Guardians of the Arches: Hackney traders fear being driven out as Network Rail announces £1.46bn sale
- Credit: Archant
Arches traders in Hackney have reacted to Network Rail’s announcement today that it has agreed to sell the estate for £1.46bn to two real estate firms.
The Guardians of the Arches, formed in London Fields 18 months ago to fight rent hikes, had spent the last six months trying to stop the sale and won support of the Labour party at a Parliament meeting.
But the rail firm has announced it will sell 5,200 properties – 4,455 of them arches – to Telereal Trillium and Blackstone Property Partners. The money from the sale will help plug its £1.8bn deficit, as per an agreement with the government.
Network Rail chair Sir Peter Hendy said the deal was “great news” and both buyers have expressed their excitement about working with small businesses. But Hackney’s traders aren’t convinced.
They believe that despite Network Rail’s inclusion of a vague “tenants charter” offering “open and honest engagement”, they will continue to be driven out and replaced by corporate firms who can pay higher rents.
Derec Hickman of Chu’s Garage in Helmsley Place told the Gazette: “They’re doing it to make money. They have no interest at all in industry or supporting industry. It doesn’t pay the highest rent, it pays the lowest rent.”
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Derec, who last month travelled around the country with wife Nhi Chu on a motorbike to speak to tenants, said a meeting was taking place with the Guardians this evening to discuss the news.
He believed the so called “tenants charter” would be ironed out over the next few months while the deal is finalised.
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But he said there is nothing to suggest it will focus on supporting a range of businesses.
“There’s no mention at all of industry in anything they have written,” he said. “There’s no mention of business mix. Industrial tenants will be squeezed out by high paying tenants.”
Mark Williams owns Wooden Horse furniture makers in Spurstowe Road, under the Hackney Downs arches, and agreed the news was worrying for businesses like his.
“It brings more uncertainty,” he said. “My main issue really has always been whether we are going to be ousted as industrial units for a retail type space.
“Our premises was previously occupied by furniture makers and there’s a long history of that industry in Hackney. My workers are all local and to move is an option but it’s not ideal for us.
“My fear was when it went into private hands they would mould the category uses accordingly to get higher rents. And that doesn’t help us.”
The Guardians had hoped to stop the sale and had meetings with transport minister Jo Johnson. One option being touted was for councils or local landlords to buy groups of arches, and Hackney mayor Phil Glanville had expressed interest in making an offer.
He told the Gazette he was “extremely disappointed” the sale had gone through as a job lot.
“It goes against what we and tenants and the Guardians have been saying,” he said. “Obviously there have been some positive statements made but what we are going to be asking the government is whether this tenants charter is contractual. Will it be a condition of the sale, as it should be?
“I will be writing to the new owners asking for a meeting. I don’t think we can stop the sale now. But they have spoken about offering support to tenants under pressure. I’m going to be asking the government to fund that out of the sale proceeds.
“Setting up a fund of £5million from £1.46bn to have independent advice and support could be really useful. The government should make good on their side of the equation.”
Mr Glanville added that a commitment to support existing tenants is not enough and wants the owners to go above and beyond what a good landlord would do.
A spokesperson for the Guardians said: “Throughout this process we have sought to ensure that small businesses are genuinely protected so that the arches can thrive.
“There is a long way to go in the sale process, but if Blackstone and Telereal successfully purchase the estate we trust they will follow up on their stated intention to put ‘tenants first’ in their management of the estate.
“A starting point would be to meet our demands for a full, transparent rent and lease audit, and to recognise Guardians of the Arches formally as a tenants’ association.
“We represent hundreds of businesses, and our number is growing every day. It is in the interests of all concerned that our proposals are taken on board.”
Graham Edwards, co-founder and chairman of Telereal, said: “The arches portfolio is a unique and vital part of the UK economy. We are tremendously excited by the prospect of working with its entrepreneurial tenant base – made up of car mechanics, bakeries, micro-breweries, restaurants, and just about every type of business you can think of. These tenants are a vibrant part of many local economies and communities.”
James Seppala, head of European real estate at Blackstone, added: “The portfolio is unique in its character and function, and we are excited by the tremendous opportunity for us to contribute to the continued revitalisation of the railway arches in the UK, always recognising the role that they play in stimulating economic activity, growth and prosperity, in particular amongst SMEs and local communities.”
The Gazette has been covering the Guardians of the Arches campaign since attending the meeting where the group was launched. For all our coverage on the campaign, click here.