The Canary Wharf section of London is a hotbed for banking activity. Although HSBC has shifted their headquarters to Asia, there remains significant interest in the locale from other major banks. Today, JPMorgan, the investment banking division of JPMorgan Chase (NYSE: JPM) said that it had acquired a new European headquarters at 25 Bank Street, London, a Canary Wharf skyscraper occupied by Lehman Brothers until its collapse in 2008. In a separate statement, the Canary Wharf Group said the building was being sold to J.P. Morgan for £495 million ($770 million).
The increased regulation in Britain have led many to fear the banks would jettison, and seek new markets. With this announcement though, some of those fears are being eased. The bank also announced the purchase of 60 Victoria Embankment, which houses its Treasuries and securities services business. The two acquisitions are a clear sign that the bank does not intend to quit the City, nor Britain generally, despite tighter regulation and more intense political scrutiny since the financial crisis. Jamie Dimon, Chief Executive of the bank commented “These properties are long-term investments and represent our continued commitment to London as one of the world’s most important financial centers.”
Though this news is positive, it is a bit bittersweet as well. The bank had originally intended to build an enormous new headquarters called Riverside South on another Canary Wharf site, in a plan announce in 2008 before the fall of Lehman. The land alone cost it £237 million pounds, but construction there has long since ceased. The bank has 11,000 employees in London, currently dispersed across several sites, and the move to 25 Bank Street is expected, after some refurbishing, to take place in 2012. It will not affect JPMorgan Chase’s asset management arm at Finsbury Dials.
The business district of Canary Wharf rose from London’s Docklands district, which by the 1980s was exemplary of urban decay in the capital. In 1987, London City airport was built, construction began on the Canary Wharf development a year later and by 1991 it had its first tenant, State Street. The area is now home to tens of thousands of professionals in the financial sector. When Lehman declared bankruptcy in September 2008, thousands of its British employees working in Canary Wharf lost their jobs. Canary Wharf Group said Monday that it had filed a claim against Lehman’s parent company for losses incurred when the bank defaulted on the lease.
