JP Morgan buys £495m European HQ
Investment banking giant JP Morgan gave a boost to London today with a £495m property deal to house its European headquarters in Canary Wharf.
The group is buying 25 Bank Street in Canary Wharf - the former London base of failed US bank Lehman Brothers - to merge its four investment banking operations spread across the capital.
Its decision marks a welcome commitment to London amid concerns over its attractiveness as a global financial centre ahead of the new banking tax levy and plans for a bonus crackdown.
London mayor Boris Johnson described the news as a "tremendous coup".
"JP Morgan's commitment to London will help ensure the capital retains its position as a banking powerhouse which drives the UK economy and attracts the brightest and best stars from the financial world," he said.
JP Morgan will move its 7,000-8,000 London investment banking employees to the new building in 2012.
The Bank Street building was completed in 2003 and has more than one million square feet of floor space, with technology and infrastructure specifically designed for a financial institution.
Jamie Dimon, chairman and chief executive of JP Morgan, said: "This acquisition is a long-term investment and represents part of our continued commitment to London as one of the world's most important financial centres."
It had been thought JP Morgan was planning to move into the Riverside South site in Canary Wharf, which it agreed to buy for £237.9m in November 2008 and is developing with the Canary Wharf Group.
The bank, which has already paid £68.5m for the development, confirmed it will continue on the site.
It is expected to build the development up to street level before deciding how to take forward its involvement with the project.
The group also said today it had bought 60 Victoria Embankment, a London building that the firm has been leasing since 1991 and accommodates its Treasury and Securities Services division.
JP Morgan employs more than 11,000 staff across London and has been looking for larger premises after expanding in recent years, with deals including the takeover of UK investment bank Cazenove in January.
Its presence in London may help ease some fears of a mass exodus of banking groups.
HSBC's former chief executive Michael Geoghegan, who stepped down on Friday, said in an interview with the Daily Telegraph that the bank's shareholders were questioning the financial viability of retaining its London HQ.
New rules on bonus handouts, the impending new tax on banking operations and threats of a tougher regulatory environment are raising concerns that London's competitiveness will be hit if other countries do not follow suit.