After a rash of media reports warning of "Nine Elms disease" and "Battersea panic stations," the fortunes of London's latest large-scale redevelopment project appear to be improving.
The high-profile Nine Elms development in the south-west London district of the Battersea area presents a very strong medium-term opportunity for residential buyers, according to a report published this morning by property service provider, Jones Lang LaSalle (JLL) (JLL).
The report follows last week's announcement that Apple (AAPL) would be moving its 1,400 London-based staff into the iconic Battersea Power Station (BPS) project – welcome news for a development which has garnered its fair share of unflattering press in recent months around surplus supply, sky-high prices and poor coordination between the various adjacent developments.
And indeed, JLL acknowledges the heady supply pipeline, with over 20,000 homes set to be delivered by 2025.
With residential prices either stagnating or slipping in prime London and a price fall of 5.1 percent in the 12 months to August in Battersea itself, according to property service provider Knight Frank, the prospect of a supply glut does not bode well for short-term valuation prospects.
However, as JLL and developers invested in Nine Elms are quick to point out, this should not be viewed as a short-term opportunity. The Malaysian consortium which in 2012 bought the site that had stood derelict for 33 years, looks set to stay despite uncertainty caused by Britain's decision to leave the EU.
According to BPS CEO Rob Tincknell in an email to CNBC, "Our shareholders remain committed for the long-term and have made clear their ongoing commitment to BPS and their certainty in the global appeal of London more widely. Britain's decision to leave the EU does not detract from the defining vision of the scheme."
The project has been hit widespread media reports of foreign early investors hitting the resell button. However, off-plan developments in London often rely heavily on foreign funding as there can be years between apartments being first offered for sale and the date of delivery. While speculative investors may not mind the lag, local buyers intending to live in a development generally prefer to wait until it is closer to completion and the move-in date rather than locking up their money for years. Therefore it is not unusual to see the trend currently underway in Nine Elms, where original investors are now putting the properties back onto the market to capture a premium by selling to long-term horizon local buyers.