The short answer is no, but it’s not easy aligning the priorities of rail infrastructure with property developers…

Joseph Infante

New trends to create developments around transport hubs, known as Transport Orientated Developments, have led to new and innovative opportunities which previously would have been missed. But, this is not without its challenges and savvy developers need to ensure their supply chains are up to the task.

These trends are generally driven by factors such as land availability, global warming, traffic, pollution and air quality – and at the core of these, accessibility to public transport. There is a growing demand to design developments that address how we move in and around cities to create communities within our cities that are sustainable and environmentally friendly.

Many rail infrastructure asset owners like Transport for London (TfL) and Network Rail have sought to realise better value from their real estate by attracting developers keen to build out schemes on or near to their assets – but developers face unfamiliar risks when working at the rail interface. 

So, why is it so difficult to deliver next to a railway?

To put it as simply as possible, the priorities of rail infrastructure owners and property developers do not generally align. Developers want value for money, a quick build and a reliable supply chain that understands its commercial incentives – combined with a sprinkle of innovation and creativity thrown in to maximise the commercial gain. Railway infrastructure owners are charged with providing a safe, reliable and disruption free railway corridor for train and freight operating companies to use, under the watchful eye of the regulator.

However, there are shared priorities and similarities between infrastructure operators and developers which, when leveraged, open up space for good, solid partnership working.

These asset managers and owners are sometimes initially unwilling to properly commit to project development programmes, constraints and budgets

Both entities work to strict timescales. Rail infrastructure owners and their asset managers use windows of time within service patterns, known as “a possession” to deliver their works. These asset managers and owners are sometimes initially unwilling to properly commit to project development programmes, constraints and budgets. With the right kind of partnership working, planning and foresight, smart and organised developers can take advantage of service patterns and be assured that key milestones are met and budgets are delivered.

Both kinds of organisation operate from funding provided by external sources. As such, both represent vehicles charged with delivering greater value. Conceiving well planned schemes with integrated rail and development cost plans makes it possible for projects to identify and isolate key areas of risk, where targeted allowances can be made for implementing effective mitigations. When this is achieved with the right combination of rail and commercial development expertise, the results can offer an attractive opportunity for investing in the upgrade of railway assets in return for developers maximising their real-estate potential.

Both entities also have to deliver an undertaking that schemes will meet assured technical requirements. Developers often require warrantees that tell investors and leaseholders, that due skill and care have been used in conceiving the scheme. Through their technical standards, rail infrastructure owners/operators such as Network Rail and TfL make it mandatory for schemes to comply with its regulated requirements at all stages. Developers who can pass these strict railway tests of compliance, will be able to use this to demonstrate to their funders and their underwriters how delivery and operational risks are minimised.

To make these complex interlinking priorities work all the way through planning, design, construction and into operation is a huge challenge. To do so, it is important to find the right people who understand this complex environment, who have a detailed understanding of the rail regulations and who also have a comprehensive knowledge of property development.

Unlocking the potential

Armed with the tools and understanding described above one can step back from the detail and appreciate the opportunities that Transport Orientated Developments can open up on a macro scale. New opportunities will exist for developers and rail infrastructure asset owners and operators to work in partnership to plan and develop schemes around transport hubs, offering a “focal point” for urban growth connected by a framework of multi-modal transport links.

However, in order to effectively unlock all of this opportunity it is important that the development industry recognises the complex challenges of delivering at the rail interface. As a sector, we need to ensure that we are able to meet these challenges, which will require investment in the expertise and time needed to assure transport operators that we can deliver attractive, viable mixed-use development on land that has long been considered “too difficult” to properly develop.

Joseph Infante, director at Capita Property and Infrastructure