The supermarket group Sainsbury's is to quit its landmark Holborn headquarters in central London, relocating to King's Cross in a move that property analysts believe could save it several million pounds a year.
Sainsbury's said yesterday that it would move out of the Holborn building, which it moved to only six years ago, in 2011. The company said the new site, selected after an 18-month review of its options, would "significantly reduce central office costs".
The company gave no specific figure for savings, though analysts at Property Week magazine said the supermarket group was paying up to £55 a square foot to lease the 330,000 sq ft Holborn building, equating to an annual rent of some £16m.
Sainsbury's moved into the luxuriously appointed Holborn building, built on the site of the former headquarters of Mirror Group Newspapers, in 2001. Securing the building was regarded as a coup for the group, which outbid Goldman Sachs to win the lease.
However, the expensive lease has raised eyebrows among Sainsbury's shareholders, who have contrasted the company's prime central London site with the headquarters of arch-rival Tesco, which occupies much cheaper premises in Ches-hunt, Hertfordshire.
Sainsbury's review of its property options began well before it became the target of a takeover bid from the Qatari-backed investment company Delta Two, but this has focused attention on the company's costs. It is understood Delta Two was consulted on the move.
Justin King, Sainsbury's chief executive, said the decision to relocate had also been motivated by the company's wish to occupy more environmentally friendly premises. Its new headquarters will be in the redeveloped King's Cross Central scheme, a brownfield site next to the new Eurostar terminal at St Pancras.
"We were attracted to the site as its outstanding environmental credentials support our aim to reduce energy use across our business," Mr King said. "The new premises also allow us to remain within our traditional heartland, and thereby minimise any potential disruption."
Argent, the developer of the King's Cross site, has promised to use energy efficient building design technology, with renewable energy facilities installed. These will include roof-mounted wind turbines, ground source heat panels and solar panelling.
Sainsbury's lease at Holborn will not expire until 2025, so the building will have to be sublet, but rents of £76 a square foot have recently been achieved in nearby office developments.Reuse content