Nine Elms developers are struggling to find buyers, reported a recent article from The Telegraph. According to the newspaper, the first residential tower (to be completed by 2023) at the centre of the One Thames City development has sold less than 7% of its units (fewer than 90 flats) in its first year of marketing. Even worse, according to the newspaper, more than half of those flats have reportedly been sold to employees or friends of the developers, or other related parties.
The tower is one of three, and if ever completed by Chinese developers joint venture R&F and CC Land the multi-billion pounds development should have more than 1400 luxury homes. At the heart of Nine Elms development, the scheme lays close to the ‘obscene’ Sky-Pool complex. So far, according to The Telegraph, only £120 million of revenue has been reported since pre-sales began nearly two years ago.
Developers R&F have strongly denied claims that more than half (47) of the 90 flats sold last year were sold to its friends or employees, but they confirm the figures of about £100m from the newspaper by saying: “We have exchanged contracts to sell almost £100 million of property in the United Kingdom in 2021, which is a strong performance by anyone’s standards“. However, according to the Telegraph, the figures come from company data disclosed in Hong Kong recently.
In the meantime, the joint venture plans to reduce the residential offer and scale-up offices, hopping that the new Apple offices which is due to open soon and the new Northern Line extension will boost demand.
As we reported last month, R&F, the Chinese property developer based in Guangzhou, is to borrow £750m from its chairman and its CEO over the next few months. Some analysts are glancing at R&F’s balance sheet with worry, where £9bn are due by 2028, according to Bloomberg’s data. Although R&F told its UK operations will be unaffected, rumours said that they could follow the same patterns as Wanda and pull out of Nine Elms.
Conservative Wandsworth still believe in the trickle down theory
In Wandsworth Strategic Planning and Transportation Overview and Scrutiny Committee on November 11 (webcast), Labour Councillor Simon Hogg addressed the failure of Wandsworth to deliver affordable accommodation and labelled the Tory Vision for Wandsworth’s future as Dubai-on-Thames (0:39 of the meeting and later on Twitter), reusing a name which has been given to criticise the Nine Elms development more and more frequently in the past years (even the Evening Standard was shocked in 2014).
Conservative councillor Guy Senior responded: “Without that overseas investment, those developments would not have taken place in the first place. So it is important that we get in a modicum of this investment because obviously we wouldn’t be building otherwise.” (00:41:35). He also said without some of the flats on Peabody estate on St Johns Hill being sold to private investors, we would not have had a lot of really good quality social housing (this is just a gross misrepresentation, as more than half of the estate redevelopment has been dedicated to private homes and 30% less social dwellings are being built – 00:47:50)
In a brief exchange, Cllr Hogg asked (00:45) if Cllr Senior “knew of a single Battersea family that moved into the Battersea Power Station development“. Cllr Senior responded: “I certainly don’t know who is moving to the power station but the report of the Mayor of London made it clear, those developments wouldn’t happen without some sort of overseas investment“.
According to the 2017 LSE report that Cllr Senior cited, we learn (p11 of the report) that in Central London up to 85% in large development go to overseas investors. And it can make up to 65% of market sales in mid-size schemes in zone 2 and 3. The study confirms also that in the oversea investment comes largely from China/Asia and Middle East.
In other words, build for the rich, and it will leave some crumbs for the “normal” population. Wandsworth Council believes in the trickle-down theory, favoured in the Thatcher-Reagan era but now proven to exist only in fairy tales, but Joe Biden has a message for them!
The Guardian journalist, author, political commentator and Youtuber Owen Jones has published a video addressing the issue of the working class communities being torn apart by greed of property developers.
In case you are interested, there might be some possibilities to get a discount: great deal under £1m for a one-bedroom flat!