26 September 2023

Meta pays developer £149m to break lease on London office building

26 September 2023

Commercial property giant British Land said Facebook owner Meta has surrendered the lease on one of its London office buildings as technology firms continue to slash their costs.

Meta paid the FTSE 250 developer £149 million on Monday in order to break the lease on the building, 1 Triton Square.

The tech firm, which also owns Instagram, let the space from 2021 following a refurbishment but never moved into the space.

Meta has three open London sites including a neighbouring building in Regent’s Place, near Warren Street in central London.

The move comes as Mark Zuckerberg has cut thousands of jobs as part of a significant cost-cutting programme and sought to reduce its real estate footprint.

Analysts at BNP Paribas Exane claimed Meta has another 18 years on its lease at the site.

British Land said it will receive the one-off payment to end the lease but the agreement would also reduce its earnings per share by 0.6% over the six months to next March.

However, the firm held its earnings guidance for the year due to a boost from stronger-than-expected collections of rent owed from the Covid-19 pandemic.

On Tuesday, British Land also told shareholders that it has seen “strong leasing activity” in recent months that strengthened its balance sheet.

Simon Carter, chief executive officer of British Land, said: “I am pleased with the continued momentum in the business.

“Operationally we are seeing strong leasing activity which reflects the exceptional quality of our portfolio and has resulted in our recent upgrade of the expected ERV (estimated rental value) growth in retail parks.

“We have also strengthened our balance sheet in the period and continue to actively recycle capital with the disposal of non-core assets ahead of book value.”

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