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Blackstone is closing in on a deal to take full control of a £2bn portfolio of more than 5,000 railway arches in the UK, buying out its partner five years after a deal that symbolized the advance of US private equity into the UK economy.
The US private equity group, which is the world’s biggest investor in commercial property, has agreed to buy half of the TT Group portfolio, which the two investors acquired from Network Rail for £1.5bn in 2019, according to people familiar with the matter. with a question.
The transaction would involve Blackstone buying TT’s stake in Arch, which owns the portfolio. The deal, first reported by Green Street News, has yet to be finalized.
The brick arches under the railway lines are an iconic part of Britain’s streets and are home to a range of small businesses, from microbreweries to auto repair and hairdressers.
The sale of the huge Network Rail portfolio has become emblematic of the growing role of private equity in Britain’s domestic economy, making Blackstone and TT lessors of thousands of small businesses.
The deal brought more investment in the ports, but also raised concerns about more aggressive management and rent increases.
Some small businesses have faced steep rent increasing as they dealt with the difficulties of the Coid-19 pandemic.
The Arch company at the time offered some occupiers holiday rentals and set up a hardship fund to help fight the company. He also negotiated a “Tenants’ Charter” with the Arches Tenants’ Guardian Association.
The new owners have also invested heavily in the portfolio. Around 1,400 arches were abandoned when Network Rail agreed the sale and are now being brought back into use.
TT Group, owned by the Pears family and formerly known as Telereal Trillium, is one of the UK’s largest private equity investors, with a portfolio worth more than £9bn.
The group wants to free up capital for new investments, while Blackstone would prefer to have full control of the portfolio, said one of the people familiar with the matter.
Blackstone and TT declined to comment.
