London: JPMorgan has bought the former Lehman Brothers building for its investment bank, while keeping its options open on plans to erect a new skyscraper nearby as its European headquarters.
The US bank bought the Lehman building at 25 Bank Street in London’s Canary Wharf financial district for 495 million pounds ($773.4 million), seller Canary Wharf Group (CWG) said on Monday, adding that the two groups would continue to develop the Riverside South site.
JP Morgan is still reviewing its plans for Riverside South, said John Garwood, secretary of Songbird Estates, majority owner of CWG. The site will potentially have a much larger building.
“They’re (JPMorgan) going to review what their future requirements are going to be and they’ll be looking at carrying on with a full design over the years to come,” said Garwood. “But short term, we’ll be building it up to street level and then we’ll obviously also be reviewing what’s best to go on that site.”
JPMorgan and the CWG, which owns the majority of the Canary Wharf district’s property, had stopped building a conspicious new headquarters on the Riverside South site earlier this year, triggering speculation JPMorgan would axe the costly project, under pressure from negative sentiment against banks.
“These properties are long-term investments and represent our continued commitment to London as one of the world’s most important financial centres,” JPMorgan chairman and chief executive Jamie Dimon said in a statement.
The Canary Wharf Group -- which is majority owned by Songbird Estates -- said construction work would recommence immediately to bring the development to the street level and that it had extended its development agreement with JPM until October 2016.
Shares in Songbird, whose top shareholders include Qatar’s sovereign wealth fund with 20 percent and China Investment Corp with 12.6%, were up 3.3% at 140 pence by 3:48pm, ahead of the UK property stocks index which was flat.
CWG also said it had recently agreed terms with insurer AIG for the termination of the rental cover facility at 25 Bank Street for a payment of 144.5 million pounds related to the termination of Lehman’s lease after the US investment bank collapsed in 2008.
JPMorgan said in a separate statement it had also agreed to purchase 60 Victoria Embankment, which it had been leasing since 1991 for its Treasury and Securities Services division. It did not give a price for the deal.