KPMG is struggling to find a tenant to take over its luxury office space in Mayfair, part of which was formerly used as a private members’ club. The auditor has been looking to offload the controversial property for more than six months, Financial News can reveal.
The Big Four accountancy firm received 10 enquiries about the lease on Number Twenty in January, a person familiar with the matter said. However, none of these have led to official bids or “concrete talks” to take over the 40,000 sq ft Mayfair townhouse.
Number Twenty opened in 2015 as a space for KPMG’s clients to meet in central London, after the auditor moved all of its London employees to its headquarters in Canary Wharf.
However, the accountancy firm decided to stop clients from using the Mayfair space without a KPMG staff member being present last year after the Financial Reporting Council, the audit regulator, expressed concerns about hospitality perks being offered to clients.
A spokesman for the FRC said: “Our ethical standard makes clear that an audit firm should only be offering hospitality to a client that an objective, reasonable and informed third party would agree was trivial in value.”
It is unclear if the sale of Number Twenty is among the 150 measures being considered under Project Zebra, a cost-cutting drive to save KPMG £100m. KPMG declined to confirm if this was the case.
Bill Michael, the UK chair of KPMG, told FN in January that the firm was “spending [money on] stuff that many organisations weren’t”. The auditor pays around £4.6m in rent each year for the property, according to property database Radius Data Exchange.
The five-storey luxury office space was opened by Michael’s predecessor Simon Collins. The property, which has an on-site restaurant, is also a dedicated events space for the Big Four auditor.
Interest spiked in the property after the Japanese investment giant SoftBank pulled out of advanced talks in December to take over KPMG’s lease.
KPMG said it will look for another central London facility for staff if it finds a tenant for Number Twenty. The firm’s clients will also have to be accompanied by a member of staff to access the new office space.
“We remain committed to a central London venue,” a KPMG spokesman said. “Like any large business, we keep elements of our property estate under review to ensure that they remain fit for purpose and continue to provide the facilities and services our clients need.”
JLL was reportedly appointed by KPMG as the property agent for Number Twenty. The real estate group declined to comment.
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