Network Rail has today announced the sale of its commercial property business in England and Wales.
The majority of properties will be sold on a leasehold basis, reflecting that access to these properties will be required for the future operation of the railway.
Private bidders are being sought to purchase Network Rail’s commercial estate portfolio, which will create a significant injection of cash to the taxpayer-owned railway infrastructure company as it focuses investment on passenger benefits.
Network Rail has decided to sell the commercial estate business because it is a non-core property asset and is not essential for the running of the railway. This will allow the company to place even more focus on its core business of improving the passenger experience and running a safe, reliable and growing railway and help fund its upgrade plan.
Network Rail’s commercial estate is a profitable and successful asset portfolio. Most of the 5,500 properties in the portfolio up for sale in England and Wales – the majority of which are spaces in railway arches – will be sold as leasehold with Network Rail retaining the freeholds to ensure access rights continue unaffected. These protections mean the safe and efficient operation of the railway remains now and into the future, with no impact on the daily operation of the railway, its safety or on future upgrades.
The business is unique as the largest provider of small and medium-sized business space in the UK, and current tenants will transfer to the new buyer with their existing leases and notice periods unchanged. Considerable potential exists to develop unused spaces to allow local businesses to grow and jobs to be created.
Network Rail is now delivering almost a quarter of all infrastructure investment in the UK, spending £130m every single week. The money will contribute toward its overall investment in delivering mega projects, like the Thameslink Programme, the Great North Rail Project – which includes the Ordsall Chord, Liverpool Lime Street station upgrade, the Calder Valley lines upgrade and the Manchester to Blackpool upgrade – Crossrail, and the Waterloo and South West Upgrade. Passengers will see a transformation in services over the next 18 months with much needed capacity with new, more frequent and longer trains.
The sale of Network Rail’s commercial estate business will see a new owner invest more money into the commercial estate, bringing more businesses, jobs, commerce and better social environments.
Mark Carne, Network Rail’s chief executive said:
“This deal will bring more investment into the commercial estate for the benefit of the local communities and it will help fund a better railway. I hope to see areas around the railway positively transformed with new and refurbished shops, amenities, and extra facilities for local people and passengers.
“The sale will bring a major cash boost to help fund key projects across England and Wales as part of the Railway Upgrade Plan. Passengers are about to see a bigger, better railway, with more reliable, more frequent services, and upgraded stations and facilities as these huge projects finally come to a conclusion in the months ahead.”
The sale has been agreed across Network Rail and Government, and Network Rail is talking with existing tenants, staff and other stakeholders, who are being provided with information on the decision, impacts, and next steps.
NOTES TO EDITOR:
For bidder enquiries please contact Rothschild & Co who are handling the sale.