demand for quality property
Can prime residential property
underpin the growth of
capital funds?
While a treatise on the economics of the UK property market may provide filler content
for an otherwise ‘quiet’ edition of Newsnight, there is nothing quite like a view from
the ground level to establish whether the theories stand up in practice. If prime
residential property is regarded as a potential investment fund asset, then the most
accurate view of the sector must be formed by the estate agents and consultants
who handle the sale of such homes on behalf of developers on a day-to-day basis.
The greater the certainty that the demand for Tim Garbett is a Partner based at Knight Frank’s
premium property will remain strong, the Esher office. He has been tracking conditions
more likely it is that money invested in devel- there for more than a quarter of a century and
oping new sites will generate the high levels is well placed to report on changes. “It was
of return demanded by the investment funds. not uncommon for purchasers to move into
We turned to members of the UK-wide the area to buy a two-bedroom terrace house
Knight Frank partnership of estate agents and or a flat, with the intention of progressing
property consultants for their understanding through a three-bedroom detached property
of this premium tier of the residential market- and then on to one of the private estates,”
place. Over the years, however, the demographics
There is a concentration of such property, of the Golden Triangle have changed, with a
for example, in an area just inside the M25 in growing number of executive families from
Surrey, and which is often referred to as the continental Europe, the US and the Far East
‘Golden Triangle’. It is defined by the three buying homes there.
almost adjacent communities of Cobham, St “The international community has grown to
George’s Hill and Esher, the point where it accounts for about 50% of
The number of existing properties and new all the property enquiries for prime residen-
builds constructed to a high specification in tial property coming through our local offices.
that triangle– and with price tags which re- London is as little as twenty minutes away by
flect that fact – makes development there a train, while Gatwick and Heathrow are within
natural target for specialist property funds. easy reach.
They can leverage from the profit which the “The attraction to the senior executives who
developers are almost certain to generate in are keen to move into the area is increased by
such circumstances. its infrastructure, which includes including
There are, of course, other parts of the UK leading international schools and superb golf
where there are significant concentrations of courses.”
‘prime’ residential properties, but this part of The lure of the Golden Triangle in good eco-
North West Surrey claims a portfolio of features nomic times is obvious, but the recession must
ensuring that property values are more resilient surely have had an impact on demand for
to economic fluctuations than elsewhere in the prime residential property. Closer examina-
UK. It is therefore a good place to start. tion of price movements in the area reveals a
48
The Informed Executive
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