Cable & Wireless is reviving plans to outsource its 2.3m sq ft UK & Ireland property estate.
The UK’s biggest alternative telecoms carrier wants to sell and lease back 23 freeholds and long leaseholds worth £50m, with former MEPC directors Jamie Dundas’s and Robert Ware’s new company among five parties invited to bid.
Their Oxiana is up against outsourcing specialists Land Securities Trillium and Mapeley, as well as the Livingstone brothers’ London & Regional Properties, and a surprise bid from Arlington – aiming to make its first major move in the outsourcing market.
Under the 15-year contract, C&W also plans to transfer its liabilities for around 157 short leasehold properties, 50% of which are surplus, to its chosen partner.
It pays £30m pa in rent.
The portfolio of offices, data centres and light industrial properties, but not phone masts, includes:
- l 13 occupied office/industrial properties
- l 71 occupied mixed office and technical properties connected to C&W’s network
- l 43 unoccupied, mainly light industrial properties, supporting the C&W network
- l 53 wholly sublet or vacant properties
One source close to the deal described it as a “carbon copy” of the larger Abbey National outsourcing as it will not involve facilities management.
The move is part of the company’s plans to restructure amid tough trading conditions. Earlier this month C&W announced a worse than expected 18% slump in first-quarter revenues and flat sales in its core UK market.
Its turnover for the three months to 30 June fell to £798m, against £974m in the same period last year, while UK revenue came in at £406m, down from £423 last quarter.
Bids are due in late August and must feature specific proposals for C&W’s London estate, which includes its leasehold headquarters at 124 Theobalds Road, WC1.
The telecoms giant looked at plans to outsource its non-operational property across Europe four years ago, when it appointed GVA Grimley to manage its portfolio in the UK and Ireland.
References: EGi News 02/08/04
