Proceeds from the £1.46bn transaction will help fund the railway upgrade plan and see Telereal and Blackstone hold equal ownership stakes, with both intending to be long-term owners of the estate.

The pair have adopted a ‘tenants first’ approach, which offers a commitment to engage with all tenants and communities in an open and honest manner.

The Network Rail portfolio is made up of around 5,200 properties, the majority of which are converted railway arches.

The sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway.

“This deal is great news – for tenants it will mean significant commitment and investment, and for passengers and taxpayers it will mean massive, essential improvements without an extra burden on the public purse,” said Peter Hendy, chair at Network Rail.

David Biggs, managing director at Network Rail Property, said it was confident that the businesses and communities it had fostered would continue to thrive under the new owners.

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“Ultimately our role is to run, improve and grow the railway, and managing these properties isn’t essential to that. 

“The new owners will invest in and grow the estate, and we can focus on our core business of running the railway.”

Graham Edwards, co-founder and chairman at Telereal, said it was excited by the prospect of working with its entrepreneurial tenant base.

“As a longstanding real estate investor in the United Kingdom, we and our partner Blackstone believe that our ownership of the portfolio will provide the supportive environment in which these businesses can flourish on a long-term basis. 

“For example, our business plan anticipates investing in several hundred currently disused arches so that they can provide space for more local businesses.

“With our permanent capital structures, we will be investing in the portfolio for many years.”

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 among SMEs and local communities.”