Google says it will spend $1 billion to buy an office building near London’s Tottenham Court Road, betting big on its employees returning to work.
The Silicon Valley giant is making the move, though it’s also building a massive new headquarters in nearby King’s Cross because it believes the office “is a place to collaborate and connect face-to-face.”
When combined with other offices across the UK, the purchase of Central St Giles will give Google the capacity to accommodate 10,000 workers. It currently employs 6,400 staff in the UK, but says it has added almost 700 positions in the past year and now has 165 open roles.
The investment in Central Saint Giles comes despite the uncertainty surrounding workers’ readiness to return to the office.
In the UK, vacancy rates have increased during the pandemic and millions of square feet of office space have been occupied close or switch for other uses, such as housing, such as the need for a workspace contract.
Real estate companies expect that the shift to more flexible work will leave a large portion of the market redundant over the next few years.
But high-end offices with strong environmental certifications are still in demand from tenants and investors, who must meet more. strict emissions target and compete in a war for talent.
In Google, the company said, “some” of its UK employees have decided to make the switch to remote working permanently. Globally, about 20% of workers are allowed to work from home full-time.
Company policies on teleworking have had some revisions and deferrals during the pandemic. Most recently, it told employees they were aiming for three days per week in the office model.
The search giant’s leadership has also taken a tough stance on vaccinations, announcing a series of measures such as paid and then unpaid leave for those who refuse to be vaccinated.
Google says part of its investment will include the repositioning of existing office space, including the creation of “campfire” spaces that are intended to “strengthen” the office.
Google Chief Financial Officer, Ruth Porat, said: “We have had the privilege of operating in the UK for almost 20 years and the purchase of the Central Saint Giles development reflects our unwavering commitment to with the development and success of the country”.
Google will become the owner of existing Central Saint Giles businesses, including NBCUniversal. Google said it anticipates no changes to tenants as a result of their purchases.
Its campus in King’s Cross, at a similar cost, broke ground in 2017 but has no completion date.