April 12, 2019 / 3:07 PM / in 14 days

Citigroup splashes out on London HQ

LONDON, April 12 (IFR) - Citigroup has completed the purchase of its London headquarters at 25 Canada Square, the 45-floor skyscraper on the Canary Wharf estate.

A source said the bank had paid £1bn for the building, the sixth tallest in the UK. That was less than the £1.2bn price originally asked by sellers AGC Equity Partners last October.

Citi has been in the building for 19 years and also occupies 33 Canada Square next door. The latter will house staff while the tower is refurbished in a rolling programme.

“The purchase enables us to continue occupying both buildings while modernising and improving the amenities in CGC2 (Citigroup Centre 2),” said David Livingstone, chief executive EMEA, in a memo to staff seen by IFR.

The work is to start early next year to create a state-of-the-art interior. It is expected that this will include an open-plan layout for all staff, including the most senior executives, as is the case in the bank’s New York headquarters, which Citi also bought a couple of years ago.

“The purchase is in line with the Citi strategy of owning rather than renting our major premises in an effort to cut costs in the long term,” said a spokesperson.

Citi overhauled its two major trading floors in London quite recently and is expected to retain them in the new design.

Overall, the bank has 5,500 employees in London and has a presence in 20 of the 27 European Union countries beyond the UK. It has only moved between 50 to 100 people to cope with the UK’s departure from the EU.

HSBC’s near identical tower in Canary Wharf was sold by the bank to Metrovacesa for £1bn in 2007, only to be bought back at a lower price the following year.

The building at 8 Canada Square was then sold on to a South Korean pension fund for £772.5m in 2009. The Qatar Investment Authority was reported to have spent £1.1bn buying it at the end of 2014.

JP Morgan owns its headquarters in Canary Wharf at 25 Bank Street. It spent £495m to acquire the building in 2012. It had previously been occupied by Lehman Brothers. (Reporting by Christopher Spink)

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