BT launches 200,000 sq ft London and Manchester office hunts

By James Buckley - Thursday, August 09, 2018 15:25

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UK telecoms giant BT is set to launch office requirements totalling 200,000 sq ft in London and Manchester, as it begins its search for a new HQ in the capital and a regional office in the north-west, CoStar News can reveal.

BT has instructed Cushman & Wakefield to look for a new headquarters building in London of around 150,000 sq ft, having signaled its intention in May to relocate from its head office in St Paul’s, where it has been based since 1874.

Separately, BT is understood to have instructed JLL to begin looking for a regional office of around 50,000 sq ft in Manchester as the company continues to scrutinise its property portfolio in the UK.

Last month, BT confirmed it had mandated Cushman & Wakefield to handle the sale of its City of London headquarters, seeking up to £200m for the asset. The building is expected to appeal to a diverse investor base as the sale represents a rare opportunity to take ownership of a large asset with a major value-add play.

BT said in May it would remain headquartered in London, as part of the dramatic ongoing rationalisation of its estate across the UK. The rationalisation will see some new offices opened and will not affect the BT Tower.

BT occupies the 10-storey BT Centre at 81 Newgate Street in St Paul’s. The property was constructed in 1985 and comprises 273,000 sq ft of offices. 

BT has been pursuing a massive reduction in its giant property portfolio since the former nationalised telecoms giant was opened up to competition. It has traditionally worked with Telereal Trillium on the plans.

A BT spokesperson said: “BT has appointed global property consultants, Cushman & Wakefield, to advise on potential sale options of  its Central London headquarters. The move follows BT’s announcement in May that it plans to move from its historic 81 Newgate Street global headquarters to a smaller, modern London office to create a more collaborative, open and customer focused working culture.

"BT Centre, which sits on a freehold island site of circa 1.5 acres in the centre of the City of London, is next to St Paul’s Cathedral and totals approximately 300,000 square feet. It was constructed by BT in 1985 for its own occupation.”

In 2001, BT offloaded the majority of its property portfolio, including offices, exchanges and call centres, to Telereal in a sale and leaseback deal for around £2.4bn. BT's UK property services were outsourced to Telereal before it bought Trillium in 2009 in a £750m deal from Land Securities.

In 2009, BT outlined an ambitious five-year target to save £65m a year under its P28 project, which would see it downsizing its vast property portfolio vacating 28 offices over the period. By the end of 2014, BT planned to shed more than 1m sq ft of office space and trim the £850m a year it spent on its UK portfolio.

In 2011, BT reduced is worldwide costs associated with property rationalisation to £88m, down from £121m the previous year, and slimmed the value of its property, plant and equipment to £14.62bn from £14.85bn in 2010.

In 2013 Colliers International won a global pitch to advise BT across its entire global estate outside the UK and Ireland.

At the onset of the tender process, BT, together with its UK estate, was thought to occupy around 100m sq ft across circa 8,000 properties globally.

jbuckley@costar.co.uk

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