Brewing giant Anheuser-Busch InBev has put on hold plans to roughly double the size of its UK headquarters as growing Brexit uncertainty weighs on investment decisions.
The Belgian company, which owns beer brands including Budweiser and Corona, was in advanced talks to lease all of the additional space in London’s Bureau building, where it already occupies the top four floors, two people with knowledge of the matter said.
AB InBev was seeking additional space to facilitate UK expansion plans, but the talks have broken down, the people said, asking not to be identified because the plans are private. A lack of clarity over Brexit ahead of the October 31 deadline was a factor in the decision to hold off on signing, they said.
“As we grow as a business, we are always looking at alternatives to optimise our footprint and are considering different options for this, including looking at additional office space,” AB InBev said in an emailed statement. “While we have not yet made a decision here, this is related to a number of factors, rather than tied to Brexit only.”
A spokesman for Evans Randall Investors, which developed the building on the edge of London’s financial district, declined to comment.
AB InBev brews the majority of the beer it sells in the UK locally using domestic ingredients, so the company would be less directly affected by a no-deal Brexit than players in industries such as auto manufacturing, which rely on imported parts delivered via just-in-time supply chains.
Amid concern over Brexit, Nissan Motor has warned that any new tariffs stemming from a disorderly departure could render its UK operations unviable, while the likes of Japanese electronics giant Panasonic Corp. have moved European headquarters functions out of the UK and banks have relocated some staff in order to keep key functions within the EU.
London real estate has held up better than forecast since the 2016 Brexit vote, as companies have continued to lease space while new development has been relatively constrained, keeping rents high. Still, the market has proven volatile, with the runup to each of the previous deadlines for the country’s exit from the European Union marked by a modest slowdown.
AB InBev began moving staff into the Bureau building at the start of this year from its previous UK headquarters in Luton, about 30 miles north of London. The property, which features facial recognition technology, a bar and a chandelier made of Stella Artois beer glasses, has the capacity for more than 600 workers.
“We want to become a bigger brewer in the UK and No. 1 in terms of market share,” AB InBev UK head Paula Lindenberg said in an interview with the London Evening Standard newspaper last month.
© 2019 Bloomberg L.P.