Camden Market's owners turn rebellion into money

The cluster of stalls selling leather jackets and pink hair dye in North London's Camden Market has barely changed for decades.

But behind the scenes a group of investors has begun to bring a more corporate flavour to the area that, for more than four decades, has been the centre of London's alternative music and fashion scene.

Since its £100m IPO at the end of last year, Camden Market's owners have been on an acquisition spree.

Market Tech bought the first two of its clutch of 10 Camden buildings last April. The deals stacked up quickly and it now owns all three of the area's main markets, along with residential and office buildings and Hawley Wharf - another former market, now the site of a new development of offices, homes, shops and restaurants.

"We're making progress quickly," says Charles Butler, Market Tech's chief executive. "Camden has always been a very cool place but it needs investment."

Market Tech has also launched an ambitious digital expansion plan. Its founder, Israeli billionaire Teddy Sagi, has a reputation for high-tech innovation, and aims to turn Camden Market's 1,000 independent stallholders into a global online marketplace.

The success of crafting website Etsy - which floated last month - has been an inspiration for the plan.

"We'll provide the business infrastructure to let these small companies sell online, creating a hub where we can help people's businesses to grow," Mr Butler says.

As well as its £147m property purchases, Market Tech has acquired three tech companies - the latest, Stucco Media, was bought this week for $34.5m. Combined with its 165,000 sq ft distribution warehouse in Basildon, the company is an unusual hybrid of property and online retail.

Mr Sagi's work to build Camden's scattered real estate into a publicly listed company reflects a wider trend: the rise of small-label fashion markets, pop-up shops and faddy food outlets on the mainstream commercial property scene.

Britain's biggest property companies are waking up to the lure of areas such as Camden and seeking to let to small fashion, retail and food companies that can bring a buzz to their schemes, says Mark Smith, head of central London retail at property advisers JLL.

"You can't underestimate the value of differentiation with retail and food and beverage outlets," he says. "Every landlord is looking for the newest businesses that are coming through and markets and pop-up shops are great ways for those start-ups to incubate."

Successes include Spitalfields Market and Boxpark Shoreditch near the City of London, as well as the swelling popularity of Borough Market on the Thames's south bank.

Mr Smith says the down-to-earth vibe of these areas is popular with consumers who have tired of mainstream brands. "Areas like Spitalfields and Camden have great history, and that taps into what consumers want - authenticity, customisation," he says.

Mr Butler has vowed not to let the changes his company is making to Camden affect shoppers' experience.

"We're not going to knock everything down or bring lots of high street retailers in," he says. "We want to retain the essence of Camden, the energy and creativity."

Market Tech started its public life in a small way - only 13.5 per cent of its stock trades as a free float - but it plans to reach the main market some time this year through further issuance. This scope for growth attracted IPO investors including Standard Life and JPMorgan.

The group is seeking to build up an estate to rival London's other best-known shopping venues. These include Covent Garden, owned by Capital & Counties, and Carnaby Street, owned by Shaftesbury.

Analyst Anthony Codling from Jefferies says Market Tech holds "the building blocks for a very interesting long-term redevelopment play within a dynamic and wealthy part of north London". Its digital platform plans give it "the potential for the market to have a much broader reach and scope than its current physical footprint allows".

"If successful, this could add a significant revenue and profit stream to the group," Mr Codling adds.

Camden Market receives 28m visitors a year - about the same as shopping centre Bluewater. Rents from the £507m of existing assets were £13.5m in 2014 and analysts' consensus is that they will rise to £56m by 2018, fuelled by the £1bn development programme.

Mr Butler says he hopes the area will become an incubator for fashion and food start-ups that could then expand into other parts of London.

"We want to be known as the place where a lot of these young businesses start their journey," he says. "We look closely at other markets around London to make sure we're at the forefront, but the difference is the scale and diversity of what we've got."

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