Google is keeping mum about how much was spent on the plot, but one source with knowledge of the deal told Reuters that Google has invested roughly £650 million ($1.04 billion) on the property, which, when finished, will be valued at more than £1 billion ($1.6 billion).
"This is a big investment by Google," Matt Britin, Google's VP for Northern and Central Europe, said in a statement. "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 currently has offices in London’s Victoria and Holborn districts, and employees will move from those districts to the new headquarters once building is finished in 2016.
The new London HQ is currently being built by the King’s Cross Central Limited Partnership, which includes commercial and residential developer Argent Group. Google’s neighbors, once it moves in, will include the real estate branch of French bank BNP Paribas, as well as an education center managed by Ismaili Muslim leader Aga Khan.
Google traditionally leases its overseas offices, but recent company filings show it has recently purchased sites in Paris and also Dublin, the latter of which was bought outright in 2011.
Richard Murphy, an accountant and tax campaigner, said Google’s decision to purchase property rather than rent it was likely “tax motivated” since the company can’t repatriate its cash to the U.S. without paying a hefty tax.
“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?” Murphy asked Reuters.
Google’s move is just one part of the rebuilding and rebranding process of the King’s Cross area since it introduced the Eurostar terminal at St. Pancras back in 2007. Since that time, many large organizations have migrated into the area, including the art college Central St. Martin’s, as well as Guardian News & Media. Many landlords in King’s Cross will be pleased to see Google expand its presence in the area, which will be sure to draw in more technology companies and startups -- in other words, a great reason to bump up the rent.