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JPMorgan Chase has stepped up planning for a new tower at Canary Wharf after determining that refitting its existing office in the Docklands financial district could come at a significant cost.
The bank has been performing detailed due diligence on building out the Riverside South plot it bought in 2008, according to people familiar with the matter, as it weighs up options for its European headquarters.
JPMorgan is currently based at 25 Bank Street, a building formerly occupied by Lehman Brothers which it picked up in the aftermath of the investment bank’s collapse despite having already started developing the Riverside plot.
The bank’s expansion in the UK, including the launch of its retail product Chase, means it has since outgrown the property. 25 Bank Street is also relatively dated and will need upgrading if JPMorgan is to remain there.
JPMorgan, which has 22,000 people in the UK, has leased a building previously occupied by Credit Suisse for its Chase employees.
While no decision has yet been made on whether the bank will opt to move from its existing building or refurbish it, bank executives believe the option of building a new tower to accommodate all London-based employees may be preferable.
JPMorgan is currently preparing to move into a new Foster + Partners designed headquarters in New York, where it will relocate 10,000 employees starting later this month.
One of the key issues with refurbishing the London office at 25 Bank Street is the cost associated with taking on the project as well as the disruption it would entail, people familiar with the matter said. Citigroup’s refit of its flagship Canary Wharf tower is expected to cost more than £1bn, the Financial Times reported earlier this year.
The foundations of the Riverside site — which was originally intended as the bank’s European headquarters before it switched plans during the financial crisis — have already been laid and the basement levels completed, which means much of the heavy lifting has been done.
JPMorgan could yet decide to move to the City of London, following in the footsteps of Europe’s largest bank HSBC. Finding a suitable building would be challenging, the people said, making this option less likely.
If JPMorgan does proceed with the development at Riverside, it would be a boon for the east London financial district, which has been slowly bouncing back after high interest rates and concerns about the viability of the office in a post-lockdown world dented commercial real estate prices.
The valuations of some of Canary Wharf’s largest offices are rising for the first time in three years and footfall has been increasing as more shops, restaurants and apartments have been added to the area.
Some top tenants, including law firm Clifford Chance and HSBC, have opted to shift their bases to the City, although HSBC has decided to keep a presence in Canary Wharf rather than quit entirely. Meanwhile, other financial services groups such as Visa are committing to the district, the FT has previously reported.
JPMorgan declined to comment.
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