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Thursday 24 Sep 2015

Network Rail discusses the future of the Brixton Arches with tenants

Region & Route:

| Southern

Network Rail has written to all of its tenants at the Brixton Arches to outline how they will be compensated during improvement work being carried out next year. 

The company had offered to meet with tenants individually to discuss compensation and listen to feedback, but a number of the tenants requested compensation offers in writing.  However the offer for individual meetings with tenants is still open and Network Rail would welcome any such discussions.

The project at Brixton will make sure retail units are up to modern standards and that the arches themselves can continue to safely carry tens of thousands of people by rail each day.

Network Rail is Britain’s biggest landlord to small and medium sized businesses because it provides decent, affordable premises in prime locations.  Its commercial estate is home to a rich and diverse mix of tenants, from micro-breweries and hairdressers to dance studios and restaurants.  Every penny of income from these properties is reinvested in the railway, helping to keep costs down for passengers and taxpayers.

Network Rail has offered its Brixton tenants the services of an independent local commercial agent to help find temporary relocation premises if required.  The possibility of providing temporary accommodation for some of the businesses is also being considered at the nearby Valentia Place.

Digby Nicklin from Network Rail’s commercial property division said: “Brixton has a rich and diverse cultural mix and our tenants are part of that.  We have made it clear to all of the tenants within the arches that they have a right to return to a refurbished unit on completion of the scheme.

“The vast majority of businesses that rent our properties are small businesses and Brixton is no different. Of the 4,000 arch units that we manage in London, fewer than 20 are leased to chains.”

Network Rail has not yet made any final decisions about the refurbishment scheme and continues to listen to feedback from tenants. However, compensation offers are an important part of the proposed refurbishment scheme and, whether tenants choose to leave permanently or return, the compensation packages and stepped rent scheme have to be discussed with those who will be affected.

Digby Nicklin continued: “We value our tenants, which is why the compensation offer we’ve been able to make recognises their contribution to the local community and the phased rents for existing tenants who wish to return a refurbished unit underlines our desire to keep those who wish to stay at the heart of Brixton.  For those tenants who want to come back we’re looking at a stepped rental programme that will slowly bring them back to open market values.”

 Example of Network Rail’s stepped rent scheme (based on Brixton Arches average rent).

• Current average rent of Network Rail owned Brixton arch.
  • £21 per sq ft
• Rent on returning after project completion.
  • Years 1-3 £26.45 per sq ft (50% discount of 2015 Rental Value*)
  • Years 4-5 £39.67 per sq ft (25% discount of 2015 Rental Value*)
  • Years 6-7 £52.89 per sq ft (2015 Rental Value*)
• At year 6, rents will increase to 2015 market levels for two years before the first true open market rent review at the beginning of year 8.
• Overall this will mean a gradual increase to 2015 market rates by 2022 (at the earliest).

* A 2015 average market rent has been assessed at c.£52.89 per square foot by two independent commercial property agents.

NOTES TO EDITORS

• Digby Nicklin’s Q&A can be found at https://www.youtube.com/watch?v=LUNOzyiHX_4
• A broadcast quality version of the Q&A is available on request.
• None of the tenants have been served with eviction notices; a consultation process began in February of this year and Network Rail has pledged that no one will be required to leave their premises before March 2016.