Re Contract

BT Group PLC
26 November 2001


                                                             November 26, 2001



   BT EXCHANGES CONTRACTS WITH TELEREAL FOR TRANSFER OF PROPERTY PORTFOLIO

BT today announced that it has exchanged contracts with Telereal, a 50:50
joint venture partnership between Land Securities Trillium and The Pears
Group, for the sale of the majority of its UK property portfolio for £2.38
billion.

Completion is scheduled for December 14, 2001 or earlier. Around 6,700
properties will be transferred comprising offices, telephone exchanges,
vehicle depots, warehouses, call centres and computer centres totalling some
5.5 million square metres. The transaction also includes the transfer of
approximately 350 employees from BT Affinitis to Land Securities Trillium
(Telecom) during the first quarter of 2002.

Under the terms of the agreement, Telereal will be responsible for providing
accommodation and estates management services to BT. In return, BT will pay
Telereal a total accommodation charge of approximately £6 per square foot
including £190 million (which increases at three per cent per annum) for use
of the freeholds.

BT will have the flexibility to vacate approximately 35 per cent of the estate
over the contract term at no extra cost.

Sir Christopher Bland, Chairman of BT Group, said: 'This transaction is
another important step in our restructuring and debt reduction programme.'

NOTES TO EDITORS

The sale contract is subject to subject to Material Adverse Change provisions
that are not unusual in a transaction of this type.

About BT

BT announced on January 4, 2001 that it was in negotiations to realise the
value of its property portfolio. On April 10, BT announced that it had chosen
Telereal, a 50:50 joint venture owned by Land Securities Trillium and The
Pears Group, as its preferred bidder. On June 12, BT announced that it had
entered into a legal agreement for the sale of its UK property portfolio to
Telereal Holdings Limited, the transaction then principally conditional on the
funding of Telereal and the finalisation of the terms of the transaction
documentation.

BT Affinitis is responsible for BT's property estate and has led the
transaction for BT. BT retains exclusive control of the operational properties
and the freehold on these properties reverts to BT in 30 years.

BT Affinitis is separately exploring the options in pursuing a growth strategy
for its fleet business, BT Fleet Partners, and is also actively involved in
the proposed outsourcing of BT's financial operations to Xansa.

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

About Telereal

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

Land Securities is one of Britain's leading commercial property and property
services groups with fixed assets of £8 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 2001, LST entered into a 30 year contract
with the BBC for the outsourcing of the BBC's London and Scottish Estates.

The 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.



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