Out-Law / Your Daily Need-To-Know

New Network Rail property company to raise funds through asset disposal and housing development

11 May 2016, 1:13 pm

UK railway infrastructure authority Network Rail has set up a new property company with the remit of generating £1.8 billion through the disposal of assets and the delivery of housing land.

The authority announced last week that Network Rail Property Limited had been set up to “accelerate the release of value from [Network Rail’s] property portfolio”. It said that David Biggs had been appointed as managing director of the new company and that the company intended to appoint “two further non-executive directors with significant experience in the commercial and residential property market and in leading complex property disposal and acquisition transactions”.

The announcement said funds generated through asset sales and redevelopment would be reinvested into the UK’s rail network.

The UK government said in the 2016 Budget that the Homes and Communities Agency (HCA) would work with councils and Network Rail to release land around railway stations for regeneration, including for housing development.

The HCA and the Department for Communities and Local Government issued a joint statement last month calling for “at least 20 local authorities” to bring forward proposals to take part in the government’s programme of redevelopment surrounding railway stations.

Planning expert Sophie Walter of Pinsent Masons, the law firm behind Out-Law.com, said: "Network Rail’s new development arm is a very positive move. It’s good for market confidence, demonstrating their commitment to working on the recently announced initiative with the HCA and DCLG to unlock brownfield land around stations for housing. Local authorities have been quick to realise the benefits this could bring and some – such as York – have been working closely with Network Rail and the HCA for some time already, making impressive progress. "

"Sites close to transport hubs continue to be attractive for developers looking to return higher yields by increasing densities and to planning authorities looking for brownfield housing numbers," said Walter. "It will also be interesting to see how the devolution picture unfolds next May, as some combined authorities look to promote development corporations in a similar space, or even to take over stations."