Blackstone eyes full ownership of £2bn UK railway arches portfolio

Blackstone, the leading global commercial property investor, is close to acquiring full ownership of a £2bn portfolio of more than 5,000 UK railway arches.

The US-based private equity firm is set to buy out TT Group’s 50% stake in The Arch Company, which they co-purchased from Network Rail in 2019 for £1.5bn.

The railway arches, a defining feature of Britain’s urban landscape, are home to a variety of small businesses, from breweries to repair shops. Since acquiring the portfolio, Blackstone and TT Group have invested significantly in the properties, including refurbishing 1,400 derelict arches. However, the acquisition also sparked concerns over rising rents, particularly during the pandemic. The Arch Company responded by offering rent holidays, a hardship fund, and a tenant charter negotiated with tenant associations.

The deal is expected to enable TT Group, one of the UK’s largest real estate investors, to reallocate capital for other ventures. For Blackstone, full ownership would provide greater control over the management and future development of the portfolio.

While the transaction remains under negotiation, it underscores private equity’s expanding footprint in the UK’s property sector.

Source: Financial Times

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