Network Rail has sold off its converted railway arches for £1.5billion.
Railway bosses have sold off converted railway arches for £1.5billion.
The announcement came after many small business owners with firms occupying space under the arches gave up their bases because of increases in rent by as much as 350 per cent for some.
Some arches have remained empty for years or even used for illegal raves in Bethnal Green.
Network Rail vowed to spend the proceeds on funding upgrade plans after announcing it had sold its commercial estate to property firm Telereal Trillium and investment company Blackstone Property Partners.
Its chairman Sir Peter Hendy said: “This deal is great news. For tenants it will mean significant commitment and investment.”
A spokesman for the Guardians of the Arches campaign group – which had called for the sale to be put on hold to let others bid – said: “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.”
The group backed by the East End Trades Guild and the New Economics Foundation thinktank had set down 13 ideas in a bid to see the properties managed with tenant involvement.
Tower Hamlets mayor John Biggs said: “The rent hikes imposed on tenants were unreasonable, but it is important we now focus our efforts on making sure the new landlords live up to the commitments they are making.
“It is essential that the issue of rent reviews is looked at in a clear and transparent way as a priority and we look forward, with interest, to learning more about the new financial support structures they are proposing.
“Small firms making an honest living in the arches must not be priced out of the affordable workspaces they rely on.
“We will continue to support them and the Guardians of the Arches campaign to ensure that they can continue trading for many years to come.”
Telereal and Blackstone said they would put tenants first offering to engage with them “in an open and honest manner”.
The campaign spokesman said: “If Blackstone and Telereal successfully purchase the estate we trust they will follow up on this stated intention.
“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.”
David Biggs of Network Rail’s property arm said he was confident small businesses would thrive under the new owners while Telereal boss Graham Edwards said staff were excited at the prospect of working with the tenants.
Network Rail’s 5,200 properties are to be sold leasehold with the infrastructure manager keeping access rights.
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