Under an agreement with Telereal Trillium and Blackstone Property Partners, Network Rail will sell its commercial estate portfolio. Proceeds from the £1.46 billion (EUR 16 billion) transaction will help fund the railway upgrade plan, bringing major improvements for passengers and reducing the need for taxpayers to fund the railway.
The portfolio is made up of around 5,200 properties in England and Wales, the majority of which are converted railway arches. 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.
Telereal and Blackstone will hold equal ownership stakes and intend to be long-term owners of the estate and Telereal will oversee the day-to-day property management of the portfolio.
“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,” Peter Hendy CBE, Network Rail chair, said.
Both parties have adopted a ‘tenants first’ approach, cemented in a tenants’ charter, which offers a commitment to engage with all tenants and communities in an open and honest manner.
“The arches portfolio is a unique and vital part of the UK 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. These tenants are a vibrant part of many local economies and communities,” Graham Edwards, chairman of Telereal, said.
Network Rail launched the sale of its commercial estate last November. The rail infrastructure manager has over 7,500 properties in its commercial estate.