Google Continues Real Estate Push With $1bn London Office Purchase

Alphabet continues to invest heavily in expanding its real estate portfolio, despite most staff working from home due to the Coronavirus pandemic.

Google has announced a $1bn (£728m) deal to buy the London development Central Saint Giles,next to Tottenham Court Road station and Oxford Street.

At the moment, Google rents space in the brightly coloured development with a red, green, orange and yellow facade, designed by the architect Renzo Piano, but will now purchase it outright.

Building purchase

The building includes 408,000 sq ft (38,000 sq metres) of office space, as well as more than 100 residential apartments, and is home to restaurants and cafes on the ground floor.

The Central Saint Giles building had been owned by a joint venture between Legal & General Investment Management Real Assets and Mitsubishi Estate London Limited.

But after the purchase, Google said it will redevelop it, so that it has space for 10,000 employees in the UK, a significant increase on the 6,400 staff it currently has in the UK.

“We have been privileged to operate in the UK for nearly 20 years, and our purchase of the Central Saint Giles development reflects our continued commitment to the country’s growth and success,” Ruth Porat, CFO of Google’s parent company Alphabet was quoted as saying.

Google plans to refit the building so it is adapted for in-person teamwork and has meeting rooms for hybrid working, as well as creating more space for individuals.

The new refurbishment will also feature outdoor covered working spaces to enable work in the fresh air, the company said.

Google of course is also building its new 11 story London headquarters next to the railway lines that run in and out of King’s Cross railway station.

Google also has offices in London and Manchester.

Hybrid working

Google staff were supposed to have returned to the office from 10 January, but last month said it was delaying its return-to-office plan globally amid growing concerns over the Omicron variant of the Coronavirus.

When the pandemic eventually ends, Google will operate a hybrid workplace model, with staff splitting their time between the office and an offsite (i.e. home) location.

They will spend on average three days a week at their desks.

Google staff are also allowed to request working entirely remotely, although this will not be possible for all roles.

Real estate expansion

Despite the Covid-19 pandemic having forced the staff of most tech firms to work from home for the past 18 months, Google has continued to invest heavily in real-estate around the world.

In 2018 Google announced plans to spend $1 billion (£790m) on a new presence in New York City.

Then in September 2020 Google sought to lease an additional 70,000 sq ft in office buildings in London, after it had apparently agreed to extend its lease at the Central Saint Giles site near Tottenham Court Road, for a further decade.

But Google really cemented its real-estate intentions in March 2021, when it pledged to spend $7 billion on office space and data centres this year across the United States, with $250m set aside for New York City.

A few months later in May 2021 Google announced it would open a New York retail store in the Chelsea neighbourhood, to physically showcase its hardware products.

Then in September 2021 Google purchased an office building (St John’s Terminal Building) in the Hudson Square neighbourhood of Manhattan for $2.1 billion.