The investment case for Hanwell

Summary

We believe that there is a strong investment case for Hanwell, in the London borough of Ealing.

This is underpinned by three main factors:

  • Hanwell’s Crossrail station is set to open in 2019. Crossrail is currently Europe’s largest infrastructure project, and JLL have forecast +46.4% capital growth within a 750m radius of Hanwell station through to the end of 2020
  • London’s population continues to grow much faster than it can build new housing, so people are moving out from the centre. Hanwell should continue to be attractive to wealthy professionals who are willing to commute to have more living space
  • Hanwell benefits from proximity to some major businesses and employers, such as Ealing Hospital, making it an attractive rental market

Crossrail: Europe’s largest construction project

Crossrail is Europe’s largest construction project, stretching across 40 stations in and around London. The line brings an extra 1.5 million people within 45 minutes of central London, dramatically reducing commuting times to key areas such as Canary Wharf, Paddington and Liverpool Street.

JLL, in their report on Crossrail investment opportunities forecast that properties located 750m from Hanwell station will experience +46% capital growth, from the end of 2014 through to the end of 2020. Our Hanwell properties are within or just outside this distance and should attain significant benefit. Once completed, the journey from Hanwell Station to Bond Street in the West End will be reduced to just 15 minutes and the journey to the financial district in Canary Wharf to just 29 minutes.

Hanwell Station will start running Crossrail services from 2019 and the reduction in journey times is expected to have a significant impact on local GDP, placing upward pressure on capital values and rent.

As London expands, people continue to move out

The truth of the matter is that London cannot house its growing population. It’s growing at 40,000 households a year, while the housing stock has grown by no more than 25,000 a year at any point over the last 30 years. This data comes from Boris Johnson’s draft London Housing Strategy for 2014.

People are moving further out as transport links improve, and Central London becomes more expensive and crowded. Hanwell is a well connected and established area on the outskirts of London, with Victorian buildings and green spaces. It should continue to be attractive to wealthy professionals looking for more space than they could achieve in central London.

The growth in demand from increasing numbers of commuters is a force that continues to drive capital and rental values up.


Strong rental prospects

Hanwell benefits from its proximity to two major employment hubs whose employees should provide strong rental demand.

Ealing Hospital is just a 15 minute walk from the station, and employs around 1,550 staff. Crossrail will also bring Heathrow Airport within just over 10 minutes’ train journey. The airport and its on-site businesses employ 76,500 people. Heathrow is also bidding to build a new runway. If successful, this is estimated to provide more than 120,000 new jobs, further strengthening the rental market in areas like Hanwell.