A London developer plans to build the tallest residential tower in the U.K. on a site in the city’s Canary Wharf area.

Ryan Corporation U.K. Ltd. paid 100 million pounds ($160 million) for the site of the proposed skyscraper, the closely held company said yesterday in an e-mailed statement. The 242-meter (794-foot) high tower would be the tallest in London’s second-largest financial district and the apartments would have a total value of more than 1 billion pounds when it opens in 2018.

Luxury homes in central London have been the best-performing part of the U.K. property market since at least 2009. Prime residences in the U.K. capital have risen more than 60 percent from their low that year, according to broker Knight Frank LLP.

“Londoners are used to office buildings going up and coming down every 20 years or so,” Richard Berridge, chief operating officer of Ryan Corporation, said in the statement. “This doesn’t happen with residential towers” as they need to be “more enduring,” he said.

Ryan has planning permission for a mixed-use development on the site of about an acre, according to the statement. Ryan will apply to the local government for permission to build the residential tower, named Herstmere, at West India Dock Quay.

Tallest Residences

Berkeley Group Holdings Plc (BKG)’s tower at One St. George Wharf is currently the U.K.’s tallest residential tower at 181 meters, according to Knight Frank. While apartments in London’s Shard skyscraper are higher, the building consists mainly of offices, a hotel and restaurants.

More than 250 million pounds had been spent on land for homes in Canary Wharf and the surrounding area known as London’s Docklands this year, and an additional 2 billion pounds must be invested to pay for the planned projects, Chicago-based broker Jones Lang LaSalle Inc. said in an Oct. 8 report.

Oxley Holdings Ltd., a Singapore- based property developer, plans to build 3,400 homes at the Royal Docks after agreeing to buy a 40-acre site from Ballymore Properties Holdings Ltd. for 200 million pounds on Nov. 1.

To contact the reporter on this story: Patrick Gower in London at pgower@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman atablackman@bloomberg.net