JP Morgan has put the sale of a huge tract of land in Canary Wharf on hold after senior management launched a review of its occupational requirements in London.
The US bank is considering whether to rekindle plans to build a huge new headquarters at Riverside South, E14, in what would be a major U-turn on a site it abandoned at the bottom of the market
The site was put up for sale through GM Real Estate and Knight Frank at the start of this year, with three parties shortlisted for the opportunity during the summer.
The shortlisted parties, which include Canary Wharf Group, have varying plans, all of which include a significant residential element in a mixed-use scheme.
The sale price for the land was expected to top £350m.
However, JP Morgan’s bosses in New York have now asked its property team to reconsider whether the land should be retained for a new European HQ in anticipation of the bank’s future growth in London.
The site, in which JP Morgan bought a long leasehold interest from Canary Wharf Group in 2008 for £237m, has consent for a 2m sq ft Rogers Stirk Harbour & Partners-designed scheme (pictured) which would have been the largest office development in London.
The bank abandoned the plans during the global financial crisis and instead opted to buy the 1m sq ft former European headquarters of Lehman Brothers at 25 Bank Street, E14, for £500m in 2010.
Although the review of the bank’s future requirement has only just begun, it is expected that should it choose to pursue a new headquarters at Riverside South, it would be unlikely to require as much as 2m sq ft.
Interested parties may therefore still get the opportunity to buy into the site in joint venture with JP Morgan, with the bank as the anchor tenant in a large mixed-use scheme.
Should the review result in a new occupational requirement, it would be a further fillip for London’s office market, where demand from US investment banks has been largely absent since the financial crisis.
There are signs that more global financial institutions are now reconsidering their future occupational needs.
Lloyds Banking Group is understood to have approached around six landlords earlier this year with a view to consolidating several London offices into a new 1m sq ft headquarters.
Any active requirement would be several years away, as most of its leases have up to 10 years left to run. However, it was keen to make the market aware of its potential future needs given the time it can take to assemble a site capable of housing such a large development.
Other banks with active requirements include Wells Fargo, Jefferies and Credit Llyonnais, while Deutsche Bank, Royal Bank of Canada and Société Générale have all satisfied major requirements in the past 12 months.
JP Morgan –which declined to comment – employs 13,000 staff in London, 8,000 of whom are based in Canary Wharf.
