South Bank becomes capital’s rising star as developers commit billions to makeover

A formerly unloved part of London that was a grubby centre for heavy industry is to be transformed over the next decade by soaring towers and more than 16,000 homes.

A report today shows the dramatic transformation planned for South Bank, the stretch of the Thames that runs from Tower Bridge to Battersea Power Station.

CBRE, the property consultant, said that 27 schemes in the planning pipeline would provide about 16,300 homes by 2023. Of these, 2,500 would be designated as affordable housing.

The proposed schemes include large residential towers in Waterloo and Vauxhall — where Dalian Wanda group of China is planning to build Europe’s biggest residential skyscraper — as well as thousands of homes at a redeveloped Battersea Power Station.

New embassies are planned, including a new diplomatic base for the United States in Battersea, as well as hotels, river parks, a new Northern Line Tube extension, shops and office developments.

CBRE said that rising confidence among developers had led to £2.3 billion of development deals at South Bank since 2008 — 10 per cent of activity in the entire London market. It added that the average price for a new South Bank flat had risen by 160 per cent in the past five years, from £500 to £1,300 per sq ft, and “will soon break the £2,000” mark.

Lisa Hollands, managing director of CBRE Residential, said that the pace of change along South Bank was striking. “South Bank is arguably one of the most exciting property stories this decade. You can buy a property there at a much more reasonable price than you would directly over the river on the north. We are finding that about 50 per cent of the buyers are British and there is a really broad cross-section of buyers from different nationalities,” she said.

CBRE said that although a significant supply of new homes was due to come on stream in the coming year, this would be soaked up by a significant bottleneck of demand. It said that at least 60 per cent of apartments under construction on the South Bank had been pre-sold before completion.

Half of the developers behind the 27 schemes had already agreed their Section 106 contributions — a development tax — with local authorities.

The total so far is £1.5 billion, which would be invested in the local communities in areas such as affordable housing, new schools and transport infrastructure.