Dynamic development and investment property company Martin’s Properties has completed 22 residential leasing deals across its Chelsea portfolio, seeing strong rental uplifts as the borough sees enduring appeal to an increasing rental dynamic.
66% of these lettings have been on the King’s Road and 50% of those have seen rental growth of over 13%. The Kings Road has been buoyed by investment from the King’s Road Partnership Business Improvement District over the past few years, which Martin’s Properties jointly established and remains an active Board member.
Martin’s Properties notes several new trends in the last 12 months with 53% of residential assets let to the under 40’s age bracket - up from 42% in 2023 and 46% in 2024 - with 30% let to the 18-30 bracket (up from 21% in 2024).
Becky Milne, Residential Manager at Martin’s Properties, said: “Chelsea has always appealed to ex-pats and young professionals thanks to its charming and sophisticated nature with independent boutiques, restaurant offering, beautiful streets and thriving culture. However, over the last 12 months, we have noticed a changing demographic when it comes to demand. Internationals from the Middle East and North America continue to make up a large proportion of residents and visitors, with 75% of our portfolio let to overseas customers.“
Martin’s Properties report that the drive from a younger demographic can be explained by the attraction to the local global-leading educational facilities such as the Chelsea College of Arts, Kensington & Chelsea College and the fashion-focussed London College of Fashion and The Fashion School, which are all in the Borough. Students are also attracted to be based near hospitals and life science institutions with Chelsea and Westminster Hospital, The Royal Marsden and Imperial College London’s Chelsea and Westminster Campus all local, and Hammersmith Hospital and St George’s Hospital also within easy reach.
In addition to the increasing younger cohort, Martin’s Properties reports that tenants are staying longer in the area. In the last 12 months, 30% of their customers took an initial 36 month tenancy with a 12 month break, which is unusual for the private rented market – more comparable with the burgeoning Single-Family Housing sector. 33% of the Martin’s Properties portfolio is now let for 3 years or over, demonstrating the true appeal of the borough and the quality of its assets. In addition, 60% of Martin’s Properties customers have been long standing Martin’s Properties customers for over three years.
However, Martin’s Properties has seen an emerging trend of international HNWI’s leaving the UK altogether as the country has become less attractive due to the recent changes to non-dom taxation where non-UK income is now required to be paid after four years instead of 15.
Becky Milne adds: “We have seen at least three international tenants leave the UK over the past year due to changes in non-dom tax rules, including one who was looking for UK resident status after being here for 10 years. Despite a continuing demand for Chelsea, the profile of tenant has shifted. Much of our demand is for shorter tenancies as a result and, while this is successfully managed and offers its own opportunities, it is apparent that we are losing longer-term residents as a result of changing legislation.”
When vacancies do emerge in their Chelsea portfolio, Martin’s Properties are taking the opportunity to embark on significant improvement works including decarbonisation, refurbishment and other asset management activities, to help improve demand and drive rental growth.
Richard Bourne, CEO of Martin’s Properties adds: “Chelsea is renowned as a location that is vibrant, attractive, diverse and a symbol of affluence and success, which supports its enduring appeal. This is a key factor behind the strong performance of lettings and renewals within our portfolio. The Martin’s Properties includes a £230m Chelsea mixed-use portfolio, a £100m Regional commercial portfolio across Southern England and a new Self Storage business. To highlight the growth and support for these portfolios, Martin’s Properties have just acquired a new asset on the Kings Road and 3 more assets are under offer for the Regional portfolio and Self Storage business. The Martin’s business also includes Obsidian Strategic – a national strategic land promotion business. All of the businesses have seen substantial growth over the past 5 years.”