Commercial estate sale
In November 2017, we announced the sale of our Commercial Estate business in England and Wales, which is made up of around 5,200 properties which are not essential for running the railway. The majority of these are converted railway arches.
We have now agreed terms with Telereal Trillium and Blackstone Property Partners for the sale of this business for £1.46 billion.
Both parties have long and successful track records of operating large commercial estates across the UK and have adopted a ‘tenants first’ approach, cemented in a tenants’ charter. This offers a commitment to engage with all tenants and communities in an open and honest manner, and adhering to a set of principles in the management of the portfolio.
Proceeds from the sale will help to fund the Railway Upgrade Plan, which is improving and growing the rail network for the benefit of passengers and the wider UK economy, reducing the need for taxpayers to fund the railway.
FAQS
The Commercial Estate business operates within Network Rail Property; the commercial division of Network Rail. It manages around 5,500 properties in England and Wales.
We’re selling around 5,200 properties in England and Wales, the majority of which are railway arches. The sale also includes the business management platform.
Properties in Scotland and those that have an ongoing requirement to support the running of the railway are not included in the sale.
Our role is to run, improve and grow the railway and owning a non-core property asset like the Commercial Estate isn’t essential to that. The sale will generate £1.46 billion which will help fund the railway upgrade plan – the biggest investment programme in the railway since Victorian times. This means we can deliver planned improvements without placing an extra burden on the public purse.
The sale will also allow the new owner to invest in and nurture the estate to its full potential and enable Network Rail to focus even more on our core business of running a safe and growing railway.
Telereal and Blackstone, who will hold equal ownership stakes, intend to be long-term owners of the estate. Telereal will oversee the day-to-day property management of the portfolio.
Both parties have long and successful track records of operating large commercial estates across the UK and have adopted a ‘tenants first’ approach, cemented in a tenants’ charter. This offers a commitment to engage with all tenants and communities in an open and honest manner, and adhering to a set of principles in the management of the portfolio.
All current leases, agreements, notice periods and protections will be transferred to the new owners. The new owners are obliged to meet all current obligations to tenants.
The sites have been sold on a 150-year leasehold basis and Network Rail will retain access rights for the future maintenance and operation of the railway. The sale will not impact on the safe and efficient running of the rail network, train operating companies, freight operating companies or other operational partners.
Network Rail has Commercial Estate sites across Britain, however properties located in Scotland are not included in the sale.
A small number of sites outside of Scotland will be retained if they did not meet the criteria for inclusion in the sale e.g. where they have an ongoing requirement to support the running of the railway.
Network Rail will retain a team to manage any retained assets, including those in Scotland.
We expect to complete the sale towards the end of the year. Telereal and Blackstone Property Partners will then become landlord of the estate. However, tenants’ day-to-day contacts will remain the same, as will their lease arrangements and protections.
Network Rail will retain a team to manage properties that are not included in the sale. Tenants whose properties are not included may find their day-to-day contacts change when the deal completes. As such our team will be in touch with these tenants to ensure a smooth transition.
We are in the process of communicating with our tenants and stakeholders, providing information on the sale, the new owner, next steps and where to find out more information.
Anyone who has any questions or would like more information can get in touch on the contact details below.
Email: CommercialEstateSale@networkrail.co.uk
Phone: 0800 830 840 (09:00 to 18:00, Monday to Friday)