AddThis SmartLayers

Homeworking plan led to 80pc cut in office space at regional daily

A publisher cut its office space by four fifths at one of the 15 regional office ‘hubs’ it created last year amid widespread newsroom closures, it has emerged.

Reach plc activated a break clause in its 10-year lease on the third floor of No.5 St Paul’s Square, in Liverpool, where the Liverpool Echo is based, resulting in a repayment of £168,000 to the landlords.

The Echo now occupies a 5,000 sq ft area on the first floor of the building, compared to the 25,000 ft space it occupied previously.

Liverpool was one of the regional hubs created last year as part of Reach’s ‘Home and Hub’ project when it announced it was closing all bar 15 of its offices in the wake of the move towards home working.

HTFP has since reported that the company now plans to create four ‘superhubs’ in Birmingham, London, Glasgow and Manchester.

The hub office in Nottingham has closed, while some of the others are being reclassified as ‘touchdown spaces.’

Liverpool St Pauls

According to Place North West, the Echo had signed a 10-year lease at No.5 St Paul’s Square in 2017, having relocated from its former Old Hall Street base.

After the five-year break clause was activated, the lease will now expire on 1 December 2022.

It is understood that Reach was required to give 12 months’ notice of the decision to activate the break clause and that this was served in November 2021.

The decision meant Reach had to repay £168,000 to the landlords in respect of discounted rates offered at the start of the agreement on the basis that it would be a 10-year rather than five-year lease.

Staff were originally told of the downsizing move in March 2021 when the ‘Home and Hub’ project was first announced, but it is understood that the move did not take place until October.

The building, owned by pension fund Aberdeen Standard, is currently up for sale, but this is not expected to affect the Echo’s occupation of the offices.

Reach’s financial results for 2021 revealed earlier this month that the ‘Home and Hub’ project resulted in impairment charges of £23.7m across the group over the course of 2021.

This was comprised of impairments of £2.3m relating to property, plant and equipment, as well as £10.5m relating to right-of-use assets and a £10.9m property rationalisation charge relating to onerous costs of vacant properties.

Reach refused to reveal how much each office incurred in charges as part of the project’s implementation when approached by HTFP and also declined to comment on Place North West’s story.

The company has also declined to reveal whether the charges have been offset by the ongoing cost savings from the Home and Hub project.