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The Marylebone Dividend: 30% More Growth Than its W1 Peers (1995-Present)
The Marylebone Dividend: 30% More Growth Than its W1 Peers (1995-Present)
For large estate and development land owners sitting on underperforming commercial assets, the most critical figure is not total appreciation, but relative outperformance. The data confirms that since the start of its regeneration program in the mid-1990s, Marylebone's core sectors have delivered an average capital growth of approximately $\mathbf{30\%}$ more than the wider, already affluent W1 postcode district that surrounds it.
This 30 premium is the Marylebone Dividend—the quantifiable reward for disciplined, estate-led placemaking over the multi-decade period (1995–Present). This sustained outperformance proves that land value is not a fixed, geographic parameter; it is created by intentional strategy.
The Strategic Opportunity: The State of the Street in 1995
The Strategic Opportunity: The State of the Street in 1995
The foundation of this success story is the very challenge many estates face today. In 1995, Marylebone High Street—deep in the prestigious West End—was commercially distressed. After a long decline, culminating in the early '90s recession, the street had collapsed.
Initial Crisis: A third of the shops were vacant or occupied by rent-free charity shops simply to mitigate rates liability.
The Landlord's Position: The significant lead property owner, Howard de Walden Estates, while owning most freeholds, only controlled about a third of the shops due to long-term leases.
New management recognized that by restoring the traditional values of the High Street, they could dramatically improve the quality of the retail offering and lift the entire area, crucially including the highly valuable residential values of their adjoining properties.
The Multi-Decade Blueprint: The 7 Pillars of Outperformance
The Multi-Decade Blueprint: The 7 Pillars of Outperformance
The Marylebone turnaround was a masterclass in long-term, granular execution, which commenced in the mid-1990s. The comprehensive strategy—which includes the provision of schools and other community uses along with the refurbishment of residential and commercial buildings—is the ultimate blueprint for achieving the sustained $\mathbf{30\%}$ outperformance on your own assets:
1. Strategic Control and Acquisition (Place Strategy)
Controlling the Narrative: The Estate initially owned circa 1/3 of the high street. To ensure the strategy could be executed, control of the 85 shops and restaurants was systematically raised to about 70% through acquisition. This level of control was essential for shaping the street's identity.
Restoring Traditional Values: The goal was to restore the traditional values of the High Street to lift the area as a whole, including the residential values of adjoining properties.
2. Anchor Tenants: Defining the Brand Identity
The key was attracting significantly more shoppers from outside the immediate area.
Waitrose over Tesco/Sainsbury’s: Higher rent offers were rejected. Waitrose was chosen as the primary anchor as it was felt it would draw people in from other areas to a greater degree, prioritising quality of footfall over rent.
The Conran Shop: A derelict tyre depot, empty for years, was used to anchor the northern end, providing a high-quality retail anchor whose presence offered the reassurance to attract smaller, independent retailers.
3. Tenant Curation: The Difficult Value-Engineering Phase
This was the hardest phase of the project—the systematic improvement of the retail quality and the removal of ‘inappropriate’ tenants (photocopying shops, travel agents, etc.) who had statutory rights.
Strategic Tenant Movement: Tenants were persuaded to move with offers of alternative side street accommodation, making way for an injection of fresh retail ideas.
Curated Selection: Tenant selection avoided multiples that would not bring a sense of community. Retailers who had a point of difference were sought—exclusive in merchandise but not price point—who would service the needs of the majority residents and local working population, supporting the vision of a friendly urban village.
Residential Focus: The fundamental objective was to ask, what do the residents and local working population want on a day-to-day basis and what will make them visit Marylebone High Street rather than competing, neighbouring streets.
Agent Challenge: Good advice from agents was difficult to attain as most agents were geared to doing deals with multiples.
4. Physical Transformation and Retaining Character (Individual Buildings)
The Estate’s investment went into the physical fabric to maximise both residential and commercial value:
Unit Upgrading: Many units were extended and upgraded (e.g., covering light-wells) to create more economical retail accommodation, as many were awkward in shape, damp, and uneconomic in size.
Residential Value Uplift (Lateral Conversions): Upper residential parts were subject to lateral conversions through the party-wall to provide modern accommodation, enabling one staircase to serve multiple buildings. Redundant entrances were then incorporated within the retail area, providing a more prominent retail frontage and better trading potential, which also significantly improves the residential accommodation.
Protecting Heritage: Quirkiness and character was retained in shops to create a more interesting retail environment (e.g., Daunt’s Books, Patisserie Valerie). The ‘right’ tenants were always offered ‘comfortable terms at renewal’ to ensure their retention.
5. Community Reinforcement and Promotion
Market-Driven Footfall: The Farmers’ Market (Sunday) and Cabbages & Frocks market (Saturday) has turned the Street from a 5-day to a 7-day week offering.
Self-Sustaining PR: Public relations and marketing began to get very positive press reaction, and a momentum grew that later negated any need to promote the Street, as its unique tenant mix did this itself.
Community Events: Landlords heavily subsidise the Christmas Lights and fund and organise the annual Summer Fayre (attracting circa 30,000 people).
The Unavoidable Conclusion
The Unavoidable Conclusion
The long-term evidence of this multi-decade strategy is irrefutable:
Footfall is understood to be multiples greater than when independent counts were first commissioned in the mid-2000s.
The market desirability is extreme, with recent reporting (dating from the older success phase) indicating high demand for any available shop units.
The street has won numerous awards, including the Academy of Urbanism’s top award for best street project.
This success confounds traditional retail theory: Best value was created, and the 30% outperformance over W1 was delivered, not by chasing blue-chip multiples but by doing the very opposite and creating a community and a genuine 'urban village'. This strategic focus on long-term placemaking, quality curation, and residential desirability is a low cost and highly effective way to convert suppressed value into a market-outperforming asset capable of delivering a sustained, compounding premium.
This success confounds traditional retail theory: Best value was created, and the 30% outperformance over W1 was delivered, not by chasing blue-chip multiples but by doing the very opposite and creating a community and a genuine 'urban village'. This strategic focus on long-term placemaking, quality curation, and residential desirability is a low cost and highly effective way to convert suppressed value into a market-outperforming asset capable of delivering a sustained, compounding premium.
This is an amended extract from the Howard De Walden’s Estate website.Place strategy: · Lead property owner owned circa 1/3 of the high street; traditional values of the High Street were restored to be restored and lift the area as a whole, including the residential values of adjoining properties.· Not just confined to improving the High Street but importantly, the provision of schools and other community uses and refurbishment of our residential commercial buildings· Needed to attract significantly more shoppers from outside the immediate area· Anchors - Waitrose to draw people in from other areas to a greater degree, derelict tyre depot had been empty for years and a Conran Shop· Remainder of High Street. - raise level of control through acquisition to about 70% and improve the quality of the retailers of the smaller shops; inappropriate tenants were made offers of alternative accommodation in side streets were persuaded to move and make way for an injection of fresh retail ideas into the High Street (hardest phase of the project); upgrading and extension of newly owned stock as many units, many these were extended as they were awkward in shape, damp and uneconomic in size.Individual buildings and tenants:· upper residential parts- lateral conversions through the party-wall in order to provide more modern residential accommodation enabling one staircase to serve buildings - redundant entrances can then be incorporated within the retail area, providing a more prominent retail frontage and improves the residential accommodation· quirkiness and character was retained in shops to create a more interesting retail environment such (eg Daunt’s Books, Patisserie Valerie) – the ‘right’ tenants were always offered ‘comfortable terms at renewal’.· tenant selection avoided multiples that would not bring a sense of community, retailers who had a point of difference were sought (were exclusive in terms of their merchandise but not price point) and would service the needs of the majority residents· support the vision of a friendly urban village· good advice from agents was difficult to attain as most agents were geared to doing deals with multiples· fundamental objective was to ask the question, what do the residents and local working population want on a day to day basis and what will make them visit Marylebone High Street rather than competing, neighbouring streetsPromotion and PR· public relations and marketing - began to get some very positive press reaction and after a while a momentum grew and that negated any need to promote the Street, as its unique tenant mix did this itself· landlords heavily subsidise the Christmas Lights and fund and organise the annual Summer Fayre as community events in which circa 30,000 people visited· The Farmers’ Market on Sunday, at the back of Waitrose, and a Saturday market called Cabbages & Frocks has turned the Street from a 5 day to a 7 day week offeringFootfall is now 3 times greater in a decade and traditional retail theory has been confounded by creating best value, not by letting to blue chip multiples but by doing the very opposite and creating a community and genuine urban villageGreat tangible turnaround stories of high streets and town centres are actually a bit thin and so over the coming months I aim to highlight a few for the inspiration and belief value that it can be done as much as the lessons and how-to principles. Marylebone Village or High Street is a great story...Its hard to believe that Marylebone High St was 1/3 empty in the 90s. Today it is one of the most wannabee alternative live and shop locations. One of the drivers of change was the significant lead property owner who allowing for long leases had a start position of owning circa 1/3 of the high street. The street had lost its way in the 1960s and sadly went into a long and gradual decline throughout the ‘70s and ‘80s before finally collapsing during the recession of the early '90s. In 1995 a third of the shops were either vacant or occupied by temporary charity shops who paid no rent at all but were there to reduce the rates liability: a fairly desperate commercial situation.Howard de Walden Estates, owned most of the freehold shops in the High Street, but because of the grant of head-leases, actually controlled only about a third of the shops. New management at the Estate recognised that if the traditional values of the High Street were restored, this would dramatically improve the quality of the retail offering and would lift the area as a whole, including the office and residential values of the Estate’s adjoining properties. However, the Estate’s efforts were not just confined to improving the High Street but importantly, the provision of schools and other community uses along with the refurbishment of our residential and commercial buildings.It was clear the High Street had to attract significantly more shoppers from outside the immediate area. The starting point was to bring in a supermarket to anchor the prime location of the High Street. Despite the fact that significantly higher offers were received from both Sainsbury’s and Tesco, the Estate chose Waitrose as it was felt it would draw people in from other areas to a greater degree. A lot of work went into assembling the site and there were the usual difficulties in providing solutions to the engineering problems of creating such a large space within a conservation area with 30 occupied flats above.At the northern end of the High Street a derelict tyre depot had been empty for years. It was agreed to sell a long lease to the Conran Shop to provide a 25,000 sq ft store which would anchor at the northern end of the High Street, but provide a high quality retailer whose presence in Marylebone High Street could create the reassurance needed to attract smaller retailers for the standard shops in the High Street.Once these anchor stores had been secured, work commenced on improving the remainder of the High Street. A significant problem was that the Estate controlled only 40% of the 85 shops and restaurants and therefore it was important to raise this level of control which through acquisition was raised to about 70% and more appropriate in the shaping of the Street.Next step was to improve the quality of the retailers of the smaller shops. Many units were occupied by photocopying shops, travel agents and retailers who had lost their way. Many of these retailers had statutory rights and could renew their leases at a market rent. However with offers of alternative accommodation in side streets were persuaded to move and make way for an injection of fresh retail ideas into the High Street. Removing the ‘inappropriate’ tenants was the hardest phase of the project as there were limited legal powers to move these tenants and during this phase there was bad press as many remained sceptical about the stated ambition of improving the High Street. Ironically some of the worst comments came from publications which are now some of our strongest supporters.After gaining possession of some of the smaller units, many these were extended as they were awkward in shape, damp and uneconomic in size. A typical Victorian shop may comprise only 350 sq ft of trading space with a light-well at the rear of the trading area and a small corridor through to a small storage room. In the majority of instances, the light-well was covered over and the shop knocked through so that it contained approximately 700 sq ft or so of relatively open retail accommodation, which was far more economical. The basement would always provide sufficient storage and ancillary staff accommodation. In some cases the basement has also been opened up to provide retail space, although with limited success.Typical Victorian shops also have adjoining but separate doors to the upper residential parts. These residential doorways mean that retail frontages are narrow and provide traders with a limited shop front. Many upper parts have been subject to lateral conversions through the party-wall in order to provide more modern residential accommodation enabling one staircase to serve buildings which have been laterally converted across 3 or 4 original buildings. Redundant entrances can then be incorporated within the retail area, providing a much more prominent retail frontage and better trading potential. This also significantly improves the residential accommodation.Dull, rectangular retail units were not pursued despite being what many multiple retailers seem to crave. Some quirkiness and character was retained in shops to create a more interesting retail environment such as The Natural Kitchen and Skandium. Not all of the street needed changing and it was important to look after what was good, such as Daunt’s Books and the ever popular Patisserie Valerie. The Estate made a special effort to ensure that these tenants were retained and were always offered ‘comfortable terms at renewal’.The tenant selection avoided multiples who frequented Oxford Street just 800 metres away, and the exclusively expensive retailers who occupied Bond Street just a little further, and would not bring a sense of community. Retailers who had a point of difference were sought, were exclusive in terms of their merchandise but not price point and would service the needs of the majority of our residents and the local working population and would support the vision of a friendly urban village which had a uniqueness whilst also recognising that the area was in the West End and accordingly was reasonably affluent.Good advice from agents was difficult to attain as most agents were geared to doing deals with multiples and had no real understanding of what works for the small retailers or who they were. A young partnership which had recently been formed was instructed that brought a different perspective. This combined with constant dialogue with residents, spouses, friends and anyone else who had a view, which new retailer would be appropriate for Marylebone High Street enabled a good mix to be found. In the mid-1990s it would have been easy to fill the Street with multiple coffee shops and ladies’ fashion. Clearly there was room for these but the usual suspects were not allowed to dominate. The fundamental objective was to ask the question, what do the residents and local working population want on a day to day basis and what will make them visit Marylebone High Street rather than competing, neighbouring streets.Some retailers were put in the more affordable side streets as there was concern that if the High Street became too successful, the nature of their business would be unable to afford the High Street rents. An example of the success of this has been in Moxon Street which has become a niche specialist food street complementing the High Street.Improving footfall in the quietest areas was important thus new retailers who provided everyday essentials such as sandwiches, coffee etc to these poorer pitches. Tenant selection was not entirely right as some of the new retailers gave outstanding presentations but turned out to be a disappointment. On the other hand, others surpassed all expectations. This was an inevitable consequence of dealing with independent retailers who did not have a track record.Most of the landlords who controlled the other shops, which could not be bought in, became enthusiastic supporters of the Estate’s policy using the same letting agents and consulting on who they should let their shops to when they become vacant in effect creating a club of mutual admiration of our collective work.Public relations and marketing also played its part, however, the High Street began to get some very positive press reaction and after a while a momentum grew and that negated any need to promote the Street, as its unique tenant mix did this itself. The landlords continue to heavily subsidise the Christmas Lights and fund and organise the annual Summer Fayre as community events in which circa 30,000 people visited a very enjoyable and relaxed Summer Fayre on a glorious, sunny summer’s day.The Farmers’ Market on Sunday, at the back of Waitrose, and a Saturday market called Cabbages & Frocks has turned the Street from a 5 day to a 7 day week offering. With the exception of the Banks, all the shops open on Sundays in marked contrast to 10 years ago when 70% of the shops were shut.Footfall is now 3 times greater than it was 12 years ago we first commissioned independent footfall counts. During the last 12 months, there has only been one shop to let and 10 offers were received within a matter of weeks. The High Street has won numerous awards including being voted by Radio 4 listeners as London’s favourite street in a survey commissioned by CABE. In its inaugural year, the Estate won The Academy of Urbanism’s top award for the best street project in Britain and Ireland.You can look down Marylebone High Street and see and feel the wonderful community atmosphere with a good balance of shops. It is also satisfying that traditional retail theory has been confounded by creating best value, not by letting to blue chip multiples but by doing the very opposite and creating a community and genuine urban village.
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