EY is considering abandoning its London headquarters, the latest sign that office life is deteriorating as more people work from home.
After launching an office property review at its More London location near London Bridge, the Big Four accountant has been said to be considering its options.
The 10 storey building is located between London Bridge Bridge and Tower Bridge on the south side of the River Thames. It has been home to EY UK and Ireland’s businesses since 2003.
The partnership may abandon its tower block, as employees increasingly work remotely. In 2021 EY will adopt a hybrid policy “with the expectation most people would spend at least 2 days per week working remotely.”
The More London office is most busy between Tuesday and Thursday. During peak hours, occupancy is at 88pc.
In preparation for EY’s 25-year lease expiring in 2028, a review has been initiated. The review, which is still in its initial stages, will consider office occupancy rates. A final decision has not been made.
The potential exit is despite EY’s nearly tripling in size since they first moved into the building.
More than 13,500 people are based in London, including the firm’s financial services team located at its separate office in Canary Wharf. London is home to more than 13,500 employees, including the financial services team in Canary Wharf’s separate offices.
The auditor announced massive cost-cutting measure as well as plans for layoffs due to economic uncertainty.
EY also wants to recover from a botched breakup plan, on which the firm spent 600m dollars (£481.6m), before abandoning it earlier this year.
As more employees work from home, the company is now the latest major London-based employer to reconsider whether they need a tower block.
Canary Wharf is experiencing a number of high profile exits, such as HSBC who plans to leave their headquarters – nicknamed “Tower of Doom”, at the end of the tenancy.
Credit Suisse will leave as part of UBS’ integration. Clifford Chance, a Magic Circle law firm, is also leaving the district to open an office in The City of London.
The demand for office space in London is falling as bosses abandon attempts to get workers to return to their desks. Instead, they let employees work from home part of the time.
Around 10pc (or offices) of central London’s office space is currently vacant.
In an effort to attract tenants, landlords are offering extended rent-free periods as well as free office fittings.
According to Carter Jonas property consultancy, companies signing long-term leases for office space in London can now expect to receive a rent-free period of one year and half, as opposed to five months prior to 2019.
Canary Wharf offers the longest average period of rent-free in central London, sometimes reaching three years. The district has a vacancy rate of 14.8%.
EY moved to its open-plan More London offices in 2003. Foster and Partners designed the building, which was part of a £800m regeneration project for Southwark’s abandoned docklands.
More London is a 13-acre project owned by Kuwait’s sovereign wealth fund. It also houses , the Big Four rival firm PwC, and the former City Hall. In 2021, the Greater London Authority and Mayor of London moved from the Norman Foster designed building to a more affordable location in East London.
A spokesperson for EY said: “As an expanding business with more than 20 offices in the UK, EY continually reviews its real estate footprint. We don’t comment on speculation.”
Canary Wharf has declined to comment.