The high profile news that London & Associated Properties has exchanged contracts to sell both Market Row and Brixton Village in Brixton for £37.25 million, at a 3% initial yield, is the culmination of GCW’s 12 years of work on the development of the markets.
The huge interest in the sale was driven by the transformation of Brixton Markets over the last decade to create London’s most vibrant restaurant scene. The markets are a forerunner to the recent boom in markets and food halls across Europe and would-be occupiers now join a long waiting list to open in Brixton.
GCW has been involved at every stage of the transformation. It acted for LAP in acquiring the two sites in 2006, subsequently increasing market occupancy significantly, then letting the markets to a specialist market operator and finally resulting in the sale earlier this year.
Located in the heart of Brixton, the markets have been at the forefront of the regeneration and improvement of the area which is now one of the trendiest and highest growth locations in London. The sale covers two market sites, Market Row and Brixton Village, located either side of Atlantic Road that are let entirely to Market Village Company part of Groupe Geraud until 2036.
The markets are occupied by some 140 specialist retailers and restaurants as well as artists’ studios, offices, storage units and six residential flats. There is huge demand for units with a current waiting list of over 200 interested parties. The two sites produced a total net income in the year ending March 2017 of over £1,200,000 and the income has increased in every year of LAP’s ownership. The ongoing income growth reflects the increasing demand and popularity of the location.
“Brixton Markets were in a state of decline when we acquired them, with significant levels of voids. Following a programme of intense and proactive management, we are proud that today they are home to arguably the most vibrant restaurant scene in London” says LAP chief executive, John Heller.
GCW first acted for LAP on Brixton Markets when it advised on the acquisition of the Atlantic Group, a collection of London market sites, in 2006. Some sites including two on Portobello Road and the Daisy & Tom store on the King’s Road were immediately sold on. GCW then worked with LAP on the imaginative development of two listed buildings housing London antiques markets. This enabled the creation of flagship stores for fashion retailer Jack Wills on Upper Street, Islington and Urban Outfitters-owned Anthropologie on a site formerly operating as the Antiquarius market on the King’s Road.
“At the time that the portfolio was purchased, we could see clear potential for the King’s Road and Portobello Road sites. The acquisition was agreed in a competitive bidding situation and Brixton Markets came with the package. We saw that as a long-term opportunity” says GCW director David Gooch.
Brixton has had a vibrant market area since the 1870s. Market Row was built in 1928 and Brixton Village in 1937 to expand Brixton’s market offering and provide an indoor covered market. The properties were listed in 2010 to reflect their cultural importance to the local Afro-Caribbean communities.
GCW initially worked with LAP for four years on developing and letting the market to local tenants.
“Less than 40 per cent of Brixton Village units were occupied at the time of LAP’s purchase. It was let entirely to local occupiers and the key aim was to maintain the independent feel. That letting policy has remained until today” says Gooch.
“We had to work hard to increase occupancy and our first act was to let vacant units in Brixton Village on three month licences free of charge. Successful tenants then committed to a three year lease in order to stay. This strategy worked and occupancy started to go up” he adds.
In 2011 GCW agreed a deal for LAP to let the two market sites in Brixton to Groupe Geraud, Europe’s largest private market operator. The long term deal saw the French specialists take the markets for £817,500 pa for 25 years with a turnover rent on top.
“LAP had hugely improved the markets and it made sense to pass on the next stage to a successful market operator. The deal was good for both parties with LAP benefitting from any future growth and success. Groupe Geraud have run the market successfully from 2011” says Gooch.
“It has never been let to multiples even though you can look round now and see familiar High Street brands such as Franca Manca and Honest Burger. When Franca Manca first opened in 2008, it was no different from any of the other lettings to owner-run businesses. They were ambitious and like Honest Burger have grown dramatically since their start in Brixton” he adds.
Groupe Geraud has maintained the policy of lettings to independents and this has been a key part of the success and vibrancy of the market. Brixton has been a forerunner to the huge boom in food markets and food halls currently expanding across Europe.