Meta paid landlord British Land a £149m fee as part of its exit from 1 Triton Place
Meta paid by parent company Facebook is set to lose its lease on a major London office as its staff continue to work from home.
The social media giant has made a payment to landlord British Land as part of its exit from the eight-storey office. at 1 Triton Square, near Regent's Park, with the break charge being around seven years' rent.
BNP Paribas Exane analysts said Meta paid a «huge buyout premium» to give up approximately 310,000 sq. feet of luxury property in central London.
The Silicon Valley giant was still 18 years behind on rent for an office in a building it never occupied. The premises were subleased in 2021 after a major renovation of the block. It still uses a nearby building on Brock Street.
Meta is giving up real estate and redesigning its offices, adding more shared work areas and hot desks. This is due to the company introducing a new hybrid work policy for employees.
In line with founder Mark Zuckerberg's productivity directive, previous work-from-home rules have been rewritten to require employees to report to designated offices three times a week starting this month. In August, Meta's human resources department warned employees that they could be fired for failing to comply with the new rules.
Meta said the reduction in office space in London reflects post-pandemic demand for flexible working, while the company's UK business has also been hit by hundreds of redundancies over the past year.
p>A company spokesman said: “The future of work is already is here, and we at Meta are embracing it.”
“The last few years have brought new opportunities in the office space, and we are prioritizing targeted and balanced investments to support our most strategic long-term priorities and pave the way for workforce creation places of the future.
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“We remain strongly committed to London, as demonstrated by the recent opening of our office in King's Cross, which further strengthens our presence in the region.”
British Land chief executive Simon Carter said Meta's departure 1 Triton Square will help speed up plans to redevelop the site into an «innovation and life sciences campus».
Analysts at BNP Paribas said British Land could ultimately see increased rental income if the company is able to lease 1 Triton at a higher price per square foot thanks to rising rents in London.
Colme Lauder, the Goodbody property analyst, said Meta had given up about 1 million square feet of office space in London in less than a year. This has led to a break clause in the Dublin office while subletting another building in the Irish capital.
Other tech companies are cutting jobs amid sharp cost cuts across the industry.
< br />Earlier this year, The Telegraph reported that Twitter was facing legal action from the Crown Estate over the rent of its Eyre Street office. The issue has since been resolved. Twitter said on its UK account that it had «stopped using the office space» worth the £38.9 million contract.
In its latest financial results, Google parent Alphabet said it incurred $663m (£545m) in costs in the first half of 2023 to «optimize our global office facilities».
Meta's official move to hybrid comes as other tech companies, including Amazon and Google, are also allowing staff to work from home.
The trend has seen London offices lose a fifth of their prices in recent years. last year, according to French bank BNP Paribas.
The study, conducted by researchers at Stanford University, the University of Chicago and Mexico's ITAM Institute, found that the typical U.S. employee works from home about 1.4 days a week. In Britain the average is higher at 1.5 days a week.
They also found that IT and tech workers typically spend around half the week working from home, compared to less than one day per week on average. retail, transportation and hospitality worker.
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