Facebook owner Meta has abandoned its lease on a major office block in London as tech companies cut back on space amid a global economic slowdown and the rise of hybrid working.
The firm has paid £149m to surrender its contract for 1 Triton Square, a development next to Regent’s Park, despite having 18 years left on its lease for the site.
It comes as Big Tech moves to reduce costs and downsize offices in a move that has hit cities such as San Francisco but also spread to other major hubs including London.
British Land, the owner of 1 Triton Square, said it expected Meta’s decision would knock around £5.6m off its half-year earnings as it hunted for a new tenant to rent the space.
Despite this, the company reiterated its full-year guidance, saying it was being supported by better-than-expected collections of back rent from the Covid-19 pandemic.
Meta paid £149m to surrender its contract for 1 Triton Square, despite having 18 years left on its lease for the site
The multi-million-pound sum paid by Meta was estimated by analysts to be the equivalent of around seven years’ worth of rent and according to British Land boss Simon Carter would provide the property group with a cash injection to ‘accelerate’ plans to rework the office space to appeal more to life science companies.
Broker Peel Hunt also noted that there was potential for the firm to re-let the 310,000 square feet of space at a higher rent.
In December last year, Meta said it would not occupy the office in Triton Square and instead look to sub-let the space.
But a source close to British Land told the Mail the property firm had refused to allow this, triggering the decision to break the lease entirely.
Meta still rents another British Land office building nearby, 10 Brock Street, but has previously terminated leases in other cities such as New York as part of a move to cut costs.
