Railway arch privatisation poses threat to independent businesses

ancient-arch-arch-bridge-507410Many a small business has blossomed beneath a humble railway arch.

These once unwanted and dark spaces have been populated by an amazing range of fledgling entrepreneurs, drawn by affordable rents and prime town and city centre locations.
They have even passed into the nation’s psyche via our small screens. The railway arches in Coronation Street provided a home for Nick’s Bistro and Kevin Webster’s garage – before it burnt down. And, in EastEnders, there are always plenty of thrilling story lines at ‘arch-villain’ Phil Mitchell’s car repair business.
However, in the real world a new dramatic storyline has emerged which threatens the livelihoods of thousands of independent businesses operating from commercial railway arches.
It follows an announcement by Network Rail that it plans to sell off its commercial property business across England and Wales as part of a billion pound asset sale which will see current leases transferred to the new buyer.
Now a vast army of small businesses – from garages to hairdressers, gyms to cafes – face a very uncertain future. They fear that ordinary local businesses will simply be priced out of existence.
More than 4,000 commercial railway arches will be sold off by the end of this year as a package and already several global investment firms are expected to join the bidding.
Tenants have already had to bear the cost of unprecedented rent increases over the past year, some as high as 500 per cent, and a numbers have already fallen by the wayside.
Some suspect this rent review was carried out to ensure that the sell-off look more attractive to investors. Those who remain fear the impending privatisation only signals the start of further rent increases.
In reality, only high-mark up operations such as bars and clubs may be able to absorb the generally unaffordable increases.
My firm, Hilton Smythe, facilitates the sale of small and medium sized businesses, and I believe action must be taken to protect these commercial units which provide valuable spaces for innovative entrepreneurs.
Furthermore, they add a vitality and vibrancy to town and city centres up and down the country at a time when independent businesses are seen as one answer to the current retail downturn.
Of the 4,455 arch spaces let out by Network Rail, fewer than 30 are operated by national chains, which emphasises just how important they remain for the independent sector.
The publically owned body was ordered by the Government in 2015 to raise money from its assets and has argued that the money will be reinvested in the rail network.
But this short-term gain is at the expense of thriving small businesses and could further add to the woes of our town and city centres.
The asset stripping exercise fails to recognise that the railway arches could well be left deserted by unrealistic rental expectations. This would represent a real loss to communities and a blow to passion-driven small businesses.
Surely Government policy should support small businesses rather than benefit the coffers of large global investment firms.
However, the businesses involved have already banded together into a national group called Guardians of the Arches, and have written to Transport Secretary Chris Grayling urging him to stop the privatisation.
Many long-term tenants have carried out work at their own expense to improve the previously unwelcoming arches and now face being forced out. For them the situation is doubly distressing.
Let’s hope that the Government and tax payer-funded Network Rail see sense and preserve our commercial railway arches and allow the businesses using them not only to survive, but prosper.
They are a vital part of this country’s rich retail mix and not an opportunity to make a quick financial gain.

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