• Fraser Slater

Capitulation on St George’s Hill Points to a Bottom in Prime Markets

Updated: Nov 22, 2018


“Be greedy when others are fearful” Warren Buffett


It is often said that capitulation is a gilt-edged signal of a market bottom and one often used by some of the world's greatest investors. Four years on from the market peak and after 20%+ declines in the Prime London and South East property markets, Ludgrove has been privy to a number of capitulations and distressed sales.


Recently a 16,000 square foot, new build luxury mansion set in 1.1 acres on the exclusive St George’s Hill private estate with access to one of England’s finest golf and tennis clubs exchanged hands for £4.6m. A huge amount of money of course, but when one considers that the same property would have commanded around £13m in 2014, one can appreciate the scale of the opportunity available in the Prime London and South East property markets today.


Luxury new build mansion in St George's Hill sold for £4.6m approximately £8m below its 2014 value. Image: Savills

Looking at this transaction in detail, the price paid by the new owner equates to £287 per square foot comfortably below the build cost, implying the 1.1 acres of land in prime St George’s Hill had a negative value! Further similar properties on the Estate have rented for around £7,000 per week (£360,000 per annum), meaning if the new owners chose to let a rental yield of 7.8% could be achieved (£360k on £4.6m value). Such a rental yield is more than double the yield achievable on St George’s Hill in 2014 and would rank amongst some of the highest yielding regions in the UK.


The property was sold with the following specification:

  • 16,100 square feet.

  • 1.1 Acre plot.

  • South West facing.

  • Situated in St George’s Hill private estate with 24-hour manned security entrance.

  • Leisure complex on lower ground floor with indoor swimming pool and cinema.

  • 6 en-suite Bedrooms.

  • Separate staff accommodation.

  • Luxury fit out: bespoke kitchen, Gaggenau appliances, marble bathrooms, underfloor heating, ceiling speakers etc.


Luxury kitchen with book-matched statuario marble floor. Image: Savills

If you’d like to discover similar distressed property opportunities in the Prime London and South East property markets, please get in touch with Ludgrove Property. We have access to a number of outstanding opportunities.

Fraser Slater


Ludgrove Property

43 Berkeley Square

Mayfair

London W1J 5AP

Tel: 0207 889 2860

Email: info@ludgroveproperty.com

Web: www.ludgroveproperty.com


Disclaimer: Ludgrove Property Limited is not authorised or regulated by the Financial Conduct Authority (FCA) and we do not provide any financial or investment advice.  We recommend that any property investor seeks appropriate professional advice before entering into any contract, and we would also advise that the value of any investment can go down as well as up and that you might not get back what you put in. You may have difficulty selling a property investment at a reasonable price and in some circumstances it might be difficult to sell at any price. We would urge you not to invest unless you have carefully thought about whether you can afford it and whether it is right for you, and if necessary to consult with a professional advisor in accordance with the Financial Services and Markets Act 2000. All information is provided strictly as a guide only, is subject to change without prior notice and does not constitute an offer of investment. This website should not be regarded as an offer or solicitation to conduct investment business, as defined by the Financial Services and Markets Act 2000. Investors who are resident in or citizens of countries other than the United Kingdom may be subject to local restrictions. In particular, no offer or invitation is made to any US persons (being residents of the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof), who are excluded from the services offered in this site. The information on this website has been obtained from sources which we believe to be reliable and accurate, but without further investigation this cannot be warranted.

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