BT divests property portfolio

British Telecommunications PLC
13 June 2001

                                June 13, 2001

                       BT DIVESTS UK PROPERTY PORTFOLIO

                               FOR £2.3 BILLION

BT today announced that it has entered into a legal agreement for the sale of
its UK property portfolio to Telereal Holdings Limited ('Telereal') for
approximately £2.3 billion.

Closing the transaction, the largest of its type in the UK, is conditional
principally on Telereal completing its funding arrangements. Telereal Ltd., a
50:50 joint venture owned by Land Securities Trillium and The William Pears
Group, was selected by BT as the preferred bidder for the property contract on
April 10, 2001.

Sir Christopher Bland, Chairman of BT, said: 'This represents a further step
forward in BT's drive for cash and the reduction of its headline debt, while
at the same time outsourcing a non-core competency.'

Sir Peter Bonfield, CEO of BT, said: 'This is a very good deal which is the
culmination of many months of very complex work.'



Geoff Almeida, Chief Executive of BT Business Services, said: 'BT has
significantly beaten expectations in this transaction.''

Telereal, which will raise finance on the bond markets to complete the
transaction, will supply property management services to BT on an ongoing
basis so enabling BT's management to focus on the core communications
business.

The alliance with Telereal will provide BT with improved flexibility in its
approach to office arrangements and building requirements including the
ability to vacate up to ten million square feet of property within the first
ten years.

NOTES TO EDITORS

BT announced on January 4, 2001 that it was in negotiations aimed at realising
the value of its property portfolio. On April 10, BT announced that it had
chosen Land Securities Trillium and William Pears Group ('Trillium') as its
preferred bidder.

The transaction is principally conditional on the funding of Telereal and the
finalisation of the terms of the transaction documentation.

BT Business Services is responsible for BT's property estate, which has a
total floor space of six million square metres. Seventy per cent of the 7,500
properties are operational buildings for which BT will retain the freehold and
exclusive control.

The divestment of the property estate will enable a more flexible approach to
BT's office arrangements and building requirements.

Telereal Ltd is a 50:50 joint venture owned by Land Securities Trillium and
William Pears Group which is dedicated to the management of the BT property
portfolio.

Land Securities is one of Britain's leading real estate providers with assets
of £8.3 billion. The company's portfolio includes a balanced mix of offices,
shops, shopping centres, retail warehouses, leisure and industrial properties.

Land Securities Trillium ('LST') was established in 1997 and acquired by Land
Securities PLC in November 2000. It combines capital, estate and facilities
management expertise in a total outsourcing package. In 1998, LST won the
PRIME contract to own and manage the majority of the Department of Social
Security's property portfolio. In March 2001, LST was selected by the BBC as
the preferred bidder for its property portfolio. LST is also one of two
short-listed bidders for the London Underground Property Partnership.

The William Pears Group is one of the largest private companies in the UK. It
holds substantial property interests and is involved in a large number of
joint ventures.

Schroder Salomon Smith Barney acted as sole financial adviser to BT on the
transaction.

Ashurst Morris Crisp acted as the legal advisors on this transaction.

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