News

Four in running for NTL contract

News

Julia Cahill

09 October 2004

Cable TV operator speeds up efforts to halve its 2.2m sq ft office portfolio and trim warehouses

NTL is retendering the management contract for its 2.2m sq ft leasehold portfolio and accelerating its five-year disposal strategy.

The cable TV operator, which is going through a major restructuring, has whittled down eight bids to a shortlist of four. They are incumbent Doherty Baines, CBRE, GVA Grimley and Lambert Smith Hampton.

NTL wants the successful bidder to increase the pace of disposals. The first phase is to consolidate its 13 call centres to just three, in Glasgow, Swansea and Manchester, which is due to be completed by the end of the year. This will enable NTL to cut its office portfolio from 2m sq ft to 1m sq ft over the next five years. It also plans to dispose of some of its 20 warehouses, which make up 5% of the portfolio.

Knight Frank, FPDSavills – which made an approach through its US ally Trammell Crow – and Gerald Eve failed to make the shortlist, as did a surprise bid from London & Regional. The Livingstone brothers’ property company had expressed an interest in the management role, with a view to working up a total property outsourcing for NTL.

NTL director of corporate real estate Liam Mullins said: “We were very keen to consider what London & Regional had to say, because the other bidders were traditional advisers and consultants.”

But he added: “We’re not considering a total property outsourcing at the moment because our portfolio is 90% leasehold, and most corporate outsourcing deals have been asset-backed transactions.”

Mullins decided to go back to the market when Doherty Baines’ three-year contract came up for renewal earlier this year. The new contract will be formally awarded on 1 January.

Cable company swings cost-cutting axe

The rash of property disposals is just one way in which NTL is hoping to shift its £3bn debt.

Last month, the UK’s biggest cable company instructed Goldman Sachs to sell its television tranmission towers in a bid to trim £1.7bn from its debt bill. The towers account for around 12%, or £63.5m of the company’s £397m annual revenue.

Potential buyers include private equity groups Apax, Blackstone, Cinven and Guy Hands’ Terra Firma.

NTL previously attempted to sell the towers portfolio in December 2001, but its debt restructuring knocked the value down to below £1bn. The NASDAQ-listed company came out of Chapter 11 in January 2003, and its performance has stabilised.

Cable TV operator speeds up efforts to halve its 2.2m sq ft office portfolio and trim warehouses NTL is retendering the management contract for its 2.2m sq ft leasehold portfolio and accelerating its five-year disposal strategy. The cable TV operator, which is going through a major restructuring, has whittled down eight bids to a shortlist of four. They are incumbent Doherty Baines, CBRE, GVA Grimley and Lambert Smith Hampton. NTL wants the successful bidder to increase the pace of disposals. The first phase is to consolidate its 13 call centres to just three, in Glasgow, Swansea and Manchester, which is due to be completed by the end of the year. This will enable NTL to cut its office portfolio from 2m sq ft to 1m sq ft over the next five years. It also plans to dispose of some of its 20 warehouses, which make up 5% of the portfolio. Knight Frank, FPDSavills – which made an approach through its US ally Trammell Crow – and Gerald Eve failed to make the shortlist, as did a surprise bid from London & Regional. The Livingstone brothers’ property company had expressed an interest in the management role, with a view to working up a total property outsourcing for NTL. NTL director of corporate real estate Liam Mullins said: “We were very keen to consider what London & Regional had to say, because the other bidders were traditional advisers and consultants.” But he added: “We’re not considering a total property outsourcing at the moment because our portfolio is 90% leasehold, and most corporate outsourcing deals have been asset-backed transactions.” Mullins decided to go back to the market when Doherty Baines’ three-year contract came up for renewal earlier this year. The new contract will be formally awarded on 1 January. Cable company swings cost-cutting axe The rash of property disposals is just one way in which NTL is hoping to shift its £3bn debt. Last month, the UK’s biggest cable company instructed Goldman Sachs to sell its television tranmission towers in a bid to trim £1.7bn from its debt bill. The towers account for around 12%, or £63.5m of the company’s £397m annual revenue. Potential buyers include private equity groups Apax, Blackstone, Cinven and Guy Hands’ Terra Firma. NTL previously attempted to sell the towers portfolio in December 2001, but its debt restructuring knocked the value down to below £1bn. The NASDAQ-listed company came out of Chapter 11 in January 2003, and its performance has stabilised.