* Google buys London site to build 1 mln sq ft HQ
* Office to be worth $1.6 bln when developed - source
* Google investing 650 mln stg in scheme - source
* Work to start in late-2013, to complete by 2016
LONDON, Jan 17 Google Inc. is
developing a new UK headquarters which could be worth as much as
1 billion pounds ($1.6 billion) when finished, the latest
overseas property deal for the cash-rich U.S. Internet group.
Google has purchased a 2.4 acre plot at the Kings Cross
Central development, one of London's biggest regeneration
schemes, where it will build a 1 million square foot office, the
property developers behind the project said on Thursday without
disclosing the purchase price.
A separate source with knowledge of the deal said Google was
investing 650 million pounds to buy and develop the site. The
office building will be worth up to 1 billion pounds when it is
finished in 2016, a second source said.
"This is a big investment by Google, we're committing
further to the UK - where computing and the web were invented.
It's good news for Google, for London and for the UK," Google's
Vice President for Northern and Central Europe, Matt Brittin,
said in a statement.
Google will move from its current offices in the UK
capital's Victoria and Holborn districts in 2016 when the
building completes. Construction on the site will start in late
2013 and the building will range in height from 7 to 11 storeys.
Kings Cross Central, which sits on a former fish, coal and
grain goods yard to the north of the city, spans 67 acres and
will contain homes, offices and shops. It is being built by the
Kings Cross Central Limited Partnership which includes developer
Google's new neighbours when it moves will include the real
estate arm of French bank BNP Paribas, as well as a
cultural and education centre managed by the Aga Khan, spiritual
leader of Ismaili Muslims.
Google has traditionally leased its overseas offices but in
the past two years has purchased premises in Paris, Dublin, and
now London, its filings show.
As of December 31, 2011, Google has $44.6 billion of cash,
with $21.2 billion of that held offshore, according to its 2011
annual report. If the funds held offshore were repatriated, they
would be subject to U.S. taxes, Google said.
Tax campaigner and accountant Richard Murphy said the
decision to buy property rather than rent was likely "tax
motivated" and driven by the fact the company cannot repatriate
the cash to the U.S. without paying a fat tax bill.
"If you're not going to send it back to the parent company
to repurchase its shares, which is the normal route for a U.S.
corporation sitting on a pile of cash, what else are you going
to do with it?" he said
Google declined to comment on the tax issue.
Office landlords see Google as a prized tenant as its
presence is expected to draw other technology companies -
especially small start-ups - and help to bump up rents.