Goldman and Wellcome Trust team up for £1.2bn Network Rail bid

Goldman Sachs (NYSE: GS-PB - news) has joined forces with Britain's biggest medical research charity to table a £1.2bn bid for a vast commercial property estate owned by Network Rail.

Sky News has learnt that Goldman and Wellcome Trust have lodged a joint offer for the portfolio of about 5,500 premises, which have been put up for sale to raise funds for rail infrastructure investment.

The combined bid brings together the apparently unlikely pairing of the world's best-known investment bank and a leading light in the world of scientific endeavour.

Goldman and Wellcome have, however, invested together on previous occasions, notably when they merged their respective student accommodation companies into a single enterprise, Vero Group, in 2016.

Responding to an enquiry from Sky News, a Wellcome Trust spokeswoman said: "Wellcome Trust and Goldman Sachs have submitted a non-binding indicative offer for the commercial estate of Network Rail."

The duo are among a number of bidders for the Network Rail assets expected to make it into the second round of the auction.

Network Rail's Commercial Estates arm has generated huge interest among private investors because of the hundreds of millions of pounds in rent it generates each year.

Many of the sites being earmarked for sale are railway arches which contain small business premises, although rail stations themselves are not included in the auction.

Dozens of bidders are understood to have submitted initial offers, including big players in the property world such as Telereal Trillium, which is owned by the billionaire Pears family.

Terra Firma Capital Partners, the private equity firm headed by Guy Hands, has also made an offer, adding another prominent financier into an already hotly contested process.

Mr Hands' interest in the Network Rail assets comes as he seeks to raise his first general buyout fund since he lost control of EMI, the music company, in 2011.

Speaking last November, Mark Carne, the outgoing chief executive of Network Rail, said auctioning the property assets on a leasehold basis would benefit local communities.

"I hope to see areas around the railway positively transformed with new and refurbished shops, amenities and extra facilities for local people and passengers," said Mr Carne.

"The sale will bring a major cash boost to help fund key projects across England and Wales as part of the Railway Upgrade Plan."