News on 04 January 2001
BT announced today that it is in negotiations to realise
the value of its UK property portfolio in what would be the biggest property
transaction of its kind seen in the UK to date. A spokesperson declined
to name possible buyers but said the company was talking to more than
one organisation.
The telecommunications company says that divestment of its property estate
will enable it to take a more flexible approach to its office arrangements
and building requirements. Perhaps more pressing is the need to improve
its share price and BT hopes to raise £2bn in cash from the sale
of leaseholds.
BT's estate comprises 7,500 properties, with a total floor space of 6m
sq m (64m sq ft). Of these 70% are operational buildings where BT will
retain the freehold and exclusive control. The remaining 30% are specialist
buildings and sites which are outside the proposed sale.
Geoffrey Almeida, chief executive of BT Business Services, said: "This
approach realises the value of these assets and increases shareholder
value by enabling BT to focus on its core business rather than acting
as owners and managers of an extensive property estate. This action is
part of BT's already announced strategic review focused on increasing
shareholder value via operational and financial flexibility and management
focus."
It remains to be seen how this announcement will affect the facilities
management outsourcing contract awarded to the Carillion led Monteray
consortium (see News story) worth an
estimated £500 million over five years. BT confirmed that management
arrangements would be discussed with Monteray should service provision
form part of the deal.
