Investment banking giant JP Morgan has given a boost to London with a £495 million property deal to house its European headquarters in Canary Wharf.
The group is buying 25 Bank Street in Canary Wharf – the former London base of failed US bank Lehman Brothers – to merge its four investment banking operations spread across the capital.
Its decision marks a welcome commitment to London amid concerns over its attractiveness as a global financial centre ahead of the new banking tax levy and plans for a bonus crackdown.
London mayor Boris Johnson described the news as a “tremendous coup”.
“JP Morgan’s commitment to London will help ensure the capital retains its position as a banking powerhouse which drives the UK economy and attracts the brightest and best stars from the financial world,” he said.
JP Morgan will move its 7,000-8,000 London investment banking employees to the new building in 2012.
The Bank Street building was completed in 2003 and has more than one million square feet of floor space, with technology and infrastructure specifically designed for a financial institution.
Jamie Dimon, chairman and chief executive of JP Morgan, said: “This acquisition is a long-term investment and represents part of our continued commitment to London as one of the world’s most important financial centres.”
It had been thought JP Morgan was planning to move into the Riverside South site in Canary Wharf, which it agreed to buy for £237.9 million in November 2008 and is developing with the Canary Wharf Group.
The bank, which has already paid £68.5 million for the development, confirmed it will continue on the site. It is expected to build the development up to street level before deciding how to take forward its involvement with the project.