JP Morgan to offload 100,000 sq ft in London in second banking sublet since Brexit vote

By James Buckley - Thursday, December 07, 2017 15:22

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JP Morgan is close to agreeing a deal to offload 100,000 sq ft of office space in one of its Canary Wharf developments, in what will be the second banking sublet in Docklands since the EU referendum, CoStar News can reveal.

The US banking giant has gone under offer to sublease the space at 5 Churchill Place, E14 to global brokerage firm BGC Partners, which is to relocate from nearby 1 Churchill Place.

According to CoStar data, there is more than 1m sq ft of office space available on a sublease basis in Docklands, around 830,000 sq ft of which has come to the market from major banks. The deal is the second banking sub-let in Docklands since the Brexit vote after Barclays offloaded 542,000 sq ft of office space at 10 South Colonnade to the Government Property Unit at the end of last year.

However, whilst the timing may seem significant, banks have been subleasing space in Docklands since before the referendum and the space at 5 Churchill Place is legacy Bear Stearns space.

In May 2005 BGC merged with Euro Brokers, prompting a move to the building and growing the business to 600 brokers in the London office.

BGC currently occupies 96,339 sq ft in 1 Churchill Place on levels 18-20 on a lease which expires in July 2019. The firm occupies the space on a sublease from Barclays Bank. Sources close to the deal said the transaction was non-binding and a way from completing.

Earlier this year, Cushman & Wakefield won a pitch to advise US banking giant Citi on a 700,000 sq ft London office requirement, as the bank continues to review its occupational requirements in the capital after the Brexit vote.

Cushman has been tasked with scouring the central London office market for options that could house all of Citi’s 6,000 London-based staff in a vote of confidence in the city as the bank’s long term European headquarters.

Cushman & Wakefield has already been working alongside Knight Frank to sublet 170,000 sq ft of Citi’s office space in its Canary Wharf tower, 25 Canada Square, E14. However, much of this space has been subsequently sub-let to other occupiers so the new requirement will address Citi’s long-term occupational needs in London.

Global banks have been reviewing their office requirements in the UK since the EU referendum although fears of wholesale relocations to other major European cities have lessened since the UK general election and the dwindling possibility of a ‘hard Brexit’.

Citigroup’s EMEA chief, Jim Cowles, told staff over the summer that the bank had decided to base its EU broker dealer - its main trading operation - in Frankfurt, but would scatter some other businesses across European cities.

However, the move would only displace about 150 jobs - just 2.5% of Citi’s total London workforce - across Frankfurt, Amsterdam, Dublin, Luxembourg, Madrid and Paris as a consequence of the UK’s departure from the EU.

JP Morgan declined to comment. BGC did not respond to requests for comment.

jbuckley@costar.co.uk

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