(Bloomberg) — UBS Group AG plans to give up another office building in the City of London, the firm’s latest move to reduce surplus space in the capital.
The Swiss bank won’t renew its lease on 1 Golden Lane when it expires next year, with staff likely to be relocated to its main London base or allowed to work from home, according to people with knowledge of the plan, who asked not to be identified because the information is private.
UBS has been cutting down the number of offices it rents in London ever since moving into its new purpose-built premises at 5 Broadgate, which has more efficient layouts and uses shared desks to reduce the amount of space needed by the lender. Buildings previously occupied by the bank include 100 Liverpool Street and 2-3 Finsbury Avenue.
The decision to vacate the Golden Lane building was made shortly before the first wave of the pandemic struck, and isn’t related to UBS’s plans to allow more flexible working, one of the people said. Former Chief Executive Officer Sergio Ermotti said in July that as many as a third of employees could work from home in the future.
A spokeswoman for UBS declined to comment.
Banks have been shedding offices across London that they acquired in the boom years before the last financial crisis, opting to move staff into more efficient buildings. Their London footprint has been reduced by at least 6 million square feet in the past nine years — the equivalent of a dozen Gherkin skyscrapers, according to broker CBRE Group Inc.
The Golden Lane building is mostly used by UBS’s back office staff, the people said. Decisions over which staff could now be allowed to work from home on a permanent basis have not yet been made, one of the people said.
Read more: Banks Are Ditching London Offices, Not Just Because of Covid
The pandemic is accelerating a divergence in London’s office market, with companies continue to pay high rents for the best modern buildings that can attract and retain talented staff, while dumping space in older properties. That’s helped developers with new buildings even as overall demand has slumped.
Great Portland Estates Plc said Friday that it leased a recently upgraded building in London’s Whitechapel district to marketing agency Four Communications Group.
(Updates with Great Portland lease deal in last paragraph)
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