JPMorgan to build multi-billion pound tower in London's Canary Wharf

By Iain Withers

LONDON (Reuters) -JPMorgan Chase & Co will build a tower in London's Canary Wharf financial district, unveiling plans on Thursday to invest billions of pounds on the heels of a budget that sought to boost Britain's finances and growth.

The bank said the project would contribute 9.9 billion pounds ($13.1 billion) over six years to the local economy - including the cost of construction - and create 7,800 jobs.

"The UK government's priority of economic growth has been a critical factor in helping us make this decision," JPMorgan's Chairman and CEO Jamie Dimon said, after praising UK finance minister Rachel Reeves' budget on Wednesday that spared banks from fresh taxes.

Reeves said the decision was a "multi-billion pound vote of confidence in the UK economy".

NEW UK HQ WILL BE AMONG EUROPE'S BIGGEST

The planned 3 million-square-foot (280,000 square metres) building will be more than double the floorspace of Britain's current tallest building, The Shard in London, with around 1.3 million square feet.

It would also cover more space than JPMorgan's recently-completed 2.5 million-square-foot global headquarters on New York's Park Avenue.

A source familiar with the project said it would cost a few billion pounds to build and designs were still being finalised, including the height.

JPMorgan's decision to remain in Canary Wharf is a big win for the financial district, which struggled to retain tenants after the COVID-19 pandemic. The area is now enjoying a rebound as more firms, including JPMorgan, push staff to return to the office. The bank has been among the most forceful, requiring staff to return five days a week.

Reuters reported last year the bank was weighing options in London after outgrowing its existing 33-storey tower in Canary Wharf, including moving to the more central City of London.

The new tower will house up to 12,000 employees, JPMorgan said.

'VOTE OF CONFIDENCE'

JPMorgan said the investment was still subject to the business environment remaining positive in the UK. Britain's tax-raising budget reduced near-term uncertainty for the economy, but has not changed JPMorgan's expectation that UK government bond yields would rise next year, its head of European rates strategy said separately on Thursday.

If the investment goes ahead as planned, it would be a significant post-Brexit win for London after some financial firms were forced to move thousands of roles to the European Union to serve those clients.

PLANS FOR THE NEW TOWER ON BANKS OF THE THAMES

JPMorgan is building the tower on a site known as 'Riverside South' that it bought in 2008 to the west of the Canary Wharf estate on the banks of the River Thames.

It had originally planned to build a new UK HQ on the site, but shelved those plans after the global financial crisis in favour of moving into Lehman Brothers' old office.

JPMorgan has outgrown that 1.1 million-square-foot tower, partly due to the expansion of the British arm of retail bank Chase, which competes with local lenders like Lloyds and Barclays on current accounts and credit cards.

The new tower will be designed by Foster + Partners, the practice founded by renowned architect Norman Foster, who also designed JPMorgan's New York HQ.

Shobi Khan, CEO of Canary Wharf Group (CWG), said it was a "defining moment" for the district, adding 2025 was set to be its best year for leasing in over a decade.

Most of the new construction work in Canary Wharf has been residential in recent years, and the office vacancy rate for the wider Docklands area of 15% is higher than the London average of 10.4%, according to CoStar data.

JPMorgan is being advised by former CWG chairman George Iacobescu, who Reuters reported last week was also advising Qatar's wealth fund on how to revamp the nearby HSBC tower once that bank moves out in 2027.

The new plans also include a public park and various amenities for JPMorgan's staff including roof terraces, wellness spaces, nursing rooms, restaurants and cafes, the bank said.

Wall Street rival Goldman Sachs also said on Thursday it would expand its Birmingham office in Britain, hiring 500 staff there to double its workforce in the city in coming years.

($1 = 0.7548 pounds)

(Reporting by Iain Withers; Editing by Thomas Derpinghaus, Emelia Sithole-Matarise and Elaine Hardcastle)