Goldman Sachs and Wellcome Trust have pulled out of the running to buy Network Rail’s £1.5bn Arches portfolio.
The decision comes amid pressure from protest group Guardians of the Arches, which claims that the sale will result in the ultimate buyer raising rents to the point that the small and medium-sized businesses that occupy many of the properties will not be able to remain.
The group is due to meet transport minister Jo Johnson at 4pm today.
CK Asset Holdings, Blackstone with Telereal Trillium, Terra Firma and Kildare make up the remaining bidders on the shortlist. It is understood that bidders have been asked to increase the emphasis on their long-term business plan over the past fortnight in their proposals.
A joint venture between Legal & General Capital and Lendlease, which had been one of the lead contenders for the portfolio in the early stages of the sales process, did not provide a bid aggressive enough to see the pair through to the most recent round of bidding, in part due to similar pressure group concerns.
The portfolio contains 5,476 properties of which around 4,500 are railway arches. It has a vast range of occupiers including restaurants, bars, offices, shops, leisure operators, breweries, car washes, gyms and healthcare centres.
Spread across England and Wales, around 80% of the portfolio’s value is located in London, with much of the remainder located in Manchester and Birmingham.
Rothschild is advising Network Rail. Square Metre Asset Management had been underwriting the portfolio for Goldman Sachs and Wellcome.
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