10.09.18
Network Rail agrees to £1.46bn sale of railway arches
Network Rail has agreed to terms for its widely-publicised £1.46bn sale of commercial estate portfolio made up of 5,200 properties and railway arches.
The company’s announcement to sell off the assets were met with considerable backlash in June when Guardians of the Arches, an action group set up to combat the plans to sell the arches to private firms, said they were under “huge pressure” from Network Rail, with some businesses operating in the arches forced to close already.
Today, Network Rail announced it has agreed to terms with Telereal Trillium and Blackstone Property Partners. It is argued by Network Rail that the major transaction will help fund the railway upgrade plan— bringing major improvements for passengers and reducing the need to fund the railway.
The portfolio is made up of around 5,200 properties, being sold on a leasehold basis with Network Rail retaining access rights for the future operation of the railway.
The race for the sale of the arches suffered a blow in July when Goldman Sachs and the Wellcome Trust’s partnership pulled out of the bidding.
Sir Peter Hendy, Network Rail chair, said: “This has been a very thorough, detailed and complex process and we are pleased we’re now in a position to announce Telereal Trillium and Blackstone Property Partners as the new owners of the commercial estate.
“This deal is great news – for tenants it will mean significant commitment and investment, and for passengers and taxpayers it will mean massive, essential improvements without an extra burden on the public purse.”
Co-founder and chairman of Telereal Graham Edwards said the arches of portfolio is a “unique and vital part of the economy.”
“We are tremendously excited by the prospect of working with its entrepreneurial tenant base – made up of car mechanics, bakeries, micro-breweries, restaurants, and just about every type of business you can think of,” he added. “These tenants are a vibrant part of many local economies and communities.”
David Biggs, managing director at Network Rail Property, said: “We are proud to have fostered so many small, independent, diverse businesses and communities across the country and we are confident that these will continue to thrive under the new owners.
“Ultimately our role is to run, improve and grow the railway, and managing these properties isn’t essential to that. The new owners will invest in and grow the estate, and we can focus on our core business of running the railway.”
Head of European Real Estate at Blackstone James Seppala said: “We are honoured to have been chosen as the new owners of Network Rail’s commercial estate.
“The portfolio is unique in its character and function, and we are excited by the tremendous opportunity for us to contribute to the continued revitalisation of the railway arches in the UK, always recognising the role that they play in stimulating economic activity, growth and prosperity, in particular amongst SMEs and local communities.”
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