The socio-economic impact of businesses in the railway arches
2.
Introduction
2.1
As The Arch Company turns five years old in 2024, this report reflects on the scale of the impact delivered by the businesses in the railway arches. It also demonstrates the role that The Arch Company portfolio can play in delivering further socio-economic impact in the future. Key impacts for The Arch Company are presented for the overall portfolio and for six case study local authorities including Southwark, Lambeth, Tower Hamlets, Wandsworth, Manchester and Hackney. This report uses internal data provided by The Arch Company to estimate the socio-economic impact of businesses in the railway arches. 2 This data is composed of a snapshot of their internal portfolio data, as well as a variety of other internal data sources provided by The Arch Company. Volterra has built on this data to provide estimates of key metrics, such as the number and type of businesses, and the economic impacts of the portfolio. The methodology of estimation is based on a combination of existing research, expertise from Volterra, and the application of industry standards.
2.2
Overview of The Arch Company’s portfolio
The Arch Company is the largest landlord to small businesses in the UK. 3 Their 5,300 properties, acquired from Network Rail in 2019, consist of railway arches, and other properties deemed non-essential to the running of the railway system. 4 Around 70% of these properties are railway arches with the remainder comprising a mixture of former railway buildings and parcels of land. The Arch Company manages these properties, maintaining and leasing them out to a range of customers, most of which are small businesses. Of the 5,300 properties in the portfolio, 3,600 are rented by approximately 3,200 individuals and organisations, with some customers renting multiple spaces. 5 Figure 2.1 breaks down the geographical composition of the portfolio, showing the share of properties, referred to as ‘Rental Spaces’, and overall value in The Arch Company portfolio by region. As shown, 82% of the ‘Estimated Rental Value’ (ERV) of the portfolio is based in London .
2.3
2.4
Figure 2.1 – The majority of the portfolio is based in London
Share of portfolio properties and valuation by region.
Source: The Arch Company internal data, 2023
2 This data is valid as of August 2023
3 National Audit Office, 2019. Network Rail’s Sale of Railway Arches.
4 Since 2019, The Arch Company has split some rental spaces into multiple rental spaces to better reflect the nature of the space. For example, Network Rail may previously have had an intermediary landlord in place and therefore counted this as one single rental space. In practice, this may have comprised of multiple spaces with multiple subtenants. This is why the rental space figure has increased from 5,200 in 2019 to 5,300 today.
5 Note: The disparity between the number of properties and customers is due to the fact that some customers rent multiple properties.
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