The Company That Reinvented Albemarle Street Is On A £10B Retail Push
It is unprecedented in modern times. Patiently, almost stealthily, property company Trophaeum Asset Partners bought up the majority of Albemarle Street in Mayfair, giving the company control of part of London’s fanciest postcode, something rarely seen outside of the landed estates. And then it set about reimagining it.
The quietly audacious strategy has paid off for Trophaeum, the London-based company that has bought high-end retail assets in London and beyond on behalf of wealthy private investors.
But after this low-key play, it is now making a bigger noise, as it looks to bring in new investors and buy up to £10B of retail assets across Europe. Bisnow spoke to Directors Matt Farrell and Jared Hart about the strategy for Albemarle Street, and where else Trophaeum plans to buy.
Albemarle Street has an amazing history. First built in the 1690s, it is the home of the Royal Institution, the spiritual home of British Science for more than 200 years. The lectures given at the RI were so popular that Albemarle became London’s first one-way street, to manage the flow of carriages arriving there. John Murray, Lord Byron’s publisher, had an office there, and Oscar Wilde got into the row that resulted in his imprisonment at the Albemarle Club. Thomas Huxley, one of the earliest supporters of Charles Darwin, held a dining club on the street.
But despite this history, and its location in the heart of Mayfair parallel to Old Bond Street, by the early 2000s it was somewhat underused compared to neighbouring streets, and largely ignored by the best retailers and restauranteurs in the UK capital, with the exception of the famous Brown’s hotel. It was mainly populated by small, empty art galleries. Rents were about a quarter of those on Bond Street on average.
Enter Trophaeum, which over a period of several years bought up 70% of the buildings on the street, essentially giving it control of most of the assets and allowing to implement a cohesive asset management strategy. And while no street in Mayfair was really that bad to begin with, the change has been stark, and there are lessons to be drawn for high streets outside of the purple bit of London’s Monopoly board.
“Albemarle Street is not as prime as Bond Street, but we looked at it and thought, fundamentally this is a good street,” Farrell said. “We looked to change the mix and introduce more leisure, restaurant and lifestyle brands, and make it a high-quality experience for the people who visit and work here. Fast forward a few years and everything has been elevated.”
With that in mind, one building has been turned into Oswalds, a private members club run by Robin Birley, the man who set up celeb haunt 5 Hertford Street, which opened in 2018. Chilean restauranteur Juan Santa Cruz opened Isabel, giving the street a destination restaurant.
Other leisure operators are buying into the idea of the street as a luxury destination. LVMH is opening a £500M Cheval Blanc hotel near the intersection of Albemarle Street and Grafton Street, and Ennismore is opening a London outpost of famous Scottish hotel Gleneagles almost right next door.
“These are the kind of brands we are trying to align ourselves with, and we think they are confirming the foresight we showed in the area,” Farrell said. “They are making big investments in experience in the area.”
Farrell said one thing that sets Trophaeum apart from most investors is that it undertakes its leasing in house, with a 25-strong leasing team, rather than outsourcing it. He said this gives it strong relationships with luxury retail brands.
And as well as improving the leisure presence on the street, Trophaeum has improved the quality of the retail tenants. In 2015 Alexander Wang opened its first European store on the street, and fast-growing brands Thom Browne and Self-Portrait opened their first stand-alone UK stores there.
Late last year Givenchy opened its first UK store on Albemarle Street. This year Cartier is knocking through its Bond Street store to create an entrance on Albemarle Street, and Moncler will also be opening a store there.
“Some of these retailers have a slightly lower price point, but they are still luxury,” Farrell said. “People said these retailers wouldn’t come here because they need to sell five dresses a day rather than one, and the street doesn’t have the footfall. But we’ve shown that isn’t the case.”
According to Trophaeum’s website, rents on the street have increased from an average of £150 zone A to more than £600 zone A in the past three years.
“We knew that if we had a holistic plan and improved the overall experience of the area, people would pay rents that they’ve never paid before.”
That holistic strategy extends to holding meetings for the retailers on the street, allowing them to come together to share ideas and make suggestions for further improving the location.
There are other clever moves. Trophaeum opened the first Global Blue tax-free shopping lounge in Mayfair, one of those places that tourists can go to reclaim VAT on purchases made while on holiday. Rather than just a kiosk, tourists can have a coffee or a glass of Champagne while they wait for their refund, and it draws a large number of wealth shoppers to the street; more than 11,000 people have used the lounge since it opened in 2018, and the average amount they have spent shopping in London is £838. They walk out the door with on average £102 refunded and the opportunity to spend that free money nearby.
It is unlikely that Trophaeum will be able to exactly repeat the strategy it has utilised on Albemarle Street in its new investment push, which will target London, Paris, Milan and Rome, the Nordics, Barcelona and the bigger German cities. But it will continue to look for luxury assets with an angle and try and buy off-market to reduce competition, Hart said.
“We have had a lot of investors asking us how they can get access to [the] kind of deals that we do: off-market deals where the value hasn’t already been taken out,” he said. “There is a huge demand for these kinds of high-end urban hotels, restaurants and luxury retailers, and these investors just can’t access them.”
He said Trophaeum would create joint ventures for individual assets and also look at the possibility of a fund.
Hart said the firm is still keen to invest in London — as well as Albemarle Street it owns assets on New Bond Street, Stafford Street and in St John’s Wood.
“We still believe in London in the medium to long term, and experiential retail is still proving very resilient,” he said. “We have our retail management group, and they are still feeling pretty good about the world, in spite of all the political turmoil.”
He added that prices have not really changed in London in spite of the lack of investor interest in the retail sector, but he feels that might change soon.
“Two and a half years ago I was saying to people that a huge storm was coming in the shopping centre market, and it didn’t happen for a year and then the storm broke,” he said. “I’ve been saying for a year that opportunities are going to come through in London, and I hope I’m just a year out again.”
Trophaeum has shown it can be patient.