Network Rail considers sale of £1bn commercial property portfolio
The state-owned group's collection of more than 5,500 commercial properties in England and Wales is estimated to be valued at around £1bn. The majority of these properties are spaces in railway arches and will be sold on a leasehold basis to ensure Network Rail continues to have access to its infrastructure at short notice.
The decision to sell the commercial estate business as one portfolio comes more than two years after Network Rail first appointed Rothschild to evaluate its property business. The company hopes this deal will help to raise billions that can then be invested in the operator's railways after they've seen intense criticism from the UK rail watchdog for poor management, missed punctuality targets and a slow approach to modernisation.
The group's debt has continued to rise since it was effectively re-nationalised. A sale would be the first significant asset disposal since Network Rail’s debt was shifted on to the government’s balance sheet in 2014, restricting the operator’s ability to borrow money.
Mark Carne, chief executive at Network Rail, said the latest asset sale would allow it to focus on its core business of running the railway. “It’s a tangible example of our approach to capital discipline, our approach to living within our means, recognising that we have to behave like a business and if our growth ambitions exceed our funding then we have to look at other ways of raising funding.”
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