Marks & Spencer has signed a pre-letting with Paddington Development Corp. for a 240,000 sf development, designed by Lord Rogers. As well as housing the retailer's head office, the centre will also have a 13,000 sf Marks & Spencer store selling food and clothing. Completion is expected in 2003.

Marks & Spencer moved into Michael House, its current 480,000 sf Baker Street head office, in 1957, and it still employs 3,000 people there. The site is held on a 100-year lease from the Portman Estate, and Marks & Spencer's move opens up the possibility of a marriage value deal to facilitate a redevelopment project.

The new head office will only accommodate 1,600 people. Head office job losses look inevitable, but more office moves may be in the cards: Marks & Spencer is known to have looked at offices in Milton Keynes, Buckinghamshire, and certain back office functions might be relocated out of London.

Luc Vandevelde, Marks & Spencer's chairman and chief executive, said: 'A flexible and inspiring workspace tailored specifically for our requirements is exactly what we need to encourage the creativity and innovation of our people. This move to a more efficient, modern environment takes us into the next phase of building a better Marks & Spencer business. It also gives us the opportunity to release the financial asset we have in Michael House.'

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