The London Underground, also known as “The Tube,” has been providing rapid transit to Londoners since 1863. This system has been instrumental to the growth of the economy and population of this city.
Today, there’s another new rail project in the works to add more capacity to the system. The project is called Crossrail, and the idea is to make Central London more accessible.
This project is about four years away from being finished and will cost £15 billion ($24 billion). Although the price is high, so are the returns for people and businesses.
This line will connect isolated parts of the city with its center. It is expected that Crossrail could bring as many as 1.5 million people into the heart of London.
As noted in a report in Bloomberg, house prices near Crossrail stations have gone up 30 percent since 2008. In the report, Grainne Gilmore of Knight Frank U.K. residential research says prices are projected to go up another 40 percent in the next five years.
How is Crossrail going to offset some the huge rail development costs?
With what else, real estate! According to the Bloomberg report, “Crossrail purchased a lot of land for their stations which makes them one of the largest property developers in the city. They plan to develop these stations which are expected to create 2.3 million new square feet for shops with built in foot traffic. These prime locations are expected to help Crossrail earn approximately £500 million ($800 million).
In real estate, it’s always location, location and location.
John Hunt is conference program manager with Institutional Real Estate, Inc.
