London has few places where you can fit a bamboo lodge, a wine bar and 11 food outlets in 10,000 sq ft, but that is what Dinerama Shoreditch, E1, offers. It is a cold January night and Dinerama is opening its doors to the public again after a short winter hiatus. During its break, the facility at the heart of London’s pop-up land has had a new roof installed, which is keeping the punters dry.
At “London’s nomadic street food circus”, drinks are served upstairs in the Winerama bar, and downstairs in the multitude of market stalls. For food, soy sauce-glazed tuna tartare from Mexican venture Breddos Tacos is on the menu. Despite the cold, there is a heavy crowd and Dinerama is heating up.
The man behind the idea, City lawyer turned leisure entrepreneur Jonathan Downey, believes this type of street market is the future of London. He is so convinced, he has sidelined his other ventures, including the Match Bar group, to focus entirely on the street market phenomenon.
Downey’s vision started as Street Feast in Haggerston, E1, which ran for nine weeks in 2013. Then Street Feast opened in Dalston, E8, where it is still running today. The success attracted a clutch of founding investors, including TV chefs Jamie Oliver and Nigella Lawson.
“I probably owned about eight or nine bars and restaurants, and sold all of them apart from Milk & Honey in Soho. I decided to concentrate on expanding Street Feast as a business,” says Downey. “It was so powerful, and I started to get more involved with the curation of the food and the traders, more involved in controlling the vibe and building the spaces.”
Then in May last year, Downey joined forces with fast food chain Leon co-founder Henry Dimbleby to create London Union – the platform from which they plan to build the world’s greatest street food market.
Their promise is to turn “underused, derelict corners of the city into vibrant street markets”.
In the same month, the new venture bought Street Feast. A crowdfunding campaign was started in October, with an aim to raise £3.5m to expand their portfolio with an additional 15 market sites by 2020, as well as London’s first permanent street food market. They have already raised £2.5m.
Dinerama is the latest addition to the portfolio, opening in summer 2015.
The scheme is testament that all the work has been worth it: it is a runaway success, attracting around 11,000 visitors each weekend.
Revenue streams include the trader’s pitch costs, a £3 entrance fee charged to customers after 7pm, and income from the bars. Since London Union bought Street Feast, the markets have generated around £3.5m in revenue.
Those who thought the pop-up phenomenon was just a fad may have to think twice in light of London Union’s work. Its 300,000 followers on social media certainly suggest it is a force to be reckoned with.
Now that the business partners have raised more than half the cash they need, the search for those 15 sites is in progress.
Downey has already set his sights on some notorious London hotspots for a permanent street food market and he has the 13,000 sq ft former Smithfield Market, EC1, on his radar.
The site has been tied up in planning battles for two years. Former owner TH Real Estate dropped plans to redevelop part of the market when it sold the property back to former freehold owner the Corporation of London at the end of last year for £35m.
TH Real Estate produced a £160m plan for offices, bars and shops on the site, but they were vetoed by the government last year when then communities secretary Eric Pickles deemed the plans “harmful” to the site’s heritage following a public inquiry.
A London Union takeover, however, would see the old market revitalised to its former use.
Downey’s vision extends beyond this site. He thinks that future London Union markets could anchor mixed-use developments. He has already begun talking to high-profile developers and local councillors in the capital and the regions, looking particularly at Manchester and Bristol.
His ideas may be big, but if there is one thing Downey knows about business, it is that his model works best when everyone is having a good time.
He says, “I just think that we are really good at hacking great vibes.”
How does it work?
Putting London Union ahead of the fiercely competitive food and beverage pack is its flexible space requirements.Downey opened the 11,000 sq ft Model Market in Lewisham, SE13, after discussions with site owner Land Securities. The overgrown former market plot had been empty for 15 years, and LandSec was keeping it only to prevent others developing on the land, which is adjacent to Lewisham Shopping Centre. Downey struck a deal – he leases the site for a basic fee and instead of paying empty, bleeding costs, Land Securities gets to claw back some cash in its interim use.
The partners and LandSec have now agreed a 10-year lease for the site (see box). “LandSec really gets what we do, and wants more of it. It is good for them and it is good for us, and it is good for the places we are doing it in,” says Downey. London Union also has
markets in Shoreditch, E1, Dalston Yard, E8, and at Hawker House in Canada Water, SE16.
And rather than competitive food and beverage rents to secure a spot in central London, London Union pays between £6 per sq ft to nothing at all for the sites. “We have really great rent-free deals where we have a shorter lease and we are doing a lot of place-making for the area,” says Downey.
The food operators pay a weekly pitch fee, which is either a percentage of the sales, or a fixed rate of between £600 and £800, depending on the unit size.
Downey is flexible with lease lengths too. “We are happy to do deals on a 10-year basis, and we are happy to do them on a 10-week basis,” he says.
What does this mean for property?
Rising rents make it harder for restaurants to survive on the high street, which Downey predicts will soon be home to brands and chain eateries alone.
“We have got some great chains out there, but it is all going to end up looking the same,” he warns.
He stresses that London Union is not an alternative or even a solution to the problem, but it is something that landlords and developers should consider when it comes to securing an anchor tenant.
“Where developers have dedicated 30,000 sq ft on the ground floor for retail space, we will put London Union in there, in the way that M&S is an anchor tenant for certain developments. That is where we want to get to.”
London Union’s lease for Hawker House market at Canada Water (above) is only for 18 months, but it has already begun talking to the landlord, Shard-owner Sellar Group, about opening a 20,000 sq ft produce and hot food market in the area.
But not all aspects of the property world are up to speed with Downey and his visions. There are hurdles in the way for London Union and its proposals for London, mostly in the form of planning regulations. It took Downey and his team nine months to get planning permission to install the winter roof at Dinerama.
“We have got to change the planning laws to respond to the modern pop-up economy, so that it doesn’t take nine months to get permission to put a roof on a street food market that would otherwise be a rainy washout. Planning is the biggest hassle we have had, and it is not fit for purpose when we are trying to give places a new purpose quickly,” he says.
But it looks like the roof was worth the wait, as revellers from across the city crowd into the new winter Dinerama.
Food for thought
London Union’s plans to restore Smithfield market into “the world’s greatest food market” reflect Downey’s dedication to the pop-up phenomenon. This is not just a fad that people want now, but a trend which is seeing consumers turn back in time to the days of the market.
“If you look at supermarkets’ figures, their sales are down. We are sick of eating sugar and processed food. It is not just a middle-class thing anymore. It is all about happiness and nutrition,” he says.
Downey compares London’s market offering to that of New York, Hong Kong and LA. “If you look at Grand Central Market in downtown LA, it is one of the five must-see places in the city, and it isn’t even that good. What we are doing is already way better than that,” he says confidentially. “What we do helps create a vibe that people gravitate towards. People want to live and work nearby.”
Whether the markets are on long or short leases, they provide opportunities for landlords and developers to make good use of space.
“I think the phenomenon of pop-ups is just about good economic use of what would otherwise be empty space. As long as landlords are cool about it, I don’t see why it would stop, because it is so useful. It provides a bit of income and gives small businesses a chance,” he says.
