BT sale may bring Canary Wharf rival

TELECOMS group BT IS planning to sell a Thames-side building that could unlock a million-square-foot development site and provide a rival to Canary Wharf close to the City's heart.

A handful of developers will be approached to buy Mondial House in Upper Thames Street, BT's largest building at 500,000 square feet. The two-acre site where the former British Telecom introduced the first digital switchboard, houses an international exchange now surplus to requirements.

According to Estates Gazette, gaining permission for offices is estimated to take up to five years. However, the site once had permission for about 600,000 square feet of offices and the Corporation of London is keen to see it redeveloped.

Sources said BT would be looking for an initial down payment of about £20m for a 50/50 position while planning permission is worked up, but that the end deal, for full ownership, would be worth closer to £50m for BT.

Developers British Land, headed by John Ritblat, Hines, Land Securities, Tishman Speyer Properties and Stanhope are all expected to express an interest.

The site is between Cannon Street Station and the 150,000 square-foot Riverbank House in Swan Lane, which the Corporation bought from Prudential in 1999.

It is working up plans for a 500,000- square-foot scheme, but City experts believe that, by marrying the two sites, a giant office scheme could offer floorplates of more than 50,000 square feet each and that the Corporation is likely to be approached by BT to consider taking full control of the two sites.

One source said: 'That would provide veritable competition to Canary Wharf. The Corporation has been keen to increase the number of developments that can offer the right type of space for financial occupiers in the City, so that they do not all end up in Docklands.'

Mondial House, completed in 1980 with concrete and white plastic cladding, was once compared by Prince Charles to a personal computer.

It was one of a handful of assets not included in BT's £2bn property sell-off in 2001 to Telereal, a joint venture between Land Securities Trillium and the William Pears Group. BT also kept the Telecom Tower in the West End and Goonhilly satellite station in Cornwall.

CB Richard Ellis is advising BT but refused to comment.