Sainsbury’s has suffered a setback in its plans to move its head office to King’s Cross after a lack of buyers for its current Holborn location.
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The grocer, which planned to relocate to cut costs, told The Times it had given permission to the developers of the £2bn King’s Cross scheme to re-market the site where its new 250,000 sq ft office was supposed to be located.
Sainsbury’s chief executive Justin King inherited the extravagant office in Holborn from his predecessor Sir Peter Davies, and long planned to move the company to King’s Cross and nearly halve the retailer’s annual £16m rent costs.
Davies had beaten off competition from Goldman Sachs to complete the top of the market deal.
King signed the deal for King’s Cross in 2007, and wanted a “greener”, more basic office building that was 25% smaller and cost around £9m a year in rent. It was also going to build a supermarket on site.
However, Sainsbury’s could not find a tenant to sublease its 33 Holborn office, and could not commit to the move as it would have been paying rent on both buildings.
A Sainsbury’s spokesman told the paper: “It is still our intention to move from our Holborn Store Support Centre, but this depends on finding suitable tenants for our offices. In the meantime we have agreed with the developers at King’s Cross that they can market the unit to other potential occupiers.
‘’Sainsbury’s has not abandoned its plans to move to King’s Cross and we are continuing our discussions with Argent. It is still Sainsbury’s intention to move from Holborn but this depends on finding suitable tenants for our offices. In the meantime we have agreed with Argent that they can market the unit to other potential occupiers.”