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BP to sell office in latest rethink of working patterns

Lucy Harley-McKeown
·2-min read
Noblesville - Circa August 2018: BP Retail Gas Station. BP is One of the World's Leading Integrated Oil and Gas Companies V
BP is planning to sell its HQ, according to reports. Photo: Getty

The coronavirus pandemic has led many businesses to rethink how they use their office space, with BP (BP) the latest to draw up plans to sell its headquarters.

The oil giant, which employs 6,500 staff in its London and Surrey-based offices, plans to lease the building back from the new owner for up to two years until moving out permanently, according to reports in the Sunday Times.

The report noted that BP chief Bernard Looney has previously said the FTSE 100 (^FTSE) company will move to a more “hybrid work style,” balancing home and office working.

This comes alongside news that banks could also be moving away from working in big office blocks in the near future by converting underused parts of their high street branches into space to work.

Virgin Money (VMUK.L) and Metro Bank (MTRO.L) have already made plans to convert parts of branches into flexible working space, according to the FT. The report also said Lloyds Banking Group (LYG) would begin testing similar measures from October.

A combination of swathes of businesses saying employees will work from home until the new year, and downsizing at many firms has left business leaders questioning their commercial office arrangements. This has brought uncertainty in the property market.

READ MORE: Pace of decline in private sector activity continues to ease

BP’s HQ, on St James’s Square, could fetch more than £300m ($400.5m), if there’s appetite for it.

Savills (SVS.L), an estate agent, forecast that 7.2% of office space in the City of London will be empty next year, the highest vacancy levels since the financial crisis.

BP’s proposed sale also comes as Britain's government has urged people to return to work amid concern about the impact of the coronavirus lockdown on the economy and struggling high street businesses.

A Morgan Stanley study published in early August indicated just one-third (34%) of British office workers had returned to their desks, compared to 68% in Europe.

Use of public transport, including national rail services, and buses and underground trains in the capital has remained well under capacity, government statistics showed.

A study by University College London also indicated almost a third of people aged 30-59 and 30% of those aged 18-29 planned to work from home after the end of the pandemic.

BP didn’t immediately respond to Yahoo Finance UK requests for comment.

READ MORE: Coronavirus: Sunak mulls sweeping tax hikes to pay for recovery