Google Inc (GOOG) Follows in the Footsteps of…McDonald’s Corporation (MCD)?

And the real-estate fun continues. This week, Google Inc (NASDAQ:GOOG) revealed that its three small offices in London will be consolidated on 2.4 acres of prime land near the massive King’s Cross subway station. The company will spend about $1 billion to buy the plot and build an 11-story tower with 1 million square feet of office space, and the whole thing should be worth some $1.6 billion when construction ends in 2016.

That’s a 60% return on the investment before Google Inc (NASDAQ:GOOG) even moves in and starts using the building. McDonald’s would be proud.

This investment also helps Google Inc (NASDAQ:GOOG) do something useful with the substantial cash reserves being held overseas. At the end of 2011, $21 billion of Google’s $45 billion in cash equivalents sat in foreign accounts. Management has no plans to bring that money back home anytime soon, at least partly due to repatriation tax penalties. This might be a sign that Google Inc (NASDAQ:GOOG) is thinking of even more big-ticket real-estate investments around the world.

The article Google Follows in the Footsteps of…McDonald’s? originally appeared on Fool.com.

Fool contributor Anders Bylund owns shares of Google, but he holds no other position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+.The Motley Fool owns shares of Google and McDonald’s. Motley Fool newsletter services have recommended buying shares of Google and McDonald’s. Motley Fool newsletter services have recommended creating a bull call spread position in McDonald’s. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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