Hot Spot: the City of London

The City means business.

The Bermuda Triangle is a geographical abstraction in which ships disappear, supposedly in mysteriously high numbers. Allow me to introduce the CityGate Triangle - an area of London which connects the Tower with Monument and Liverpool Street stations, and encompassing Billingsgate, Broadgate, Aldgate and other assorted gates. This is an area that many residential buyers overlook, considering it exclusively commercial. In fact, it contains a substantial number of residential developments, many of them modest in size and reputation, and some in surprising locations. Marldon's handsome 49 Monument Street, for example, is in the shadow of The Monument itself.

The Bermuda Triangle is a geographical abstraction in which ships disappear, supposedly in mysteriously high numbers. Allow me to introduce the CityGate Triangle - an area of London which connects the Tower with Monument and Liverpool Street stations, and encompassing Billingsgate, Broadgate, Aldgate and other assorted gates. This is an area that many residential buyers overlook, considering it exclusively commercial. In fact, it contains a substantial number of residential developments, many of them modest in size and reputation, and some in surprising locations. Marldon's handsome 49 Monument Street, for example, is in the shadow of The Monument itself.

The credit for reshaping this part of London usually goes to the Luftwaffe, but the area has a long history. The Monument commemorates the Great Fire of 1666, while 300 years earlier, Mr and Mrs Chaucer looked here for a des res in whichto raise little Geoffrey.

The technological demands of modern buildings are among the forces propelling changes today, the buildings themselves being subject to political, structural and financial consideration. The attitude of local planners and the relative value of commercial versus residential properties also count.

"The very large City office-toresidential conversions, such as the Lexington, have stopped, but small office blocks are not efficient commercially and they will continue to be converted for residential use," says Frank Harris, a local estate agent. "The large commercial properties, though, will remain commercial. And it will probably stay that way for the indefinite future unless commercial property declines catastrophically."

Tim Craine, of the firm London Residential Research, says that "some office buildings do not have the floorplate for modern offices". Similarly, some flats are being sold with awkwardly placed columns or other structural features.

With its transient workforce, the City has always attracted investors; international property consultants Knight Frank monitor local rental values for them. In the company's 1999 review, Knight Frank partner Robert Orr-Ewing found "a glut of properties to rent", particularly smaller units. "And there's been a weakness in demand which resulted in no significant rent increases," he says. "A large number of people invested in rental property with the result that supply went up by 50 per cent as demand weakened. The City saw a number of international mergers and acquisitions and this has meant some international corporate tenants have been sent home. Since September we've seen supply being used up at the top end of the market. Larger three- and four-bedroom properties are scarce.

"We believe balance will return to the London rentals market - it's dependent on the City, and the City is healthy and optimistic. It looks as if the market will firm up and start growing modestly, perhaps by up to 5 per cent for the best properties."

The Low-Down

Transport: If you must be near Gatwick or Heathrow every day, then Crawley and Hounslow are for you. But if you have an equal-opportunity attitude towards the four airports, the City is roughly equidistant to all, including Stansted and London City.

  Aldgate Triangle: The Ballymore development designed by architects CZWG (Campbell Zogolovich Wilkinson Gough) is on Commercial Road, E1, near Aldgate and Aldgate East tube stations. Included are 10th-floor roof deck, private gym and fitness centre. First release was in October with prices from £125,000, and two-bed flats are being advertised at £199,000.

  Quiet neighbours?: The Lexington on City Road has virgin and second-hand units, including a two-bed duplex for £255,000. The sales bumph claims proximity to the Honourable Artillery Company grounds, but the true next-door neighbour is the Bunhill Fields cemetery.  

The Blues : East of Citygate Triangle are two developments in E1 with a "Blue" tag. Laing's Blue House is on Calvin Street and consists of 22 flats, nine of which are live/work units, all between £175,000 and £200,000. Copthorn's Blue Gate Mews on Cable Street near Shadwell station has 16 residences - 14 two-bed flats and two three-bed maisonettes - in two Georgian-style buildings. It is in the St George's Town Hall conservation area, next to Hawksmoor's St George in the East. Prices from £160,000.

Spitalfields: The former wholesale fruit and vegetable market now hosts a posh retail market, weekdays (11.30am-3.30pm) and Sunday, with locally-owned stalls selling organic food, second-hand books and records, antiques and new and used clothes. Permanent traders include Frockbrokers (end-of-line designer wear from London Fashion Week), Immaculate House (bathrobes, soap, etc), Queens (camp costumiers), and Stagestruck (fancy-dress hire shop).

  Eastern cuisine: Spitalfields' many eateries include Meson Los Barriles, Pizza Pomadoro, Café Mediteraneo, Canadian Grill, Ploy Pilin, Arkansas Café, Sweet Basil, Thai Hut, Csaba's Delight, Pacific Paradise, and Tandoori Hut.  

The judgement of Salomon: A recent Salomon Smith Barney property industry report notes that "commercial demand is healthy and the speculative development pipeline remains limited". In the City of London there is estimated to be 7.6m sq ft of active demand for office space. Against this there is just 5.6m sq ft of available space (of which around half is classed as Grade A quality) and while there is 6.6m sq ft of office under construction, nearly 65 per cent is committed.'

  Do you live in the City?: In their most recent report, London Residential Research notes that planning permission was granted for 335 residential units during the first half of 1999 but "nearly all these units relate to applications made during 1998, and new residential applications have become a rarity". LRR does not think that this slowdown heralds the end of the City's brief flirtation with residential. But the rate of residential development will slow for at least a year or two.'  

Mammon and Milton: The 17th-century non-conformist Bunhill Fields cemetery landed the remains of John Bunyan, Daniel Defoe and William Blake before giving up its own ghost in the early 1850s. Bunhill Row was the stomping ground, for a time, of John Milton, who is spending eternity in the nearby St Giles Cripplegate. Chaucer's tomb is in Westminster Abbey. He was born in 1340, give or take a few years, and died, we can say this year, precisely 600 years ago.

  Contacts: Aldgate Triangle, 0700 070 1701; Copthorn Blue Gate Mews, 01277 262422 or selling agents Hadley Cooper Associates, 020 7363 1144; Frank Harris, 020 7600 7000; Hurford Salvi Carr, 020 7250 1012; Laing Blue House, 020 7375 1646: Stirling Ackroyd 020 7729 7763.