Network Rail has taken the first step towards selling off its £1bn commercial property portfolio after hiring bankers to conduct a review of its estate.
The government-backed organisation, which runs all of Britain’s rail infrastructure, confirmed that it is working with boutique investment bank Rothschild to explore ways in which it can “make more use” of its land. It is also seeking out specialist property advisers to help with the review and is expected to appoint a firm in the coming weeks.
A spokesperson said: “Network Rail's focus is on improving our railway and delivering a huge programme of investment. Every penny of the profit we make from our commercial property is reinvested in the railway, reducing the funding needed from taxpayers to pay for the network.”
Network Rail owns more than 7,000 properties nationwide and 5,500 arches let to small- and medium-sized businesses ranging from garages to fishmongers and nightclubs.
These include Brixton’s arches on Atlantic Road and the Vinopolis site near Borough Market at London Bridge, which is being turned into a £300m retail hub next year after European investment firm Meyer Bergman bought the leasehold in February.
It collected around £270m in rent from its tenants last year.
The review, first reported by the Independent, is part of a complete overhaul of the debt-laden body under former Transport for London commissioner Sir Peter Hendy, who was drafted in as chairman in June.
Network Rail was fined £2m last week for failing to keep Britain’s trains running on time and for upgrades that caused severe disruption at London Bridge station.
The fine was a further blow to the rail group, which has had to freeze some rail improvement works after transport secretary Patrick McLoughlin said that rising costs and missed targets made its plans for £38.5bn of upgrades untenable.