It has finally happened. Four years late and £4 billion over budget, the Elizabeth line, which runs across London and beyond from west to east, began operating today (24 May) promising to drastically improve travel across the capital and the South East.

According to data from CoStar, Cushman & Wakefield and JLL, the promise of the huge infrastructure project has already amounted to a huge win for commercial and residential property speculators, developers and owners around the new Elizabeth line stations. But the full impact on London and its real estate is only just becoming apparent.

The line is currently run in three sections, but when the sections are joined up in May 2023, it will pass through 41 stations and run for more than 100km – from Reading and Heathrow Airport in the west to Shenfield and Abbey Wood in the east.

It will service two stations in the Square Mile, Farringdon and Liverpool Street, with a train running in each direction every five minutes, and it will radically slash the time it takes to get from Heathrow to central London.

The City of London Corporation forecasts it will bring an extra 1.5 million people to within a 45-minute commute of the City.

Mark Stansfield, head of UK analytics at CoStar, says the Elizabeth line has had a transformative effect on London’s office market since construction work began on the line in 2009. "Developers and investors of all shapes and sizes have swooped on buildings and refurbishment opportunities within striking distance of the new stations in anticipation of steep rent and price hikes as completion neared. However, some areas have been far more impacted than others."

CoStar data shows that average office rents have soared by more than 70% in properties within a quarter-mile radius of Tottenham Court Road and Farringdon stations, previously less loved areas. Whitechapel and Liverpool Street have also recorded increases above the central London average of 47.6% over the past 13 years. Conversely, some areas along the route have been far less impacted, particularly Canary Wharf, where average office rents are only about 20% above their 2009 level, according to the data.

It’s a similar story for average office prices. Office properties within a quarter of a mile of Tottenham Court Road and Farringdon stations have registered price growth of more than 130% over the past 13 years.

Stansfield says buildings in these areas have also continued to attract value-add investors during the pandemic even as most investors have pivoted towards safer, well-let investments. "The area surrounding Bond Street Station has also outperformed the central London average in terms of price growth, with the likes of Canary Wharf and Liverpool Street seeing more modest gains during Crossrail’s construction.”

Cushman & Wakefield's analysis finds since the service was announced there has been huge office rental growth in London submarkets close to Elizabeth line stations, and they have outperformed traditional hubs like the West End and the City of London.

It has tracked the annual rental growth in different office markets across central London between 2008, when the-then Crossrail was first approved, to the present day.

Cushman says prime rents in Shoreditch and Clerkenwell, anchored by the proposed Square Mile stations at Liverpool Street and Farringdon respectively, during this period have risen by 123% and rents in Paddington have grown by 45%, whereas the City has seen increases of 21% and the West End only 2%.

The analysis finds that even after the global financial crisis, London submarkets surrounding new Crossrail stations saw the quickest recovery in rental levels. By 2012, prime headline rents in six of London’s submarkets had recovered to their pre-2009 levels. Five of these markets were served by future Crossrail stations.

Ben Cullen, head of offices UK at Cushman & Wakefield, says the correlation between outperformance and Elizabeth line stations is strong: "Shoreditch and Clerkenwell stand out with rental growth of 123% across this period. This rental growth has been driven by large occupiers, particularly in the tech sector – think Amazon, Tiktok and Snapchat –attracted to the rapid East/West connectivity delivered by the Elizabeth Line which overlays the pre-existing North/South transport infrastructure. Combined, this provides a broad catchment for talent – a factor that we expect will become increasingly important as people commute further to the office, but perhaps less regularly."

Cushman's Cullen says there are five reasons why markets recorded have outperformed, which need to be taken into context: "First and foremost is transport infrastructure and talent catchment. However, there also other important factors at play. Clerkenwell and Shoreditch benefit from being located on the periphery of the traditional city core but adjacent to amenity and night-life which is attractive to businesses that want to offer employees a vibrant place to work.

"These areas have also seen an office development boom, where developers have been able to deliver modern, large floor plate office accommodation but at a discount to the traditional office markets of the West End and City. It has been this office space and pricing which has been attractive to fast-growth tech companies that have congregated in these areas and encouraged further waves of creative businesses to follow."

British Land is one of the leading developers to have purposely assembled major assets on the Elizabeth line route: the Broadgate campus in the City, the Paddington Central campus in the West End and Ealing Broadway shopping centre.

Darren Richards, head of real estate at British Land, describes the opening of the Elizabeth line as a key milestone which allows businesses to widen their location searches to seek space that capitalises on this improved connectivity.

"Our portfolio is well-placed to benefit from the radically shortened journey times from west to east with our Broadgate and Paddington Central campuses and Ealing Broadway development situated at key transport hubs along the line."

He says the service is a "transformational event" for Londoners that is set to enhance millions of people’s lives.

"Journey times to work will be slashed, nights out in Central London will be more appealing and inner city shopping will become an even better experience. This will be the trigger for a much welcome great revival of our capital after COVID-19.”

Gerald Kaye, chief executive of Helical, describes the Elizabeth line as a "game-changer" for London.

"I don't think people appreciate how significant it is going to be and the quality of the service. Our £1 billion portfolio of sustainable, amenity-rich London offices, of which 99% by value are situated within a 12-minute walk of a nearby Elizabeth line station, will continue to benefit from their proximity to this new arterial route."

Kaye added: "We bought Barts Square in 2011 and 2012, for instance, with Crossrail on the horizon."

Ker Gilchrist, managing partner for Welput at BentallGreenOak, said: “I stepped off the train in Paddington this morning at platform one looking into the landing area and I reckon it was 30 deep of people, maybe because it is so overdue. I am convinced it will drive a massive change. The stats about the reach to more people it will create, it is huge. London has gone from being two central business districts to being a linear CBD and we are very excited about what it means for Farringdon for instance. For each building it is different, but the reason we restructured in 2014 was in large part to focus on London and the new opportunities the improved infrastructure and transport was bringing.”

Brian Bickell, chief executive of Shaftesbury, which owns around 16 acres of the West End's main retail and restaurant offer, is upbeat but a little more sanguine about the immediate effects. "Realistically we only have the middle section of the line working now and even then people will have to get used to having it. I don't take it for granted but you won't really notice its effect for a year or two."

Nevertheless Bickell added: "“The opening of the Elizabeth Line is a game-changing event for all of London and especially the West End, adding vital capacity to the network, improving connectivity and changing footfall patterns. Once the full service is running, we will wonder how we ever managed without it. It’s a feat of engineering to be proud of…now let’s get on with Crossrail 2.”

Cushman's Cullen says the impact on capital values is also evident already.

"Investor sentiment is generally aligned with that of occupiers. In the case of the Elizabeth line this is no different, with investors attracted to the strong fundamentals of location, local amenity and building quality, but with the additional attraction of the prospect of long-term rental growth. In the long-term and, now that the Elizabeth line is to be open and operational, we expect to see a continued positive influence on rental and capital value growth across its route."

On the part of the line that stretches out to Reading, about 40 miles west of London, the impact has been held back by the delay in finishing it, but that is expected to change.

Charles Dady, international partner and head of Cushman & Wakefield's South East office agency team, says: "Given the lengthy delays the market had tired of talking about it but now it's finally here, we are expecting it to have the positive impact on the Thames Valley office market we were all anticipating, particularly Reading and Maidenhead. Its long-overdue completion comes at a good time for occupiers as they encourage their staff to return to the office."

The data for residential pricing is equally positive. Rightmove’s latest Elizabeth line study reveals asking prices have more than doubled over the past decade in the local areas around Maryland, Abbey Wood and Stratford stations.

JLL research shows that the price of homes surrounding 76% of Crossrail stations have outperformed the wider market over the period 2012-21.

It says that between 2005 and 2009, when buyers were hoping to capitalise on lower prices and higher growth, the average increase of property values across all stations was 15%. At the beginning of government consultation on the project, between 2005 and 2009, 20% of properties along the line saw higher house price growth than the regional average.

Between 2012 and 2021, average property values rose 73% in the areas surrounding Crossrail stations, which JLL says is 19 percentage points higher than the growth seen across London. Eighty-four percent of stations recorded higher house price growth than their regional average.

At the top of the list, properties located near Forest Gate have outperformed the regional average for London over the period 2012-21, with growth 67 percentage points higher.

Large premiums over regional averages are found along the eastern lines too. Harold Wood, the last eastern station before the M25 arterial motorway, saw prices go up 86%, while the regional average went up 54%. And to the west, over the past decade, house prices in the Berkshire town of Slough have increased by 25% more than the regional average.

So will the growth continue?

Senior research analyst at JLL, Meg Eglington, says as the Elizabeth line nears completion, residential areas at stations along the line have "re-emerged on people’s radars, shorter commute times meaning areas previously less well connected can now compete with higher value commuter hotpots". She expects property values to continue to benefit for "years to come”. 

Nick Whitten, the head of UK living research at JLL, points out that thousands of homes between Acton and Southall in west London would have not been built if it were not for the project, with investors piling in despite the many questions about its viability and arrival.

“In hindsight it’s actually a miracle that Crossrail is happening," he says. "It started just after the greatest economic crisis in recent history, and is now being opened after a terrible global pandemic."

The City of London Corporation contributed £200 million towards the Elizabeth line. Its Lord Mayor of London, Vincent Keaveny, said the opening is a major boost for the Square Mile and London.

“Its introduction will support the capital’s recovery from the coronavirus pandemic and provide much needed capacity on our busy public transport network.

“A world-class public transport system is vital to support the return of workers to the City. The improved connectivity offered by the Elizabeth line will also make it easier than ever for people to visit the Square Mile and enjoy everything we have to offer."

Dissenting voices will argue the capital and the South East are once again benefiting from massive infrastructure investment at a time when the government is promising to "level up" the rest of the country. As Bradford Labour councillor Si Cunningham told the Architects' Journal after the government scrapped plans for a new station in his city: "Crossrail is the most marvellous feat of engineering that you’re likely to witness. It will be great for east London and lots of London communities that have been left behind. I don't think many people [in Bradford] resent that or that Londoners have had the gumption to [achieve] that. What we resent is the lack of ambition for Northern cities."

But if the Elizabeth line has the expected impact, politicians in Manchester, Birmingham, Cardiff, Edinburgh and across the country will have the proof they need that investment in massive transport projects - such as the High Speed 2 line - is worth it.