Creative spaces increase residential property value

The presence of creative workspaces boosts residential area values, revealed the latest study commissioned by Creative Land Trust, in collaboration with Get Living and Creative Estuary.

The research used house price data in various locations, recognised as clusters of creative workspaces, and analysed over various timeframes in order to identify the level of outperformance in house price data relative to the wider market.

It focuses on case studies of creative clusters in London and the Thames Estuary, and standalone schemes where creative workspace had been included in a residential scheme, such as Bow Arts in Royal Albert Docks.

The author team for the report comprise Hawkins/Brown, Dataloft and Ramidus Consulting.

Over a 10-year timeframe, values in creative clusters outperformed the wider London residential market by 4.4% per annum on average, ranging from a high of 10% pa in London City Island through to 2% pa in Hackney Wick and Fish Island.

The outperformance in residential values is comparable to the local economic effect associated with large-scale urban regeneration, green or blue spaces, popular schools, or certain grocery stores being adjacent to homes.

The study also highlighted that creative workspace as a ground-floor use in a residential development does not introduce any additional risk and can increase investment value where there is a good covenant and secure long-term income (or a long leasehold sale).

It found that professionally managed creative workspaces could be a more viable option than other commercial uses, as they offer long-term secure income.

Gordon Seabright, chief executive at Creative Land Trust, said: “The ultimate purpose of this research study is to help expand the provision of affordable workspace for creatives by presenting developers with evidence to show that creative workspace can make an important contribution to financial value in a residential-led development.

“This relationship is not hard to verify but there are of course a multitude of factors that influence house prices. 

“What this research does is translate the widely acknowledged ‘soft value’ of creative space into a ‘hard value’ that can be accepted by investors and developers for use in evaluating development opportunities and encourage them to re-examine the risk-return trade-off of creative workspace as a ground-floor use.”

Emma Wilcox, project director at Creative Estuary, added: “It has long been acknowledged that cultural and creative industries can bring vibrancy and economic growth to an area — in many cases, this growth has been organic. 

“Creative people seeking affordable workspaces often found them in old industrial land on the city fringe, in places like Hackney Wick or Woolwich Dockyard in London, or in areas with the lifestyle appeal of heritage, natural landscape and more affordable property, including in Southend and Margate in the Thames Estuary.

“Clusters of creative space over time gained critical mass and recognition; successful places attract demand for housing and, in a market economy with constrained supply, demand almost inevitably translates into rising property values, which has the potential to displace creative workspace and disrupt creative communities. 

“Through our work at Creative Estuary, we are exploring new models and partnerships to ensure our industry continues to thrive.”

Ailish Christian-West, director of real estate at Get Living , commented: “There is widespread understanding that the presence of creative workspace in a community has an impact on the long-term success of a place and therefore an implied contribution to value, but isolating and quantifying the specific financial value that can be traced back to this reality is hard. 

“Get Living has long understood this value, which is why we invest in creative spaces at our neighbourhoods, such as The Lab in East Village.

“For other developers to be encouraged to make creative workspace part of a scheme, evidence — such as that set out in the Creative Land Trust’s research showing how values can outperform over the longer term — is useful.”

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