Hong Kong metro operator MTR Corporation is eyeing chunks of the UK rail network for property development.
MTR, which is listed on the Hong Kong stock exchange with a £19.6bn market capitalisation, wants to bring its expertise in property development at transport hubs to the UK.
Jeremy Long, chief executive of MTR’s European business, said it had the balance sheet to invest heavily in the UK and was waiting to see what Network Rail was prepared to sell. “We’ve been looking for opportunities where we’re involved operationally and can add value.”
Overseas examples of MTR’s “rail-plus-property” projects include a 1,700-home and shopping mall scheme on top of a train depot serving Shenzhen metro’s Longhua line in China.
MTR already operates transport networks in the UK, including the London Overground and Crossrail. However, it is interested in Network Rail stations and possible joint ventures with local developers to build mixed-used schemes around transport hubs.
Citigroup has been appointed by Network Rail to advise on the use of major stations including potential sales. Network Rail is the freeholder of all 2,500 UK stations, the majority of which are managed by train operators on a short leasehold.
Network Rail is also selling its £1bn commercial property portfolio, advised by Rothschild, 115 train depots, represented by PWC, and 570 freight sites, advised by Deloitte.
Andy Pyle, UK head of real estate at KPMG, which is advising Network Rail on the disposal of its electrical power assets, said: “We expect a lot of different people will be looking at the stations including some of the major UK listed property companies, big sovereign wealth funds and pension plans.”
A spokeswoman from Network Rail said: “NR is seeking to raise £1.8bn from property assets as a contribution to the extensive rail upgrade programme across Britain. Assets being considered include NR commercial estate, other property assets and development opportunities but does not include the managed stations.”
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