US-based hotelier MCR has acquired the BT Tower in the UK’s capital for £275m (€321m), aiming to repurpose the grade II-listed communications tower into a hotel.
BT Group said the sale of the asset located in Fitzrovia in London forms part of the telecommunications firm’s plans to simplify its operations and lower costs across the company, including reducing the number of offices in its estate from more than 300 to around 30.
The company sold its former headquarters, BT Centre, in July 2019 for £210m.
The BT Tower which was completed in 1964, overtook the Millbank Tower to become the tallest structure in London until 1980, when it was surpassed by the NatWest Tower.
BT Group’s move from the premises will take several years due to the intricate technical equipment involved.
MCR said it will partner with London-based Heatherwick Studio to repurpose the tower as a hotel and opened up to the public.
“We will take our time to carefully develop proposals that respect the London landmark’s rich history and open the building for everyone to enjoy,” said Tyler Morse, CEO and owner of MCR.
Thomas Heatherwick, founder and design director at Heatherwick Studio, said: “This is an extraordinary building and an amazing opportunity to bring it back to life. We’re excited at the prospect of working with Fitzrovia’s residents and with many thousands of Londoners, to repurpose this important piece of the city’s living heritage.”
Brent Mathews, property director at BT Group, said: “The BT Tower sits at the heart of London and we’ve been immensely proud to be the owners of this important landmark since 1984. It’s played a vital role in carrying the nation’s calls, messages and TV signals, but increasingly we’re delivering content and communication via other means.
“This deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come.”
Naomi Nettleton, a real estate partner at law firm Charles Russell Speechlys, said: “Repurposing London’s iconic buildings as hotels is without doubt a growing trend. The recent opening of the Old War Office is but one other example. At our firm we have seen a marked increase in hotels-related work, which is being primarily driven by the rise in the idea of the hotel as a trophy asset for private capital as well as the opportunities afforded to private capital investors by high-interest rates and the ability for private capital funds to be patient with historic buildings where timelines for development are notoriously unpredictable.
“For investors looking for income from assets, the residential rental market trends are currently focussing on purpose-built properties – build-to-rent communities with spaces designed for modern living. This makes retrofitting a building like the BT tower more challenging. Interest rates remain high for institutional investments and iconic, historic buildings may require longer-term outlook and commitments than some property funds can offer. This creates opportunities for other uses, like hotels.”
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