British Gas has confirmed plans to vacate Rivermill House, its 17-storey headquarters on the banks of the Thames in London, and move to two floors of the Adelphi building in the Strand.
The company intends to have 80 people at the new corporate centre, with most of the 2,000 employees who are now at various London offices moving to Reading, Berkshire.
The company is taking the space from Eurotunnel, which will move to Canary Wharf in London's Docklands later this year. Eurotunnel, which declined to comment, is expected to pay little or no rent for the first two years.
British Gas said the rationalisation of the London properties would save about pounds 30m a year. In addition to Rivermill House, British Gas has "inefficient and expensive sites" including offices at Marble Arch, Holborn and Pimlico. The company is understood to be paying annual rent of about pounds 42.50 a square foot for the Adelphi, with the lease lasting 15 years.
British Gas is in the throes of rationalising its entire property portfolio, which is worth pounds 1.1bn and ranges from office buildings to old gasworks sites.