LONDON — As every student of American history knows, the British love a tax.
The Boston Tea Party was one of many episodes over the centuries when angry locals have rebelled against the British government’s persistent efforts to pick their pockets. Now history is repeating itself with Britain’s non-domiciled — ultra-rich, foreign residents — fleeing the country for tax havens including Milan, Monaco and Dubai, taking their high-spending ways with them.
It’s not just the new Labour government that’s spooked them. Under Conservative leaders, plans were already in place to ramp up taxes for non-doms who, as of next April, will have to pay U.K. tax on their worldwide income and gains once they’ve lived in the country for more than four years.
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Italy has quickly moved to fill the void, welcoming the international jet set with a more favorable regime: a flat tax of 100,000 euros a year, no questions asked, and no time limits on residency. There are other attractions, too, including more sun, tastier tomatoes, and an all-around better quality of life.
Running the Rich Out of Town
London’s loss has been Milan’s gain, and not for the first time.
The local economy in London continues to suffer from a decline in high-spending tourists due to the government’s cancellation of the tax-free shopping program, which allowed non-U.K. residents a 20 percent discount on their purchases.
The program had been a money-spinner, with Selfridges dedicating a special space for shoppers to complete their paperwork, and Global Blue, the tax-free shopping company, operating a high-net-worth lounge on Albemarle Street to cater to super-shoppers, the Chinese in particular.
But that all disappeared after Brexit. The U.K. government nixed the program, prompting shoppers to make their high-end purchases on the Continent instead.
The influx of non-doms and wealthy shoppers has been a boon for Milan in so many ways, bolstering retail rents and luring investors from the property, hospitality and creative sectors in particular.
In 2023, Milan’s Via Montenapoleone was ranked as the second most-expensive retail venue in the world, after Manhattan’s Fifth Avenue, with prices rising to $1,766 a square foot, according to Cushman & Wakefield’s annual report, “Main Streets Across the World.”
Average rents on Via Montenapoleone climbed 20 percent year-over-year, in 2023 and are now 31 percent ahead of pre-pandemic levels. By comparison, rents on New Bond Street in London are $1,462 a square foot, while on Avenue des Champs-Élysées in Paris, space costs $1,120 a square foot.
Brands are also thinking twice about planting their retail flags in London. Traditionally, the British capital has always been the first port of call for U.S. brands expanding eastward, or Asia Pacific brands moving westward. Today, due partly to the lack of tax-free shopping, that’s not necessarily the case.
An Abandoned Gem
Luxury property investor and developer Gabriele Cerrone, founder of Trophaeum Asset Management, had a feeling there might be an exodus of wealth, one reason why he has deliberately switched his attention from London to Milan, and why he bought the historic ’30s building that will house the city’s first Soho House club.
It was a big pivot for Cerrone, who had focused on central London property for years. Trophaeum, transformed the once-sleepy Albemarle Street in Mayfair into the home of stores including Thom Browne, Aquazzura and Self-Portrait, the restaurant Isabel and Robin Birley’s private members club Oswald’s.
Trophaeum also bought and developed the site of Gucci’s New Bond Street megastore and Alaïa’s only flagship outside of Paris, on the same street. Trophaeum transformed the building that now houses Maison Estelle, the private member’s club on Grafton Street, and was also behind the Global Blue luxury tax-free shopping lounge, which was forced to shut when the U.K. cancelled the tax perk.
But as Britain’s exit from the European Union loomed, and wealthy foreign residents started getting nervous, Cerrone began looking elsewhere for trophy assets he could develop.
He fell in love with, and later acquired, an abandoned six-story building on Via Mascagni in the center of Milan, which had been on the market for more than a decade.
The site was already famous, having housed the Palestra Doria Boeing gym, where some of Lombardy’s best boxers trained. Before that it was a cinema, the first in Milan to show Walt Disney films. The finishing touch was a glass house on the rooftop of the building which had been designed by the Milanese rationalist architect Mario Cerenghini, with views of the Duomo.
Cerrone had to have it.
“It was an historic building loved and cherished by all of Milan because of the boxing and the cinema. There was all the outside space, the proximity to Via Montenapoleone, and the extravagant roof terrace. I knew it had so much potential,” Cerrone said in an interview.
“When I first bought it, my dream was to open a Hotel Costes — magnet for the entire global fashion system,” said Cerrone. Despite some early talks with Jean-Louis Costes, the plan never came to fruition. “Jean-Louis is hands-on [in his hotel] every single day, and it’s not an easy concept to roll out.”
Europe’s New Clubland
Since Cerrone bought the via Mascagni building in 2018, the COVID-19 pandemic, the U.K.’s exit from the European Union, and the flight from London to Milan changed the cultural, social and financial dynamics in Europe.
A wave of investors started seeing Milan with new eyes, watching wealth flow into the city, and putting their money behind retail, hotels — and private members clubs.
The culture of private members clubs may be more British than Italian, but that hasn’t deterred the clubs from jockeying for space in the Italian city.
The Wilde is set to open in October in a villa previously owned by Santo Versace, while Casa Cipriani opened on Via Palestro two years ago, near the Giardini Indro Montanelli. The ultra-expensive Core Club is planning to open on Corso Matteotti in the center of town, not far from San Babila.
Soho House is set to arrive in a couple of years, although a specific date hasn’t been set.
That’s a lot of clubs for a small city like Milan, but Cerrone — and the team at Soho House — believe the new outpost will be different from its rivals for a number of reasons.
Cerrone described the space as unique and says none of the other clubs will have a combination of so many hotel rooms (there will be at least 50) a gym, an outdoor pool located in a botanical garden, and a roof terrace spanning almost 11,000 square feet, with a distant view of the Duomo.
And, like Centre Court at Wimbledon, the courtyard will have a cover for when it rains, while the interiors will reflect the rationalist style of the original architecture: clean lines, mixed with art and design pieces that celebrate local craftsmanship.
Cerrone argued that having so much private, outside space so close to Milan’s Golden Triangle shopping streets is precious in the post-COVID era.
Soho House will be different from the other clubs, he contended, because it attracts a young, creative crowd with lower membership fees for those under 27 years old.
“It is the best-suited members club [brand] to open up in Milan. The DNA is similar,” he said, adding that Milan, like Soho House, is a creative industries hub, home to fashion, design, food and architecture with industry events happening all year round.
“I think it’s the only real democratic club. It doesn’t recruit members based on the size of their bank accounts or how much money they’re managing at their private equity fund,” he said, adding that Soho House will also be able to attract a younger crowd in a country that is aging quickly.
He added that Soho House is about young people “who haven’t necessarily made a fortune. And the reality is we all want to hang out with young people.”
Soho House Prepares for a Deluge
Soho House’s creatives-first strategy is clear, and the club already has a successful site in Rome, which opened in 2021. Located in the San Lorenzo neighborhood, it features a rooftop pool, Cecconi’s Terrazza, a Cowshed spa, movement studios, a screening room, 49 bedrooms and 20 long-stay apartments.
In Milan, Soho House already has built up a vibrant community through its Cities Without Houses program, whose members are counting the days until the new club opens.
In an interview, Dominique Bellas, membership director of Cities Without Houses, said it took a while to find the ideal space, and the vision for Via Mascagni is big.
The members, she said, “wanted a house with all the bells and whistles — a gym, a pool, spaces to work, have fun, do events, meet each other, collaborate and be creative together.”
The location was important, too.
“Being so central means that a member can come first thing in the morning, do a gym class, have a breakfast meeting, work, attend a workshop. They might even end up there at 3 o’clock in the morning having drinks. It’s going to be the kind of place that can be part of the everyday lifestyle for members in the city. Having a building that lends itself to that [lifestyle] was key for us,” she said.
Bellas argued that nurturing creative people will be Soho House’s point of difference. Soho House already has a mentoring program in Milan that aims to connect establishment figures with young talent. Even the club’s interiors will feature a mix of well-known and emerging artists, she added.
Nonmembers will also be able to stay at the hotel, adding a further element to the Soho melting pot. “You’ve got the opportunity to meet people from all over the world, who are like-minded, creative, relaxed. We’re always trying to create a good energy in the houses,” said Bellas, who has been ricocheting around the world on behalf of Soho House.
Two weeks ago the club opened an outpost in São Paulo — in the maternity wing of a former hospital. There are plans to open a first site in Madrid, a third in Barcelona, and a Tokyo club in 2026.
Looking Beyond Milan
In terms of international openings and opportunities, Milan has a long runway — but it will have competition in other parts of Italy and Europe.
Asked where he’s scouting next, Cerrone said he has his eyes on Monaco and Europe’s jet set resorts in particular.
“We think there are a lot of opportunities in Monaco because it doesn’t have enough activities to service the younger people who have been forced to leave cities like London. A lot of people are bored in Monaco, and it needs a lot of cool concepts,” he said.
Cerrone plans to keep Trophaeum’s team headquartered in London “because it’s the most international city in Europe, and the easiest place to find a mix of talent,” he said, adding that investment-wise, however, it’s no longer a priority.
Cerrone also sees holiday hot spots as having great potential, especially when it comes to bricks-and-mortar retail.
“When you are investing in retail in [high-end resorts] you have zero digital competition. People don’t go on vacation and order Amazon deliveries to their yachts,” said Cerrone.
“People want to shop in towns, which is why places like Saint-Tropez, Capri and Sardinia hold a big, big interest for us. Also, people on holiday are less attentive to how much they’re spending. They’re in a feel-good mood and they’re not counting pennies,” he added.
That’s another win for Europe, and a strike against the U.K. Unless, of course, the summer weather improves, and tourists decide to swap their pints of lager for Champagne or Prosecco in the resorts of Cornwall and Devon.
