David Biggs is eight weeks into the job as managing director of Network Rail Property.
A senior figure in Network Rail’s property division since 2002, he has been at the helm of the rail authority’s first dedicated propco, created to accelerate a £1.8bn asset disposal programme to fund investment into the UK’s network, since 1 April.
Can he bring the old network up to speed? Biggs talks to EG about the challenges ahead.
What was the purpose of setting up Network Rail Property?
To oversee both the day-to-day operations and performance of property activities within Network Rail and also the disposal programme, which came out of the Hendy Review [an investment programme published by Sir Peter Hendy for the transport secretary in November 2015]. Other areas of focus are finding ways to release land for housing and creating a better model for managing and operating our stations.
Are you going to be selling any stations?
That is not what we are doing. We are finding out whether there is a better model for short-, medium- and long-term asset management of our stations for our passengers. That may mean that we bring in expertise and funding from third parties.
Do you have an asset list?
All our land is operational. Following privatisation in 1994, the land deemed not to be needed by the railway was held by the British Railway Board. Over the past two decades it has been largely sold off. My team’s role is looking at the estate and seeing whether we should get it out of the operational railway. We do have a list of sites we are working on where we believe there is true value. We go through a process within Network Rail to get a railway’s agreement that it is surplus to current and anticipated use.
Would you consider parcelling up sites for sale or creating a framework like TfL?
We are looking to see if we could parcel up sites to offer to the market to speed up the delivery of residential. I have not seen the conclusion of that work but it depends on a number of sites that we could free up. They may go to a number of developers or a single developer.
How are you going to accelerate the release of land for housebuilding?
The property board [chaired by Chris Gibb and recruiting two non-executive directors from the industry] will help us property professionals at Network Rail, perhaps giving us greater focus on our objectives, how we connect with the operational railway and how processes can be dealt with speedily.
When we looked at our processes we found that our land is so crucially connected with the railway that we need to make sure what we are proposing is safe – that we are not selling something that we will want to buy back. We are recruiting a dedicated residential team.
What is the timescale for your disposal programme?
We are bringing things to market and working with government agencies, such as the Homes and Communities Agency, which can bring some of the funds that government has allocated to kick-start housing. We could transfer land to those agencies for them to progress. In the next six to 12 months we will be able to say more about our programme.
Property market reaction
Richard Green, director – design, planning and economics, AECOM:
“With numerous high-profile locations in the heart of major cities, Network Rail has an important role in leading urban renewal. This is not without challenges, most notably in northern cities where land value may fall short of the costs associated with brownfield remediation and other site development overheads.”
Charlie Hustler, land director, Essential Living:
“Network Rail has the ability to tap into potential investment keen to access well-connected sites. With demand for renting on the rise, partnering with build-to-rent providers could allow it to fulfil its ambitions on a speedy delivery.”
Melanie Leech, chief executive, BPF:
“The recognition of stations as opportunity areas is something we support. People want to live near a transport hub and businesses want to benefit from high levels of footfall, and there is the potential for great places to be delivered through these developments.”
Full steam ahead: assets to be sold and options for how sales would work
£1bn Arches portfolio: 5,600 properties let principally to small businesses such as restaurants, nightclubs and fishmongers centred around the old railway arches. Rothschild is advising Network Rail on the sale, which could be sold piecemeal or as a portfolio.
Freight sites: More than 570 sites across the country, providing goods and services through the rail network. Biggs envisages about 90% of these being sold, mostly as freehold disposals. Some will be maintained for freight services, others will be released as part of a strategy to dispose of land for 7,000 homes by 2020.
Train depots: Some 115 train depots in the UK do not need to be owned by Network Rail and could be sold as income-generating assets. These are likely to be long-leasehold disposals or maintained partially by Network Rail to ensure their continued use as maintenance depots.
Stations: Options include third-party investors to regenerate some of the bigger stations. Biggs said he was keen to replicate the £500m Solum regeneration jv between Network Rail and Kier to regenerate stations and build houses at Twickenham, south-west London, and at Redhill and Guildford, both in Surrey.
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