Procurement · 6 August 2018

Government urged to protect archway traders ahead of 1.5bn Network Rail sale

Network Rail archway traders
Network Rail is expected to sell its commercial estate by the end of 2018
The government has been urged to intervene in the sale of Network Rail’s property portfolio to protect the archway traders facing an uncertain future.

Network Rail the UK’s largest small business landlord announced last year that it’s commercial assets would be sold by the end of 2018. For the archway tenants running enterprises, there is no guarantee of security once the property falls into new hands.

Four buyers are still in the running to purchase Network Rail’s 1.2bn-£1.5bn commercial estate, with a final sale expected by the end of 2018. Campaigners claim a sale would not guarantee the interests of thousands of traders operating in rail archways.

Pressure on the government to protect such businesses after the sale of Britain’s 4, 455 railway arches has come from Guardians of the Arches and the New Economics Foundation, whose calls are heard as new research demonstrated the value of archway businesses to the economy.

According to findings from the New Economics Foundation, small archway businesses contribute 725m to the economy every year, with each firm worth on average over 160, 000 to GDP.

A survey of archway traders also a strong manufacturing presence, with one in four businesses operating in the productive sector. Meanwhile, the 30% on tenants in vehicle sale and repair alone contribute 200m to the economy each year.

NhI Chu, co-owner of Chu’s Garage in Hackney, East London is one business owner hit with a substantial rent increase ahead of Network Rail’s sale that the founders believe is unsustainable.

?My family has been running a garage out of the same arch for 30 years, after escaping Vietnam as refugees, ” Chu said.”In that time we have built up trust in the community and we have a large and loyal customer base.

“Now, thanks to a huge rent increase by Network Rail in advance of the sale of the estate, we are on the verge of going bankrupt.”

Chu's-garage
Photo: Sarah Ainslie for New Economics Foundation
Chu added: We have a simple request of the government. Intervene in this sale and show that you really do support independent traders and entrepreneurs. Now is the time to stand up for small businesses and the people who rely on them.

The highest rent increase demand received by an archway trader was received by a 93-year old garage owner in Clapham. Campaigners uncovered that the tenant of 60 years received a letter informing of a proposed rent increase from 33, 000 per annum to 147, 000 a 345% increase in a single year.

Looking outside of the capital, Sarah Arnold, researcher at the New Economics Foundation, said small business owners across Britain were at risk.

when you add up all of the ways in which they contribute to the economy not just their own activities but the local supply chains they create it amounts to a lot. But all of that dynamism is under threat.”

“Every day we speak to small business owners who have had to shut down or relocate because of massive in-year rent increases, often leaving arches vacant for years.”

Arnold added: “With the impending sale of the estate, their future is even more uncertain. When you look at how much these arches businesses contribute to our economy, it doesnt make any sense to put all of that at risk.”

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East End

 

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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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