Spotlight: East of City

East of City
Spotlight: East of City

31 October 2016, words by Frances Clacy

Proximity to the capital’s main financial districts drives demand for prime property in the East of City markets

Visit the Savills Canary Wharf office
Visit the Savills Wapping office

Since the 1980s, Canary Wharf has transformed from what was once one of the busiest docks in the world to become an area well-known as one of London’s leading financial districts.

It is only since the early 1990s, however, that it has also become a recognised prime residential area for people to live as well as just work, characterised by new build, high rise towers.


Wapping, on the other hand, began to be developed residentially from 1981. The founding of The London Docklands Development Corporation led to deserted warehouses in the area being transformed into luxury flats.

This trend has been seen again, more recently, with the conversion of previous industrial and office buildings. New developments in these markets will continue to have a positive impact on the surrounding housing stock already available in the area.

Property prices

In the year to July 2016, the average sale price in Wapping was £740k, 47% higher than nearby Canary Wharf at just over £500k, according to Land Registry. While Wapping commands a premium in comparison to the wider borough average, property prices in Canary Wharf are in line with those for Tower Hamlets as a whole.

In the prime markets, the average price per square foot values for second hand properties are £750 and £1,000 for Canary Wharf and Wapping respectively, both offering value when compared to the wider prime London average of £1,300.

As a result of strong levels of demand and limited stock available in the area, prices in the prime market of Wapping have increased by 45% in the period since the financial crisis, outperforming the 32% average growth seen in wider prime London.

Canary Wharf has seen more subdued house price growth of 20% over the same period due to the high level of new build stock which was brought to the market in the run up to and immediately after the credit crunch.

More recently, as a result of stamp duty reforms introduced in late 2014, the introduction of a new stamp duty surcharge for additional homes in April 2016 and the uncertainty surrounding the EU referendum, price growth in both prime districts has been more subdued.

Over the period since the peak of September 2014, prices have fallen by -4.4% in Wapping whilst growth in Canary Wharf has been constrained to 1.8%. Both areas, however, have continued to outperform the prime central London market which has seen much more substantial falls over the same period. This is because values in the East of City markets in general are lower, so the higher rates of stamp duty have been less of a burden.

These figures mask some variation across different price bands. In the market for properties worth over £1m in both Canary Wharf and Wapping, prices have fallen by around -8.0%, in an adjustment to the new stamp duty rates, whilst properties worth less than £1m have experienced average price growth of 2.8% over the same period.


Second hand market dynamics

Figure 1

Source: Savills Research

Rental market

Rental values in Wapping are only 11% higher than those in Canary Wharf, a stark contrast to the variation in their respective sales values. The median monthly rent is £2,000 in Wapping and £1,800 in Canary Wharf, according to Rightmove, both offering a significant discount in comparison to their neighbouring borough, the City of London, where monthly rental values are on average £2,200.

Prime rental growth in Canary Wharf and Wapping has outperformed the rest of prime London since the previous peak of the market in 2007/08, with growth totalling 12% in both areas compared to small falls across the capital.

This is partly due to shrinking corporate budgets over recent years which means these locations are more attractive for relocating employees.

More recently, rental growth in these two prime East of City markets has slowed with some falls in value being seen in Canary Wharf. This is a result of high levels of new build stock simultaneously being brought to the market.


The proximity of Canary Wharf and Wapping to London’s two main financial districts (The City and Canary Wharf itself) drives demand for prime property across both areas, from owner occupiers and investors alike.

This is reflected by the fact that financial and insurance services employees have accounted for almost three quarters of all buyers and over half of all tenants in the prime markets over the past two years.

International residents form an important part of the prime markets of Canary Wharf with the majority of both buyers and tenants over the past two years coming from overseas. However, so far in 2016, there has been an increase in the proportion of domestic buyers, a trend which has also been seen across the wider prime London market.

The average gross yield for prime property in Canary Wharf is over 4.0%, as a result of comparatively low capital values but competitive rents, making it particularly popular for investors. Indeed, 39% of buyers in prime Canary Wharf over the past two years have bought for investment reasons.

Although on a smaller scale, investors still play an important role in the prime market of Wapping, accounting for a quarter of all buyers over the past two years. More recently, however, there has been an increase in the proportion of owner occupiers in the area.

Canary Wharf also has a particular appeal to younger residents, partly due to the value on offer but also because the area is seen to provide a more contemporary lifestyle than other, more established prime London markets. As a result, almost half of all prime tenants and a fifth of prime buyers since 2014 have been aged below 30.


Prices have risen due to strong levels of demand and limited stock

▲ Prices have risen due to strong levels of demand and limited stock

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Key contacts

Frances Clacy

Frances Clacy

Residential Research

Head Office London

+44 (0) 20 7409 5905


Katy Warrick

Katy Warrick

Residential Research

Head Office London

+44 (0) 20 7016 3884