Life

POP Brixton Is Yet to Make a Profit

Following our investigation into the south London shipping container complex earlier this week, Lambeth Council has disclosed conflicting figures about the project’s finances.
October 10, 2019, 1:59pm
VICE_POP Brixton_280919_Wunmi Onibudo_11
Photo by Wunmi Onibudo.

Earlier this week, VICE published a piece about POP Brixton, the shipping container complex in south London, opened in 2015 as part of a regeneration bid from Lambeth Council.

Our original reporting found that, after four-and-a-half years, POP Brixton had made a profit and given half of this to Lambeth Council, as per their profit-share agreement, outlined in the SLAs. This was in part based on information sent to VICE by Lambeth Council in an email, which stated: "Profit share was received in the 18/19 financial year only and was in the amount of £53,750" [sic].

However, following the publication of our piece, Lambeth Council has disclosed to VICE that this information is incorrect.

It says that the £53,750 was actually "pre-profit share", which was agreed as part of the lease extension in 2017. This agreement stated that a "base rent" would be paid to the council from the project before a profit was made. According to the council, when it was clear the project would not be making a profit any time soon, these payments stopped (in April of 2019) and the council received no further money.

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A spokesperson for Make Shift – the management company behind POP Brixton, owned by property firm The Collective – told VICE that the venture had "broken even in 2018" but "not yet made a profit", and that Lambeth Council had received an "early profit share".

The original way Lambeth Council was set to make money off POP Brixton was through a "profit share agreement". Once the project made a profit, 50 percent (a profit share) would go to the council and 50 to POP Brixton. A pre-profit share, or early profit share, is money given to the council before it has made a profit.

VICE asked Lambeth Council why it provided incorrect information about POP Brixton’s profitability. A spokesperson said they did not understand why the distinction between profit share and pre-profit share was "hugely significant".

If the figure is a pre-profit share, this means Lambeth council's risky regeneration project has still not made a profit, despite its original prediction of this happening by 2018.

POP Brixton's lease ends in 2020, but Lambeth Council has submitted a planning application to extend this until 2024.

A council spokesperson told VICE: "As Lambeth and Pop are in negotiations for an extension of the lease until 2022 it is likely that a fixed rent amount will become payable in lieu of profit share."