Network Rail is making progress on a merger with a government placemaking firm that would enhance opportunities to develop properties on its estate.
Recently released Network Rail board minutes from May 2024 have a section titled ‘DevCo’, the proposed name of its new development company, note that “progress had been made on the merger of LCR and Network Rail Property”.
It adds: “HMT [His Majesty’s Treasury] had provided their approval in principle subject to final business case.”
LCR (London & Continental Railways) describes itself as the “UK government’s placemaking expert” and says it is a “skilled commercial developer and sustainable regeneration expert [with] a 25-year track record of creating exciting new destinations for people to live, work and experience”.
LCR says it has been working with Network Rail “for over 10 years to unlock development opportunities at key sites across the UK”.
It continues: “In 2018, we entered into a formal Collaboration Agreement to create maximum value from Network Rail’s portfolio of 2,500 UK railway stations and surrounding land, with a primary focus on the 1,900 stations within England.
“Our purpose is to free up land for residential development, and realise the full potential of the UK’s railway assets and enhance passenger experience through connectivity and integration.”
Network Rail board minutes from February 2023, when the proposal to merge the two companies was first raised, state: “A key factor in the success of DevCo, and its ability to deliver value would be to develop a single, nationwide agenda. That overarching agenda would facilitate the Regions being empowered to deliver individual projects.”
Responding to a request for more details, a Network Rail spokesperson said: “Having worked with LCR over several years we understand the power of working together to regenerate our towns and cities.
“We are always looking at ways to evolve this relationship and are looking at how a combined property company could work.”
The DevCo could help bolster the rail infrastructure company’s finances, which are in a sorry state following the last financial year.
History of Network Rail Development Company
There is a limited company listed on Companies House called Network Rail Development Limited which was incorporated on 17 April 2008. Alongside the list of three named people who are active directors of the company, one of the officers is NR Corporate Secretary Limited.
In the business review section of its Directors’ report filed as part of its full accounts listed on companies house, Network Rail Development said it is “financed by a £34.1M (2022: £37.7M) interest free loan from its parent; Network Rail Infrastructure Limited (NRIL), which performs as an equity function.
“When the joint venture partners dispose of their developments and make a return to NRD then the respective portion of the loan is repaid to NRIL.”
Under a section titled ‘Principal activities’, it says: “The principal activity of the company is to be a limited partner” in a series of “joint venture partnerships” and goes on to list Innova Investment Limited Partnership, along with 12 iterations of ‘Solum Regeneration LLP’ with placenames in brackets between Regeneration and LLP.
The placenames are Epsom, Haywards, Guildford, Twickenham, Bishops, Surbiton, Maidstone, Walthamstow, Redhill and Kingswood. It also lists ‘Holding 1’ and ‘Holding 2’ as LLPs.
The section goes on to say: “Since May 2023 Innova Investments Limited Partnership is a joint venture with RMS (England) 2 Limited (previous joint venture partner was Innova Investment Holdings Limited).
“All other joint ventures are with Kier (NR) Limited. The objective of these joint ventures is to prepare sites for development and secure the necessary planning and railway consent and where appropriate, undertake all necessary developments.”
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