Tuesday 22 May 2018

Rolls-Royce seeks new London HQ in drive to cut costs

Rolls-Royce has occupied 37,000 sq ft at 62 Buckingham Gate on the north side of Victoria Street in London since 2014
Rolls-Royce has occupied 37,000 sq ft at 62 Buckingham Gate on the north side of Victoria Street in London since 2014

Christopher Jasper and Benjamin Katz

Rolls-Royce Holdings Plc plans to quit its headquarters in one of London's swankiest districts for cheaper offices as the company seeks to bring down long-term expenses and cover the more immediate costs of fixing a faulty jet-engine model.

Rolls-Royce needs a "smaller, more cost-effective London head-office location" than the current premises midway between the Houses of Parliament and Buckingham Palace, the company's CEO Warren East said in a memo to staff obtained by Bloomberg.

Chief operating officer Simon Kirby, who only took over the role in late 2016, will meanwhile leave, East said, adding that the executive had demonstrated "his professionalism" by developing a leaner business that effectively resulted in his own role being eliminated. Kirby was previously CEO of Britain's Stg£55bn ($75bn) HS2 high-speed rail project.

Staff based at Rolls's HQ will be briefed on options for a move in coming weeks, according to East.

The company has occupied the current 37,000 sq ft space at 62 Buckingham Gate since 2014, having moved there from an address across the street. The office is leased from Land Securities Group Plc, the UK's largest real estate investment trust.

Rolls-Royce may move across London to the area around St Pancras station, from where East and other top executives typically travel to the company's main manufacturing site in Derby several times a week.

The district has itself become a property hot-spot in recent years, with Google building a 10-storey campus at nearby King's Cross.

(Bloomberg)

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