5,200 firms face rent hike after £1.5bn railway deal

NETWORK Rail is selling thousands of railway arches to two property groups for £1.5bn – raising fears the small businesses which occupy them could be hit with steep rent hikes.

The deal with Telereal Trillium and Blackstone Group includes some 5,200 converted arches, with tenants ranging from barbers to bakeries and gyms.

But the sale has been strongly opposed by the small companies based in the arches. Many have already been forced out by large rises under Network Rail, which is owned by the state.

Last night critics urged ministers to intervene and stop the sale or to put in place restrictions that would protect small firms.

Campaign group Guardians Of The Arches, which represents businesses based in the arches, said: ‘Throughout this process we have sought to ensure small businesses are genuinely protected so the arches can thrive.

We trust [Blackstone and Telereal Trillium] will follow up on their stated intention to put tenants first.’

Labour’s rail spokesman Rachael Maskell condemned the sale as ‘ a short-term decision that will undermine the financial sustainability of the railway and damage small and medium-sized enterprises’. She said: ‘Archways are both an asset and a revenue stream for Network Rail, so this move is highly irresponsible. The secretary of state must intervene and prevent this sale.’

In a joint statement, the companies said: ‘We will remain particularly sensitive to the small businesses that have been long-term tenants of the Network Rail estate, and are committed to ensuring that the unique value they bring to their local communities is maintained.’

Sir Peter Hendy, chairman of Network Rail, said the deal ‘will mean significant commitment and investment’ for the tenants.

A Government spokesman said: ‘Tenants’ rights have been safeguarded and all current agreements will be fully honoured.’