Top restaurants push West End property prices up 20%

Good restaurants in London can enhance residential property values by as much as 20% — with fast food outlets having the opposite effect — a new study has concluded.

Research into the link between restaurant openings and house prices in London’s West End found that affluent residents weren’t just dining out more, but choosing to live in addresses close to leading restaurants.

Wetherall and Dataloft, which jointly carried out the research, said the trend means that high quality restaurants can make an address sought after and help enhance residential property values by up to 15% to 20% in the immediate locality.

Story continues below
Advertisement

In contrast, West End residential properties on the doorstep of fast food outlets “underperform” the average growth for the region by up to -10% to -15%.

Wetherell and Dataloft analysed residential property values in five of the six districts that comprise London’s West End: Mayfair, Marylebone, Fitzrovia, Soho and St James’s.

They then compared these property values with the number of Michelin-star restaurants, other restaurants and fast food outlets in each of the districts.

The survey also looked at individual restaurants and fast food outlets, and analysed the performance of residential property values in the postcode districts immediately surrounding them.

The Wetherell survey found that there are some 295 eateries in the surveyed West End area, comprising 29 Michelin-star restaurants, 223 other restaurants and 43 fast food outlets.

Mayfair has the highest property values in London’s West End, with prices for flats currently averaging £1,953 per sqft.

These expensive properties are located alongside London’s top restaurants, since Mayfair has the highest number (20) of Michelin-star restaurants in the West End (69% of all Michelin West End outlets) and 65 other restaurants. Mayfair boasts a host of famous brands including Le Gavroche, Scott’s, Maze, 34 and Nobu. Crucially, there are no high-street-chain fast food outlets in Mayfair.

In contrast, Fitzrovia and Soho have the lowest property values in London’s West End, at £1,130 per sqft and £1,283 per sqft respectively, and also have the highest number of fast food outlets, 14 in Fitzrovia and 18 in Soho (representing 33% and 42% of all West End fast food outlets respectively).

There are just two Michelin-star restaurants in Fitzrovia and two in Soho, with other restaurants totalling 13 and 74 respectively.

“There are plenty of examples of how good restaurants have transformed an address and helped resi-values increase dramatically,” said Peter Wetherell, managing director of Wetherell. “In 2009 there was a big gap in South Audley Street in the form of a neglected office block. Then Richard Caring transformed it into a top restaurant known as 34. This has helped to make the flats in No.33, an adjacent apartment building, extremely desirable and property values jumped up 15% after the restaurant opened.

“Similarly, the construction of the Twenty-First building with its flagship Cipriani restaurant transformed Davies Street from a place people passed by into a destination. Twelve years ago the penthouse above the restaurant was valued at £1,400 per sqft, it has just resold for £4,000 per sqft.”

Wetherell and Dataloft also analysed residential property values by postcode districts for flats located around different restaurants and fast food chains, comparing the current average value, 2007 average value and uplift over time.

Again, the interplay found at the district level is repeated. W1K (which contains Scott’s and Le Gavroche) has seen residential values grow by 61% between 2007-2013, just over 20% above the average growth rate for the W1 postcode districts.

In addition, the W1K postcode district commands a significant pound per sqft premium, with flats sold in 2013 being 84% more expensive per square foot than the adjacent postcode W1W and 61% more valuable than W1D, which don’t contain famous restaurants.

W1K has also significantly outperformed both W1W and W1D since 2007 in terms of price growth. This can be contrasted with the W1D postcode district which features a McDonalds fast food outlet on the corner of Oxford Street and Hanover Street.

Here residential values have “underperformed”; rising at a rate that is 10.2% below the average growth for all the W1 postcode districts (a growth rate of 30% compared to the average of 40%).

Other postcode districts centred on McDonalds fast food outlets in the central region were also reviewed, and some had pound per sqft growth figures (2007-2013) as low as 25%, which is 15% below the expected average.

Authors

HAVE YOUR SAY...

*

Related posts

Top