Overview
In the September issue of Vogue, it was declared that London nightlife is back. This was based (partly) on the relaunch of the exclusive members club Tramp. This follows the recent pronouncement by various agencies stating that private members clubs are the newest, hottest real estate assets to be in vogue (no pun intended).
What is striking, yet not new, is the desire to own trophy assets. Whilst the market has been quiet for some time, this “new” asset class places a spin on what is deemed desirable. London’s return to work has been somewhat slower than expected post COVID-19, but the bougie world of luxury leisure has only become more important. We see luxury gyms like Equinox, BXR, One Rebel, and others thriving, whilst The Ned’s main floor remains a heaving nighttime venue seven nights of the week.
It is a misconception that this is a “new” asset class – high net worth individuals and family offices have long been fans – but it’s only now that it is becoming more “institutionalised” with the big players in real estate considering it a mainstream asset.
In Depth
Why Members Clubs?
- Consistent income stream: Irrespective of actual use (like hotels), subscription fees mean the cash flow is steady. This means that investors can see where their money is coming from and for how long.
- Branding: Brand loyalty means discounts for members, which makes use of the facilities (both in home clubs and those abroad) more desirable, and in turn ensures members are invested in the club.
- Size and location: Some of the locations of these clubs are based in real estate that simply would never be readily available in the market at that size, an excellent example being the 75,000 square feet that make up The Sloane Club in the heart of Chelsea.
- Exclusivity: This comes back to the point made earlier – people like luxury and exclusive means luxury, hence the desirability of something seen as unavailable to the masses.
Luxury Living
Alongside the booming London hospitality industry’s ever-increasing strength, the luxury real estate market in London and the UK is undergoing significant transformation, with a notable shift towards integrating high-end residential spaces combined with exclusive private members’ clubs. This trend reflects evolving consumer preferences for lifestyle-oriented amenities that blend luxury living with social and wellness experiences. Fundamentally, everyone wants a taste of luxury. London has always been seen as a global “go-to” destination, and now with the advent of elite luxury residences around the capital, the globetrotters of the world are seeing investment in luxury living as essential for their status.
Developers are increasingly focusing on creating environments that offer both opulent residences and access to exclusive club facilities. For instance, the redevelopment of Mayfair’s Grosvenor Square has introduced premium residential projects like the Four Seasons Residences (the first ever for the group) and No. 1 Grosvenor Square (the old US embassy building). These developments provide residents with hotel-like amenities and access to private clubs, enhancing the appeal of luxury living in central London.
Emergence of Hospitality-Infused Retail Spaces
Luxury brands are redefining retail experiences by incorporating hospitality elements reminiscent of private members’ clubs. Audemars Piguet’s AP House in Manchester exemplifies this approach, offering an opulent environment where customers can socialise and relax in their bespoke lounges, moving beyond traditional transactional retail models. This strategy fosters deeper customer relationships and reflects a broader trend of experiential luxury. This sits nicely alongside the belief that retail in the UK remains strong, particularly in the luxury sector.
The trend of converting historic or iconic buildings into luxury spaces with exclusive amenities is also gaining momentum. A recent example is the transformation of the House of Fraser store on Oxford Street into a high-end mixed-use development (to be known as the “Elephant”) with the first letting secured to elite gym operator, Third Space, known for its celebrity clientele. Whilst this may have been seen by some as a failing of the retail market, it’s more an evolution of the market. The £132 million redevelopment, expected to be completed by 2026, aims to revitalise the area by introducing mixed-use facilities, including office spaces, a rooftop restaurant and a swimming pool. This development is not alone in the retail-to-alternative-use space, with the iconic Fenwick’s building on New Bond Street in the throes of being re-purposed by owners Lazari Investments for office and retail space in the very desirable luxury retail district.
Influence (and Reliance on) International Buyers
The influx of international buyers, particularly from the United States, is also playing an influential role the luxury real estate market. In 2024, American buyers accounted for 25% of purchases in London’s super-prime property market, driven by various factors, including political developments in their home country. This surge in demand contributes to the expansion of luxury properties that offer exclusive amenities such as private members’ clubs, to cater to affluent clientele. International buyers have come to expect a certain quality of lifestyle, even when not in their home countries, and London is adapting well to the demands of this clientele.
Future Outlook
The convergence of luxury real estate and private members’ clubs is expected to continue shaping the market. Developers are likely to prioritise creating integrated lifestyle experiences that combine high-end living spaces with exclusive multi-purpose social, retail and wellness facilities. This approach not only enhances property values but also meets the growing demand for community-oriented luxury living.
