Google is investing around £762.5 mln (€912 mln) to acquire Central St Giles, the London office complex it currently occupies as tenant, in what is seen as a major vote of confidence of the tech giant in the UK office sector.
The purchase, which is being made alongside a new development being built for the company in King’s Cross, means Google will have capacity for 10,000 employees in the UK. The asset is being acquired from Central Saint Giles Limited Partnership, a 50:50 joint venture between Legal & General Investment Management Real Assets and Mitsubishi Estate London.
‘Our focus remains on creating flexible workspaces that foster innovation, creativity and inclusivity,’ Google said in a statement.
Central Saint Giles is one of London’s more colourful mixed-use developments and one of the largest in the West End. The development, architect Renzo Piano’s first UK project, is formed of three buildings surrounding a central, public piazza.
The architecturally striking building comprises 408,000 sq ft of office space with 25,000 sq ft of restaurants and cafes at ground floor level. The building is highly sustainable, benefiting from an in-use BREEAM Excellent rating. At the western end of the site, two residential buildings contain a mix of 109 private, affordable and social apartments. The long leasehold interests of the residential buildings continue to be owned and managed by the existing owners.
The Central St Giles office will undergo a multi-million pound refurbishment, to include meeting rooms for hybrid working, flexible working spaces and outdoor covered areas for people to work in the fresh air.
Google said it expected around a fifth of its workforce to work remotely as a result of changes to the world of work following the pandemic.
Senior Vice President Ruth Porat said: ‘We have been privileged to operate in the UK for nearly 20 years, and our purchase of the Central St Giles development reflects our continued commitment to the country’s growth and success.’
London’s Mayor Sadiq Khan, said: ‘Google’s latest investment in London is fantastic news sending a clear message that our capital is a global draw for investment, business and talent. This will help London maintain its position as a world leading technology hub.’
Bill Hughes, head of Real Assets for LGIM, said: ‘The sale is a strong sign of continued demand for the highest quality central London office space. It represents an excellent outcome for our investors, derived from consistently high-quality asset management by our team over the past decade, to deliver on the business plan for Central Saint Giles. We are pleased to have concluded the deal off-market with Google, which knows the asset well and saw the potential to invest longer-term in an exceptional building.’
Yuichiro Shioda, managing director and CEO of Mitsubishi Estate London, added: ‘Mitsubishi Estate London has been involved with Central Saint Giles since the development phase, and this sale is the culmination of one of our flagship projects. Its acquisition by Google, a company renowned for occupying only the very best buildings, is a fitting legacy for one of the West End’s most successful and recognisable developments. We remain committed to London offices, through new opportunities as well as existing schemes.’
Cushman & Wakefield acted for the Central Saint Giles Limited Partnership. Google was represented by CBRE.