Supermarket giant Sainsbury’s is to relocate its London Holborn headquarters to one of Britain’s most important regeneration projects at King’s Cross.
In a deal that is expected to be announced later today Sainsbury’s is thought to have agreed terms with the £2bn King’s Cross Central developer, Argent, over a significant prelet at the mixed-use scheme. It is also thought to be keen to secure a site at the development for a supermarket.
Sainsbury’s has around 2,000 staff based in a 330,000 sq ft building at 33 Holborn, which is owned by German open-ended fund manager Union Investment Real Estate. Its lease expires in 2025. It is thought to be paying a rent of between £52-£55/sq ft
However, with rival Tesco occupying cheaper premises at Cheshunt, Hertfordshire, Sainsbury’s has been keen to find cheaper headquarters.
Sainsbury’s began a review of its estate last December in London to evaluate its cost efficiency. It appointed Cushman & Wakefield to assess the costs of a move and looked at a variety of options, including the relocation of hundreds of staff to sites across the UK.
The prospects of subletting all of its space at 33 Holborn looks more realistic now as rental growth in Midtown increases. Headline rents of £76/sq ft have been achieved at Land Securities' New Fetter Lane scheme.
Argent’s plans involve a 7.9m sq ft mixed-use scheme at a 67 acre brownfield site to the north of King’s Cross and St Pancras stations. London & Continental Railways and Exel own the land.