Meta pays $181M for early termination of office lease in central London

Sept. 27 (UPI) -- Facebook and Instagram owner Meta paid $181 million to break a 20-year commercial lease Wednesday on a prime office building in central London that it has never occupied.

The Melo Park, Calif.-based company "surrendered" the lease as large multinational corporations continue to cut back on office space as more and more employees opt to work from home and tech firms strive to rein in costs.

Meta signed the lease for the eight-story building in an office complex at 1 Triton Square from British Land in 2021 but never moved in and paid the break penalty with 18 years still to run on the contract, according to analysts at BNP Paribas.

The tech giant reportedly had previously tried to sub-let the freshly remodeled 310,000-square-foot office, which is located opposite Regent's Park and London's diplomatic quarter.

However, British Land said Meta had a second office in the same complex that was unaffected by Wednesday's break-lease deal.

The London Stock Exchange-listed property developer said it expected earnings per share to take a 0.6% hit from the debacle in the second half of its financial year ending March 31.

Despite a "short-term earnings impact from the loss of rent," Meta vacating the property cleared the way to "accelerate our plans to reposition Regent's Place as London's premier innovation and life sciences campus," said British Land chief executive Peter Carter.

It remains unclear how much of a factor hybrid working played in Meta's thinking as the company, along with Amazon and Google, is understood to have recently ordered workers to return to the office for most of the week.

Meta still has two other offices in the British capital, in addition to its other office at British Land's Regent's Place complex.

Founder, chairman and CEO Mark Zuckerberg has cut thousands of jobs in recent months amid a tech slowdown sparked by challenges arising from the COVID-19 pandemic and mounting losses from his Metaverse Reality Labs venture.