As UK telco BT looks to close its copper network, it is set to exit thousands of telephone exchanges (aka Central Offices) as it consolidates its footprint down from some 5,600 network buildings to around 1,000 over the next decade.

Aside from the cost and effort needed to maintain an aging legacy network that most customers don’t want to use, BT is keen to exit the sites in a timely manner before its landlord raises the rent.

The long lease game

BT sold its telephone exchanges and other real estate in 2001 for £2.3bn (around £4.45 billion/$5.27bn today, adjusting for inflation) to Telereal, a joint venture by Land Securities Trillium and William Pears Group for the deal.

The deal didn’t include the BT Tower or BT Centre, its then London HQ, but totaled more than 6,000 properties overall across the UK. Openreach’s former HQ on Judd Street in London (also a telephone exchange) and its Adastral Park complex outside Ipswich were also not part of the deal.

BT’s then-chairman, Sir Christopher Bland, said at the time that the 30-year sale-leaseback deal, running to 2031, represented 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.”

BT’s debts at the time totaled some £30 billion, swelled by the build of its nascent 3G network. Sir Peter Bonfield, then CEO of BT, called it “a very good deal.”

Reports at the time suggested BT was set to pay £355m a year in rent, with 3 percent increases per annum on the properties. By comparison, a report from financial firm Alan Boswell Group suggests average rent for industrial floorspace in London increased by a third just between 2014 and 2024, and around 20 percent outside London.

The telco also had the option to vacate up to 10 million sq ft of property within the first ten years of the deal, and has consolidated a large number of its office properties over the years and exited a small number of exchanges in the interim 24 years.

The original Trillium was formed in 1997 to acquire a 1.5 million sqm (16 million sq ft) property portfolio from the UK government’s Department for Work and Pensions. Acquired by Land Securities in 2000, the company was renamed Land Securities Trillium. Pears later acquired the Telereal joint venture, which then acquired Trillium from Land Securities, forming Telereal Trillium (now branded as TT Group).

According to a report in the Association of Corporate Treasurers from the time, some 40 bidders were interested in the BT portfolio, but only Telereal and now-defunct Mapeley made it through to the final stage.

Fast forward to 2025, and the long-term lease agreements signed in 2001 are coming close to renewal.

After 2031, BT faces a stark choice; be fully exited from a facility, or else either lease the property again for a minimum ten years (until 2041) at today’s market value or buy the property back (again at 2025 valuations). That compulsion applies to any of those thousands of exchanges from which BT is not fully exited.

BT and Openreach aim to shut some 4,600 exchanges, retaining just 1,000 fiber sites. After first announcing plans in 2020, the first of three trial sites has closed, with the other two due to follow soon. Around 105 are due to close between 2028 and 2031, with the rest closing over the course of the early 2030s.

Flats, hotels, more flats

Many of BT/Openreach’s telephone exchanges are located in inner-city metropolitan areas, and many of the 105 set to close by 2031 are in prime central London locations. While it’s not uncommon for companies to convert these types of facilities into colocation or Edge data centers, their location makes them very valuable for other uses. And history suggests many will be converted to residential or hotel use.

Telereal Trillium hasn’t said what it aims to do with the thousands of exchange buildings BT and Openreach will be exiting – the company didn’t reply to DCD’s request for comment. But the real estate firm has sold or redeveloped several exited BT sites over the years, with most being turned into residential properties.

TT previously sold a former BT call center in Lancashire to CBRE, as well as former BT offices in Southampton and Swindon to an investment consortium and a property development firm, respectively. The company previously gained permission to turn a former BT depot in London’s Catford into a new industrial warehouse.

A former BT office in Wolverhampton was sold in 2020 with planning permission in place for residential development, with the same happening that year at a site in Ipswich. A call center in Canterbury was given planning permission for conversion to residential in 2020. A former BT depot in Hackney was given the OK to be turned into luxury flats in 2018, while a disused BT car park in Watford was granted planning permission for residential development in 2024.

Several exchanges have also been closed and repurposed. In 2002, Telereal looked to redevelop a former exchange in Tunbridge Wells into retirement accommodation and sold a former exchange site in Birmingham to an industrial developer. Around the same time, BT sold another former exchange in central Nottingham to a developer looking to turn the site into flats.

Another exchange in Preston was converted to student halls in 2001 – and in 2025 looks set to be pulled down for a new residential development. An exchange in London’s Marylebone was sold by Telereal in 2004 to be converted to residential developments. In London’s Hounslow, planning permission to turn a former exchange into residential apartments was granted to the company in 2015, while a former exchange in Cheltenham was sold to a residential developer in 2021. 2021 also saw Ipswich Borough Council approve plans to build 150 homes on the site of a former BT data center and office that were vacated in 2015 and later bought by the council.

Earlier in 2025, TT Group filed to redevelop a former single-story BT data center in Glasgow, Scotland, into a multi-story “residential-led mixed-use development” set to house more than 1,000 rooms.

An eye-catching former exchange in London’s Canary Wharf – the 500,000 sq ft Mondial House – was closed and sold by BT in 2004 and demolished in 2006. Built in 1976, it was Europe’s largest exchange at the time and known for its sleek modern white design. The site was sold separately from the Telereal portfolio, to UBS, and is the home of a newer office development.

In London, UK hotel firm Dominus is set to repurpose Openreach’s former HQ at 123 Judd Street into a 250-bed hotel. Owned by BT and not part of the Telereal portfolio, the telco moved staff out of the site in 2024 to a new office, but continues to operate an exchange there and will still do so after the hotel is developed. Openreach told DCD that the facility is not part of the initial 108 exchange closure program.

BT Group declined to comment about its future real estate plans to DCD.

A lost legacy?

While the commercial goals of Telereal and BT will come first, it feels a shame to potentially lose so much of the UK’s communications history to redevelopment with barely a whimper.

Few exchanges have any kind of listed or protected status. Grade II listing has been awarded to a small number of late 19th and early 20th-century telephone exchange buildings, including ones in Kensington and Chelsea, Manchester, Lewisham, and Reading. Lisa Kinch, a historic places adviser for Historic England and associate lecturer at the Manchester School of Architecture, notes a further 9-15 telephone exchanges are included within various other list entries, depending on how generous you are with the definition of a telephone exchange.

Historic Environment Scotland has listed a few post-war telephone exchange buildings in Scotland, for example, the Perth Telephone Exchange by Alfred Charles Shallis. Except for the BT Tower in London, no post-war telephone exchange buildings are currently listed by Historic England. A mid-century, subterranean GPO Telephone Exchange at MoD Corsham is listed as a scheduled monument.

“As we risk losing many telephone exchange buildings following the PSTN switch off, I believe a thorough assessment of the building type is required before it is too late,” warns Kinch. “For example, the Empress Telephone Exchange in West Kensington was demolished in the early 2010s, and a glass tile mural by Brian Moore was lost.”

Kinch did her PhD research on telephone exchanges in the UK, giving her a unique view on these buildings and their historical context. In her research, Kinch said that there has been “no evident consideration of heritage agendas” in BT/Telereal’s general approach to redeveloping exited exchanges in the years since the sale-leaseback agreement in 2001.

“We risk losing them without a thorough understanding of the historic and architectural values of this technologically driven building type,” she noted in her research. She adds to DCD: “Telephone exchange buildings embody significant architectural, social, political, and technological histories. This should perhaps be recognized through listed status, at least where the buildings face [the] threat of demolition.”

When asked about her feelings by DCD, however, she says she would be “delighted” if most exchanges were turned into flats and hotels, or some other use, rather than simply being demolished.

“That said, I do not think all telephone exchanges are worth keeping. A carefully considered approach is needed to decide what is kept and what is demolished. Where there are genuine opportunities to convert these buildings into alternative uses, it is an option that should be pursued for multiple reasons.”

Kinch notes the embedded carbon of buildings means reuse and retrofits offer environmental benefits compared to demolition, but acknowledges some sites might require significant work to make good and safe.

“A sensible approach is needed,” she says.