BP said to be selling London headquarters to HK department store operator

London

BP plc is nearing a deal to sell its London headquarters to a company controlled by Thomas Lau, brother of Hong Kong property billionaire Joseph Lau.

The oil giant is in advanced talks to sell the office building in historic St James's Square to a company backed by Lifestyle International Holdings, said people with knowledge of the matter.

The Hong Kong department store operator has offered about £235 million (S$416 million) for the property, said the sources, who asked not to be identified because the process is private.

The deal would be the first big real estate acquisition in the United Kingdom for Lifestyle International, whose chairman and largest shareholder is Mr Thomas Lau. His brother, Mr Joseph Lau, is already a major investor in London property through his development company Chinese Estates Holdings.

A BP spokesperson said the process of selling the building is ongoing and declined to comment further.

BP plans to cut 10,000 jobs amid the slump in oil prices and transition to cleaner energy, with staff in office-based jobs and those holding senior roles most affected.

The company is also moving to a mixture of home and office working as it adapts to the impact of the pandemic, said The Sunday Times newspaper, which reported the start of the sales process in August.

About 500 people are housed in the St James' Square office, including the board and executive management, said BP's website. The building has about 11,148 sq m of space, showed real estate data provider EGi.

Some of the UK's largest companies are planning to reduce the amount of office space they rent following the coronavirus crisis.

Capita is vacating an office in London's West End. Deloitte plans to close four of its 50 UK offices, said the Financial Times.

Still, large companies from Netflix to Morgan Stanley are in the process of undertaking big office moves in London which show that demand for the biggest and best buildings is recovering from lockdown lows.

WR Berkley has kicked off the sale of its 36-storey London headquarters named The Scalpel in the city's financial district, and asset manager DWS Group has put a £145 million office complex up for sale.

Lifestyle International operates some of Hong Kong's best known retail outlets, including the Sogo store. The company also owns most of the buildings from which its stores operate. BLOOMBERG