2013, the architecture firm HOK was approached by a representative of the Greenland Group, China’s 3rd-largest developer. “They said they were investing in London and that they’d made an offer on a parcel,” said HOK Senior Vice President Larry Malcic. “They had done their homework.”
The land in question is #1 Canary Wharf, an area in the far eastern end of the city that grew popular for its proximity to London’s City financial center.
Nothing in the area would match what the Greenland Group hoped to build: $996.9-M, 67-story tower, which, when completed, would be the tallest residential tower in Western Europe.
“From the beginning, they saw it as a fundamentally residential tower,” HOK’s Malcic said. “And they wanted to get value out of the site, so we’ve gone as tall as you can go.”
The building, which is named Spire London, is designed as a 3petal, undulating tower.
Its position on a bend of the Thames provides unparalleled views of London in all directions, and its amenities, including a 35th-story lounge with an infinity pool, a floor devoted to recreation rooms, and an outdoor covered track, would place it at the top of London’s booming luxury real estate.
And then, just as the building broke ground, the UK voted to leave the EU and London’s real estate market, which had already been showing signs of weakness, got weaker.
The Greenland Group is moving ahead with the building.
“The UK’s vote to exit the European Union cannot be said to have had no effect on the property market in London, and we are aware that there could be some turbulence in the future,” wrote Wenhao Qian, managing director of Greenland Investment Ltd.
“Developments of note, as well as iconic buildings, are continuing to do well. We feel that the advantages of London—its global cachet, cosmopolitanism and being a centre of world trade—bode well for a positive future for both the property market and the wider economy.”
The Big Q: Is Greenland’s commitment represents canny long-term planning or Chinese stoicism in the face of adversity.
It is important to consider the overall London housing market, Brexit or not.
London’s developers are building about 40,000 to 50,000 new units a year, when the market needs about 120,000.
So, Spire London is adding much needed supply of apartments, 861 in total, in the face of continuing demand.
About 50% of all central London buyers are international, and many of those buyers are coming from new-build cities. So new buildings appeal to them.
A recent Cluttons survey of 127 UAE-based high-net-worth individuals listed Canary Wharf as the top neighborhood for residential investment the result of a massive influx of investment into the neighborhood from sovereign wealth funds.
But, if economic volatility continues, that may eventually dampen international interest.
In the short term
Spire London hopes to attract international buyers confident in London’s future as an international financial center.
In a mid to long-range outlook, demographic indicators imply that its buyers could come from within the UK for this new high-rise, not traditional living.
Mr. Malcic says the building was designed with just this sort of change in mind. “We’re looking to appeal to a whole range of people,” he said. “I think it will be equally appealing to people in the home counties whose children have grown up, who don’t want to spend time cutting the grass anymore.” “In the old days, you measured success by how much square feet you had,” he said. “Now it’s how much convenience you have.”
Construction is set to begin in early Y 2017, with a completion date of Y 2020.
Most investors in the London property market are in it for the long term, and the long-term picture is Rosy