Network Rail has today announced it is officially kicking off the sale of its commercial property portfolio, in an effort to provide "a significant injection of cash" into the railway infrastructure firm.
Some 5,500 properties will be up for sale in England and Wales, the majority of which are spaces in railway arches. Most will be sold as leasehold with Network Rail retaining the freeholds to ensure access rights will be unaffected.
State-owned Network Rail, which controls 2,500 stations, as well as tracks and tunnels on Britain's rail network, said it had made the decision as its commercial estate business is a non-core property asset, and not necessary for the running of the railway.
Rothschild has been appointed to handle the sale.
Current tenants, including many small businesses, will transfer to the new buyer with their existing leases and notice periods unchanged, while Network Rail said "considerable potential" exists to develop unused spaces to allow local businesses to develop.
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.
Network Rail spends £130m every week on infrastructure within the UK, and is after further investment to plug into significant projects such as the Thameslink programme, Crossrail and Waterloo's upgrade.
It has previously outlined plans to raise £1.8bn from non-core asset sales to fund its hefty infrastructure projects.
Network Rail has faced scrutiny from the UK rail watchdog over missed punctuality targets, while transport secretary Chris Grayling pushed back his network funding decision in July, saying he needed more assurance on costs, and that Network Rail's progress on improving efficiency in recent years had "fallen short" of his expectations.
Last month, the government announced £48bn will be spent on maintaining and operating Britain's rail network over the five years from 2019.
A direct grant will be provided of up to £34.7bn for spending between 2019 and 2024, with the Department for Transport saying total spending will be around £47.9bn, when Network Rail's expected income is calculated and added to the amount.