19th May 2022

London and South of England Property Company Is Spreading Its Wings Across Three Business Strands

Martin’s Properties, the London property company focused on the South of England including a large part of Chelsea, has signed French fashion retailer IKKS for its second UK store, at 109 King’s Road, London, CoStar News can reveal.

Completion of the 10-year lease comes as the group prepares to diversify via a £90 million investment drive across the three strands of its business, managing director Richard Bourne said in an exclusive interview with CoStar News.

The IKKS store, which will open in June 2022, is part of IKKS’s global expansion plans and follows a first letting on Carnaby Street. The store will hold UK exclusives, and include a showcase of the brand’s “Free the Sea” collection, a sustainable range made using recycled plastic waste from the sea with proceeds going to The SeaCleaners NGO, a feature Bourne says was critical in choosing the retailer for the space.

Martin’s Properties bought the unit from the Eyre Estate in 2020, which meant it was able to take full control of the adjoining King’s Road and Radnor Walk block on the famous west London thoroughfare.

It has since redeveloped the site to provide a double frontage retail unit to the ground and lower ground floors, and create a separate access to a new residential maisonette on the upper floors. The retail unit has been designed to include a lounge area, as well as in-store brand activities, including style sessions, talks and personalisation.

Brook Stotesbury, head of commercial asset management and investment, said in a statement that footfall to the King’s Road continues to outperform many high streets across London due to the affluent residential population, high-profile workforce and returning international tourists. He adds that the focus for the King’s Road retail portfolio is to attract best-in-class fashion retailers whilst increasing dwell time by curating a mix of retail, leisure and food and beverage operators.

Ludovic Manzon, the IKKS group’s CEO, also said in a statement that the King’s Road is a perfect location to launch its second standalone store in London, as it is key shopping destination and where its target customers are shopping.

“This will allow us to showcase our women and junior collections and to create an exciting space for our customers to immerse themselves into IKKS Paris. We are pleased with the response to our recent new standalone store openings in China and Madrid. This gave us the confidence to expand to additional markets in which we were seeing existing demand for IKKS Paris. King’s Road follows the Carnaby opening and we are excited about the next chapter in the brand’s growth strategy.”

Bourne says Martin’s commitment to the King’s Road and its ESG agenda means it is seeking ways to preserve the special character of the King’s Road and improve the experience for consumers and visitors. It wants to work with brands who share “our vision and values in improving the heritage, culture, and community of the area to ensure that it remains relevant and vibrant”.

Savills acted on behalf of Martin’s Properties and Thomas Pain & Company acted for IKKS.

Martin’s Growth Plans

Martin’s Properties is a private family concern formed 75 years ago to focus on landholdings in prime Chelsea in west London.

It has been diversifying and expanding into other geographies, sectors, and business areas in recent times, particularly since Bourne left RO Developments to take over as managing director four-and-a-half years ago. It was the first time in the company’s history it has been headed up by someone outside the Martin family.

Bourne says it has built a £350 million portfolio via a continued focus on its long-term prime Chelsea residential and retail holdings but increasingly via investment across the South of England into offices, retail, industrial and hospitality.

“There are three strands to the business now. The investment arm with around 70% focused on Chelsea. Then development, where we can target higher yielding property, and finally our financing business, which focuses both on our investments and also on third-party lending. We are very close to completing our first third-party loan, focusing on property backed assets always that we understand.”

The change in direction has seen Martin’s buy a variety of South of England assets – offices in Sevenoaks and Oxford, a retail park in Didcot and high street retail in Guildford.

While it appears disparate there are common threads. “We have found these assets have been performing really well for us,” Bourne says. “In part our investment strategy responds to the change in use classes under the Class E legislation. It has provided that extra optionality which means we can invest where we believe in the strength of the underlying location and infrastructure for alternative uses.”

To underline its ambition Martin’s Properties completed five acquisitions with a combined value of £28.5 million earlier this year targeting locations which are benefiting from high levels of inward property and infrastructure investment.

Travelodge Seafront Hotel in Bournemouth was bought from Aviva Investors (Staff Pension Trustees) for £9.31 million; Goldvale House in Woking, a multi-let town centre office, was bought from AEW (Nuclear Liabilities Fund) for £5.825 million (8.5% net initial yield); The Waitrose on Wallingford Road, Wantage was bought from LaSalle Investment Management (Total Energies Pension Trustee UK) for £11.62 million; and lease acquisitions were completed on two apartments in Whitelands House, Chelsea, where both have the potential to release marriage value from existing ownership and drive capital growth through high-quality refurbishment.

Bourne says the group now has £90 million set aside for more for of the same. That includes a rolling programme of capital recycling and additional refinancing providing £50 million of cash.

The group is targeting a mixture of core income with growth potential through retail price index-linked reviews and value-add potential through direct asset management.

Bourne says in particular the group wants to buy property that can rely on its in-house development and asset management expertise.

As an example Martin’s has recently launched 9,000-square-foot Chelsea commercial space Radnor Studios.

The scheme comprises offices arranged over three floors. It was home to The Chelsea Pottery in the 1960s, but until recently was used as coworking offices. The property has been redeveloped by Martin’s into a headquarters building with a Class E planning consent and can be used as offices, gym, retail, restaurant, education, creche and medical or health services.

Bourne says the development is a great example of our “in-house capabilities as we look to acquire further opportunities that will allow us to utilise our full in-house development and asset management expertise to further drive capital value growth”.

Bourne also confirmed the group is also planning to work with joint venture partners, either as an asset manager of the other party’s real estate or via joint equity investments on its existing portfolio.

 

By Paul Norman, CoStar News – read the full article here