Orion Capital Managers has been selected as the new preferred bidder to acquire BT’s headquarters in the City of London for more than £200m.
The private equity firm is understood to have beaten off rival bidders believed to include Canary Wharf Group, Henderson Park with CO-RE, Hong Kong firm K&K and Tishman Speyer.
Orion is currently investing on behalf of its fifth European real estate fund, which is targeting €1.5bn of equity commitments, according to its website. Last month the firm, alongside Ediston Real Estate, placed RBS’ former offices and data centre at Dundas Street in Edinburgh under offer for around £35m. The firm, which was launched in 1999 by founding partners Aref Lahham, Van Stults, and Bruce Bossom, has also built up a 9.2% stake in troubled shopping centre owner intu.
BT was forced to start another bidding process for the site at 81 Newgate Street earlier this month after its sale to Great Portland Estates for circa £210m collapsed.
GPE went under offer on the property in March, after a lengthy process which followed BT’s decision last summer to appoint Cushman & Wakefield to sell its current 300,000 sq ft home near to St Paul’s and find it new space to lease in a more modern building.
However, it is understood due diligence issues came up around refurbishing the property which scuppered the deal.
BT subsequently asked the underbidders from the previous sale process to bid again.
Known as the BT Centre, the property sits on a 1.5-acre freehold island next to St Paul’s Cathedral. It was built specifically for the company in 1985.
The company has already found a location to relocate to in London, having placed all the 328,064 sq ft office space available at Aldgate Developments’ One Braham in Whitechapel, E1, under offer.
The telecoms giant is to take the space on a 15-year lease, paying between £55 and £60 per sq ft.
One Braham is a £230m, 18-storey commercial building being built above Aldgate East Tube station.
The business had also shortlisted several other potential options including Canary Wharf Group’s Wood Wharf development; the International Quarter London in Stratford (a 50/50 joint venture between Lendlease and London & Continental Railways), and YardNine’s 80 Fenchurch Street, EC3.
Cost-cutting drive
BT decided to sell its home last year after revealing plans to cut 13,000 jobs over the next three years and reduce its costs by £1.5bn, and in the wake of the decision by its then chief executive, Gavin Patterson, to step down.
Patterson was replaced in February by Philip Jansen, the former co-chief executive of global payments services group Worldpay.
Last week, the telecoms giant also unveiled plans to shrink its office portfolio by 90% as part of its “Better Workplace programme”.
JLL has been hired to advise on the consolidation, tasked with refurbishing BT’s existing offices and acquiring new ones to whittle down the company’s portfolio from more than 300 offices to just 30 hubs.
BT and Orion Capital Partners declined to comment.
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