Telereal and Blackstone attempt to reassure Network Rail Arches tenants

Telereal Trillium and Blackstone have written to Network Rail’s Arches tenants, promising them a comprehensive consultation, in an attempt to get ahead of any potential protests after being chosen as the preferred buyer for the £1.46bn portfolio. The joint venture partners added in the letter that they had a “clear ambition to invest” in the properties, including in hundreds of currently unused arches to create more local business space. “Both Blackstone and Telereal Trillium are making this acquisition through very long-term capital vehicles, with a view to owning this estate for decades,” the jv partners said. Once the consultation has concluded, an enhanced tenants’ charter is to be published by Telereal and Blackstone to provide clear principles, as well as a code of conduct for the management of the estate. In addition, an engagement team will be put in place to establish regular communication. The jv partners said they were in the process of developing ways to provide financial assistance and other forms of support for those tenants facing financial pressure. The sale of the 5,200-asset portfolio caused concern for many of the small business owners based in the railway arches (which make up a large chunk of the portfolio) as many are reportedly already feeling under pressure from large rent increases. Guardians of the Arches, a group representing some of the business owners, previously wrote to and met with transport secretary Chris Grayling to seek assurances. A spokesperson for the Guardians of the Arches said: “Throughout this process we have sought to ensure that small businesses are genuinely protected so that the arches can thrive. We continue to dispute whether selling off the whole estate in one job lot is the best way of supporting small businesses and the local economies which rely on them. “There is a long way to go in the sale process, but if Blackstone and Telereal successfully purchase the estate we trust they will follow up on their stated intention to put ‘tenants first’ in their management of the estate. “A starting point would be to meet our demands for a full, transparent rent and lease audit, and to recognise Guardians of the Arches formally as a tenants’ association. We represent hundreds of businesses, and our number is growing every day. It is in the interests of all concerned that our proposals are taken on board.” The railway arches house a vast range of occupiers, including restaurants, bars, offices, shops, leisure operators, breweries, car washes, gyms and healthcare centres. Spread across England and Wales, around 80% of the portfolio’s value is located in London, with much of the remainder in Manchester and Birmingham. Main image © Steve Parkins/Rex/Shutterstock To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette