Is Great Britain’s Network Rail about to sell of some of the most important, and most lucrative from a retail point of view, stations on its network?
A report in this morning’s Independent newspaper stated: “Bankers at Citigroup have been hired to look at options for 18 major stations, such as London Waterloo, Reading, Leeds and Edinburgh Waverley, which most eye-catchingly include either outright sales or the handing of concessions to big firms that would last decades.”
Network Rail has been working hard to increase its retail portfolio, and a new mezzanine level opened at Waterloo in 2012 to increase the retail offering while, at the same time, decluttering the concourse by removing various old kiosks.
However, it was announced just last November that the company, now under government control following reclassification as a public sector body, was aiming to raise £1.8 billion by selling off ‘non-core’ assets. This morning’s speculation could form part of that.
When asked about the story, Network Rail’s response seemed to indicate there was something in it. “We’re taking a long hard look at our assets, ensuring we keep what we need to grow and expand the railway but then looking at ways we can realise best value from the rest to reinvest.”
If stations are ‘non-core assets’ to the railway, what even is a ‘core asset’?
It is the station retail that is the non-core asset (possibly) – not the station itself…
But NR could lease the retail and keep the station, or sell the station and lease back the platforms and ticket office.
They have several options…
I do like how few London terminus railway stations do look much nicer and cleaner with retail facilities on both ground and upper floors including Liverpool Street, Waterloo, London Bridge, Blackfriars, King’s Cross, Victoria and St. Pancras International railway stations in Central London aswell other major railway stations including Birmingham New Street, Manchester Piccadilly, Manchester Victoria and Leeds.
Also missed out Reading, Edinburgh Waverley and other major railway stations that have been refurbished and redeveloped.
Not a good idea. Quite a few hotels have similar arrangements with an asset manager/owner and an operator. The owner spends as little money as possible with the operator struggling to maintain the brand due to this.
At present Network Rail have control over the stations and have a rental income stream from the retail and food outlets which must be lucrative otherwise they wouldn’t be able to sell these assets on. The trouble is an investor will structure a deal in such a tax efficient manner so that UK corporation tax is minimised plus they will look to spend as little as possible on maintaining the asset. If anyone can remember how these stations looked in the 1970/80s and how they look now I feel that in a few years time the stations will look and feel tired again due to minimal investment and maintenance.