That’s according to a new survey by property specialist Wetherell, which has analysed the interplay between restaurants and residential property values, specifically in London’s West End.
Wetherell looked at the 295 individual restaurants and fast food outlets in the area and analysed the performance of residential property values in the postcode districts immediately surrounding them.
Mayfair, which has the highest property values in the West End, has the highest number (20) of Michelin-starred restaurants in the area (69 per cent of all Michelin-starred West End outlets) and 65 other restaurants. It boasts a host of famous high-end eateries including Le Gavroche, Scott’s, Maze, 34 and Nobu.
Crucially, there are no high-street-chain fast food outlets in Mayfair and only two on its southern (Piccadilly) and northern (Oxford Street) borders.
In contrast, Fitzrovia and Soho have the lowest property values in London’s West End and also have the highest number of fast food outlets - 14 in Fitzrovia and 18 in Soho (representing 33 per cent and 42 per cent of all West End fast food outlets respectively). There are just two Michelin-starred restaurants in Fitzrovia and two in Soho, with other restaurants totalling 13 and 74.
Richard Caring, chairman of Caprice Holdings which owns the likes of Scott’s, 34 and The Ivy, said: “A great restaurant like Scott’s or 34 has the power to make an address famous and turn it into a destination. Part of the reason why people choose to live in London’s West End is because of the superb restaurants and private members clubs on their doorsteps, which benefit the local housing market - it’s a win-win for all concerned.”
Wetherell’s managing director Peter Wetherell added: “There are plenty of examples of how good restaurants have transformed an address and helped resi-values increase dramatically.
“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 per cent 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 sq.ft - it has just resold for £4,000 per sq.ft.”
Wetherell, which conducted the survey in collaboration with Dataloft, also analysed residential property values at a more local level (postcode districts) for flats located around different restaurants and fast food chains. It looked at current average value, 2007 average value and uplift over time. Again, the interplay found at the district level is repeated, and is even more striking when analysed at this micro-level.
W1K (which contains Scott’s and Le Gavroche), for example, has seen residential values grow by 61 per cent between 2007-2013 - just over 20 per cent above the average growth rate for the W1 postcode districts.
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 per cent below the average growth for all the W1 postcode district.
“None of our clients would dream of living above or next door to a fish and chip shop, but when that fish bar is Scott’s, it’s the complete reverse,” added Wetherell. “Likewise, we would never promote the fact that a property overlooked a pub or nightclub, however a flat overlooking George or Harry’s Bar is excellent brand association, a good location made even better.
“Whilst there are no fast food outlets in Mayfair, we do have a hamburger bar; it’s called the Hard Rock Café, and its known around the world for its quality.”
For copies of reports, visit www.wetherell.co.uk.