Network Rail Selling Railway Arches — Impact on Small Businesses

Dr_Paul · 2 Jun 2018

From today's Guardian:

Thousands of small businesses based in railway arches across the UK are facing “extermination” as Network Rail seeks to push through a billion-pound asset sale.

From bakers to bike shops, mechanics to restaurants, many of the 5,500 arches across the UK’s major cities are home to traders and shop owners.

But since announcing they would be selling their commercial property business, Network Rail has been accused of trying to strong-arm many of them out of their arches with threats of eviction if rent increases of between 300% and 500% are not met.

There are also fears about what will happen to the businesses when the sale goes through, with a number of private equity firms interested in acquiring the vast block of real estate.

Continued here...

RailUK Forums

D365 · 3 Jun 2018

Like I always say:

Anything turning a revenue in the public sector will be sold off.

yorksrob · 3 Jun 2018

This sale will be a disaster for the maintenance of the railway and it is clearly being pushed by the free market clowns who infest the Establishment.

Mikey C · 3 Jun 2018

Who else will use these these rail arches, other than the types of small business that currently use them?

They've always been cheap for a reason. Make them too dear, and they'll remain empty

Gareth Marston · 3 Jun 2018

Its not just arches that have tenants worried about future rent increases.

WatcherZero · 3 Jun 2018

These are rent reviews after in some cases 7 years of previous rates so its not unexpected some could see large jumps where local rent for similar sized units on the open market has increased drastically, certainly round here every small unit is being filled with micro-breweries and café-bars even though they could squeeze in less than a dozen seated and perhaps another half dozen standing. Arches will always be priced at a discount to the rate of other comparable sized units but if the demand for them goes up so will the prices for the arches. Not every NR retail unit is an arch either.

pemma · 3 Jun 2018

Some of what's located under the railway arches in Manchester (some of which are now under Metrolink lines opposed to heavy rail) aren't what you'd expect to find there. The Comedy Store, which occasionally has performances recorded for radio and Ten Pin Bowling seem to be two of the more unusual ones!

Elecman · 3 Jun 2018

It will be interesting to see what Network Rail will have to pay to use the arches itself under the new owners

TBirdFrank · 3 Jun 2018

Do you honestly think that Network Rail will be selling without reserving access rights - at no cost??? Do You? Even they aren't that stupid!

This sale is mad Tory dogma of the worst kind. I worked through the twenty years asset sales following the dictat of the Grantham witch. That was bad enough, but this income is wrapped around the very railway itself and should never ever be considered for disposal except by economic and legal illiterates like May and Grayling - but - like Major and Norris before them they are barking mad and dont care what damage they do.

Apparently this income is being sold - on long lease - at a price of around four pounds for every pound of revenue being received in a financial world where the money to pay for it can be repaid over as much a thirty three years - i.e. up to 29 years clear profit! If, as a UK taxpayer you can justify that please tell me how!
Tory Britain - can I get off now please?

Kingham West · 3 Jun 2018

It’s even more crackpot than that sold in 4 per cent yield, cost of debt 2 percent .
I do wonder if ministers have been correctly advised , the costs of getting property back for network expansion will be massive , plus what happens when a gas canister goes off , and causes an accident , the new private landlords won’t give a dam about tenants provided they can spirit the rent to a tax haven .
It’s staggeting the Dft has not spotted the risk , perhaps not second thoughts , VTEC, GTR no , perhaps not .

whittlesfordok · 3 Jun 2018

A bit of a non story as rents will go up with demand. And selling off rail assets orginally build by private enterprise is full circle.

DarloRich · 4 Jun 2018

yorksrob said:
This sale will be a disaster for the maintenance of the railway and it is clearly being pushed by the free market clowns who infest the Establishment.

I said that at the time of the announcement. Sadly far to many here think this is a good idea.

Kingham West said:
It’s even more crackpot than that sold in 4 per cent yield, cost of debt 2 percent .
I do wonder if ministers have been correctly advised , the costs of getting property back for network expansion will be massive , plus what happens when a gas canister goes off , and causes an accident , the new private landlords won’t give a dam about tenants provided they can spirit the rent to a tax haven .
It’s staggeting the Dft has not spotted the risk , perhaps not second thoughts , VTEC, GTR no , perhaps not .

more to the point they don't care.

TBirdFrank · 4 Jun 2018

Its their mates getting richer, mates who will be giving them directorships when they do leave government.

Kingham West · 4 Jun 2018

I am not sure officials understand the long term costs over 125 yrs, the Annington and Mapley contracts have cost the Taxpayers Billions , no one seems to care .

eastdyke · 4 Jun 2018

Kingham West said:
I am not sure officials understand the long term costs over 125 yrs, the Annington and Mapley contracts have cost the Taxpayers Billions , no one seems to care .

Some comments:
125 years?, I am not at all sure that most politicians look much further ahead than 1 term of Parliament and the next election.
At least it's not the Government/Rail Industry that has to pay rent on the properties in this case. Rent increases are a fact of life in a well managed property business where demand is buoyant.
I think that in 2015 when the direction was made to divest the rail industry of arches and other incidental retail spaces that the rental income was worth around £266million pa. Rothschild & Co. were given the job of getting in the offers. It is believed that Guy Hands (who managed Annington's private equity fund in the MOD deal) may be one of the number of interested parties.

LAX54 · 4 Jun 2018

TBirdFrank said:
Do you honestly think that Network Rail will be selling without reserving access rights - at no cost??? Do You? Even they aren't that stupid!

This sale is mad Tory dogma of the worst kind. I worked through the twenty years asset sales following the dictat of the Grantham witch. That was bad enough, but this income is wrapped around the very railway itself and should never ever be considered for disposal except by economic and legal illiterates like May and Grayling - but - like Major and Norris before them they are barking mad and dont care what damage they do.

Apparently this income is being sold - on long lease - at a price of around four pounds for every pound of revenue being received in a financial world where the money to pay for it can be repaid over as much a thirty three years - i.e. up to 29 years clear profit! If, as a UK taxpayer you can justify that please tell me how!
Tory Britain - can I get off now please?

I would not put your week's wages on that quote !

Kingham West · 4 Jun 2018

Nor would I trust the quote , I have to deal with people who have a terraced house in Kingston upon Thames, and think they understand the property industry . They don’t .
Having spent 30 years in the industry , I know what sharks and tax dodgers and spies they are , pity the Treasury baffons cant spot a con merchant at 5 yards .

eastdyke · 4 Jun 2018

Kingham West said:
Nor would I trust the quote , I have to deal with people who have a terraced house in Kingston upon Thames, and think they understand the property industry . They don’t .
Having spent 30 years in the industry , I know what sharks and tax dodgers and spies they are , pity the Treasury baffons cant spot a con merchant at 5 yards .

'The Treasury' doesn't need to spot a con merchant, the job has been 'given' to Rothschild & Co. Ah - sorry - silly me, they are members of the same club.
Do you usually refer to your clients, or at least the people that you 'deal with' as baffons? As by inference from your first paragraph that would seem to be the case.

DaveNewcastle · 4 Jun 2018

yorksrob said:
This sale will be a disaster for the maintenance of the railway and it is clearly being pushed by the free market clowns who infest the Establishment.

TBirdFrank said:
Do you honestly think that Network Rail will be selling without reserving access rights - at no cost??? Do You? Even they aren't that stupid!

There ARE clauses which (among a long list of conditions) require inspection access to the insides of the arches, that internal structures do not contact the arch, that the facade is sealed to the arch only within ca 200mms of the boundaries, and that essential access is assured.

DarloRich · 5 Jun 2018

DaveNewcastle said:
There ARE clauses which (among a long list of conditions) require inspection access to the insides of the arches, that internal structures do not contact the arch, that the facade is sealed to the arch only within ca 200mms of the boundaries, and that essential access is assured.

surely not - Anyone would think the property people employed by NR were professional property experts!

Network Rail Selling Railway Arches — Impact on Small Businesses

Established Member

RailUK Forums

Veteran Member

Veteran Member

Established Member

Established Member

Established Member

Veteran Member

Established Member

On Moderation

Member

Member

Veteran Member

On Moderation

Member

Established Member

Established Member

Member

Established Member

Established Member

Veteran Member