NHS Property Services is reviewing whether to exit its City of London headquarters at 99 Gresham Street, EC2V, as part of a cost-cutting drive.
The organisation occupies 27,416 sq ft on the ground and first floor of the building on a five-year lease, which expires in January 2022.
NHSPS is the Department of Health and Social Care’s wholly-owned private limited company which owns around 10% of the NHS estate and provides facilities services, focused largely on primary care buildings.
The office is home to 62 employees, with central operations, including town planning and leadership. It has a further 10 offices in the South for around 500 corporate employees, with the largest in Portsmouth and Birmingham.
It agreed to take space at the start of 2017 paying rents of £65 per sq ft, rates of £17.29 sq ft and a service charge of £10.61 per sq ft, according to Radius Data Exchange.
NHSPS is looking into alternatives at its lease expiry nears, as part of a company-wide move to cut costs.
Chief executive Martin Steele told EG: “I think every single major corporate is looking at their property overheard and thinking ‘what do we do?’ You’ve got to really consider what the new normal looks like, and we are doing exactly that right now and involving our teams and asking the question.
“We’ve got a central London head office, do we need that? If we do, should it be smaller?”
He said the benefits of productivity and work-life balance are a strong argument for flexible working. He added: “I don’t see a massive surge back into that standard office environment. Our lease is up in January 2022, not too far away. We are thinking about it.”
The 82,352 sq ft building is owned by a private investor, bought for £136m from Legal & General in 2018. Knight Frank and JLL are the letting agents.
NHSPS is struggling with legacy debt from unpaid rent across its estate, totalling £578m at March 2019, with £110m already written off. It is working to reduce recurring costs for the business and has a target to save £33m this year, compared with £48m last year.
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