Property developers are hoping that the next area to take off in London will be the South Bank, where the London Eye is located.
The area is already a popular cultural and tourist hub, drawing about 22 million visitors a year to nearby sights such as The Shard, Tower Bridge and the Tate Modern art museum.
It is also swiftly becoming one of the most in-demand pockets of land for prime residential development, said property consultancy CBRE in a recent report.
Limited supply in traditionally prime locations such as Mayfair, Belgravia and Knightsbridge has caused demand to spill across the River Thames.
About £2.3 billion (S$4.6 billion) has been pumped into development deals on the South Bank over the past six years, said CBRE executive director Peter Burns. This made up a solid 10 per cent of the central London market over that period.
"Throughout this period, the proportion of deals happening on the South Bank has been increasing, reflecting the growing acceptance of the area amongst developers who can build at scale," he added.
Overseas investors also have their eye on the district.
A Malaysian consortium is redeveloping the iconic Battersea Power Station on the South Bank. Malaysia's state pension fund, the Employees Provident Fund, owns a 20 per cent stake in the US$12 billion (S$14.9 billion) project.
Chinese conglomerate Dalian Wanda bought the site of Market Towers in June this year, also on the South Bank. It plans to spend £700 million on a 62-storey luxury hotel and apartment building on the site, according to media reports, which could become the tallest residential building in western Europe.
As the South Bank's star rises, home prices have shot up. The average price for a newly built apartment has rocketed 160 per cent from £500 per sq ft (psf) in 2008 to £1,300 psf, CBRE said.
CBRE residential managing director Lisa Hollands said sharp price increases were also seen for properties in the heart of the South Bank between London Bridge and Waterloo, which regularly notch up prices of more than £1,800 per sq ft.
Still, demand remains fairly healthy. More than 60 per cent of apartments under construction on the southern fringe of the river have been sold before completion, said CBRE residential chairman Mark Collins, who added: "We can expect this trend to continue."
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