Microsoft has agreed a deal to lease an 80K SF HQ on the outskirts of Reading and is weighing options for a new London office.

Microsoft is under offer to occupy the Here building in Thames Valley Park, 40 miles to the west of London, CoStar News reported.

The first wave of tech companies to arrive in London in the 1990s, including Microsoft, set up UK HQs in the Thames Valley, but more recently firms like Google, Meta and Amazon have based themselves in central London.

Microsoft had a requirement for a central London office of up to 500K SF four years ago. That was shelved last year after the company said it was cutting 10,000 staff, 5% of its workforce, CoStar said. The company leases about 100K SF at British Land and GIC’s Paddington Central office campus.

In Reading, Microsoft historically occupied 380K SF across five buildings at Thames Valley Park.

It owned two of those buildings, totalling 140K SF, which it sold to Baumont Real Estate and vacated.

The tech giant stayed in occupation at three buildings totalling 240K SF that are owned by clients of asset management firm Valesco. It will now exit those buildings and take 80K SF in the Here building, which is a refurbishment of one of the buildings it previously sold.

Valesco paid £100M in 2018 for the three buildings Microsoft owned, buying them from a special servicer representing the lenders. It will now need to decide what to do with the empty office buildings.