Blackstone and Telereal buy Network Rail’s commercial properties for £1.46b

Blackstone Property Partners and Telereal Trillium have partnered to buy Network Rail’s portfolio of around 5,200 properties for £1.46 billion ($1.9 billion).

Network Rail, the owner and infrastructure manager of most of the rail network in Britain, said the sale consisted of about 5,200 properties, the majority of which are converted railway arches.

Telereal will oversee the day-to-day property management of the portfolio.

“The arches portfolio is a unique and vital part of the U.K. economy,” said Graham Edwards, co-founder and chairman of Telereal. “We are tremendously excited by the prospect of working with its entrepreneurial tenant base — made up of car mechanics, bakeries, micro-breweries, restaurants, and just about every type of business you can think of. These tenants are a vibrant part of many local economies and communities.”

The sale will help fund the railway upgrade plan, bringing major improvements for passengers and reducing the need for taxpayers to fund the railway. Network Rail launched the sale of its commercial estate last November.

The sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway.