Published on July 5, 2018 | by Alastair Gilmour0
Concerns are mounting that many of the North East’s pubs, restaurants and related beer businesses are under threat from what has been described as an “insane” property deal.
Network Rail, the owner and infrastructure manager of most of the rail network in England, Scotland and Wales announced last November that it was selling its commercial estate business, putting all of its 5,500 railway arch properties up for sale – including 470 properties across the North East – in one portfolio believed to be valued at around £1.3bn.
On Tyneside alone, Errant Brewery, The Box Social Taphouse, Split Chimp, Prohibition, Block & Bottle and Station East have set up in recent years in railway arches, with a new venture by the owners of The Old Fox in Felling, Gateshead, having gone a long way down the line of securing a sister outlet.
There are huge doubts that global investment firms, fund management companies, financiers and the world’s biggest real estate investment organisations who have expressed an interest in the sale are likely to have their interests at heart.
An action group, The Guardians of the Arches, made up of hundreds of affected archway businesses has launched a petition calling for Network Rail to back down from the sale, claiming thousands of small businesses face “extermination” if the property deal goes ahead.
Heading the region’s thrust is Katie Cullen from award-winning butcher and bottle shop, Block & Bottle, whose railway arch premises is on Wellington Street, Gateshead. Katie was invited to address Parliament last month alongside other Guardians of the Arches.
This issue is so far-reaching that Labour leader Jeremy Corbyn was among those who turned up to listen and to sign a protest letter to transport secretary Chris Grayling – along with colleagues John McDonnell, Rebecca Long Bailey, Middlesbrough MP Andy McDonald and Big Issue co-founder John Bird.
Katie says: “Gateshead MP Ian Mearns also talked about the railway arches in his constituency going from derelict and barely used ten years ago to the thriving hub it is now, and the risk posed of returning to empty arches if the sale goes through and we feel forced out. Ian was brilliant and we definitely have his full support.
“A year ago there were only two of us employed by Block & Bottle. Within our first six months we hired a butcher part-time and six months later he’s full-time – and we’re about to look for our next employee. The reasonable rents in the arches have allowed us to expand and just after a year of opening we have started a second small business. This would not be possible without the reasonable rents provided by Network Rail.
“Gateshead is an area which has in the past struggled in relative terms – however, the thriving railway arches have given confidence to By The River Brew Co and Hadrian Border Brewery to set up ventures nearby.
“If this sale causes rents to rise further it will only push the small business out and destroy hotspots of culture and creativity as is already happening in other places. These businesses will move further out of town centres into alternative accommodation leaving centres deserted and pushing ingenuity into harder-to-access areas.
“Network Rail has said our tenancies will be passed on to the new buyer, but this also means they will then have the opportunity – and will likely use clauses already in our tenancy agreements – to push up rents or push people out. Network Rail receive £240m rent per year, so a quick sale like this only equates to six years’ rent.”
Will Brett of the New Economics Foundation which is supporting the Guardians of the Arches, says: “Dynamism and entrepreneurialism is being threatened in one massive property deal. We won’t rest until the future of the arches is secure.”