US-based hotelier MCR has acquired the BT Tower in the UK鈥檚 capital for 拢275m (鈧�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鈥檚 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 拢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鈥檚 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.
鈥淲e will take our time to carefully develop proposals that respect the London landmark鈥檚 rich history and open the building for everyone to enjoy,鈥� said Tyler Morse, CEO and owner of MCR.
Thomas Heatherwick, founder and design director at Heatherwick Studio, said: 鈥淭his is an extraordinary building and an amazing opportunity to bring it back to life. We鈥檙e excited at the prospect of working with Fitzrovia鈥檚 residents and with many thousands of Londoners, to repurpose this important piece of the city鈥檚 living heritage.鈥�
Brent Mathews, property director at BT Group, said: 鈥淭he BT Tower sits at the heart of London and we鈥檝e been immensely proud to be the owners of this important landmark since 1984. It鈥檚 played a vital role in carrying the nation鈥檚 calls, messages and TV signals, but increasingly we鈥檙e delivering content and communication via other means.
鈥淭his deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come.鈥�
Naomi Nettleton, a real estate partner at law firm Charles Russell Speechlys, said: 鈥淩epurposing London鈥檚 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.
鈥淔or investors looking for income from assets, the residential rental market trends are currently focussing on purpose-built properties 鈥� 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.鈥�
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