JP Morgan eyes Lehman tower in potential snub to Government

JP Morgan, the US investment bank, is set to ditch plans to build a new European headquarters at London's Canary Wharf, and instead move into Lehman Brothers' old skyscraper in the Docklands financial district.

Property sources say the bank is ready to abandon its stalled £1.5bn project and relocate into the huge building that was occupied by Lehman, until its spectacular demise two years ago.

The bank agreed a deal with Canary Wharf Group (CWG) in late 2008 for the development of new purpose-built offices, but has still not committed to the project. Sources close to JP Morgan, which employs Tony Blair, the former prime minister, as an adviser, admit that the delay is largely down to senior officials being furious at the UK Government's portrayal of the financial sector as the villain of the recession.

It is understood that JP Morgan is also irritated that the criticism of the banking system has not abated since the Coalition came into office. Last year, sources warned it was considering scrapping the project over tax increases and an orchestrated campaign of "banker-bashing" before the election.

In an email sent to staff last month, the bank said, "we have no immediate plans for any significant changes impacting our presence in the UK". The new plan would allow the bank to move to a new site without being seen to be investing heavily in the UK.

A deal has not yet been signed, and the bank is viewing the move as one of a number of options. A spokesman for CWG, the property company that manages much the district that has rivalled the City as a home for the financial services industry for the last 20 years, declined to comment yesterday. A JP Morgan spokesman also refused to comment on a move, but said: "We have designed options and flexibility into our real estate portfolio."

Property analysts argue that the move would be sensible for both companies. The building, at 25 Bank Street, is purpose built for an investment bank and has, according to experts, impressive facilities. The cost of moving into an existing site would be much lower and would allow the bank to leave its outdated City headquarters on London Wall ahead of schedule.

The building has now been practically vacated by Nomura, the Japanese investment bank that bought up much of what remained of Lehman, and PricewaterhouseCoopers, the administrators to the failed bank. That has left CWG without a tenant in one of the most impressive office complexes in Europe.

A person familiar with the situation said: "There is certainly lots of speculation that JP Morgan will move into the old Lehman building – it is one of the most sophisticated offices around and is crying out for an investment banking tenant. Given its wish to move, JP Morgan must be the front runner."

CWG is thought to be keen to attract a single investment banking tenant. Few other banks big enough to fill the office are considering a move.

The move would also avoid the need for expensive financing. Ironically, financing for new commercial property deals has spiked in the past two years after the collapse of Lehman sent shock waves through the financial system.

A move by JP Morgan would also quell worries about large financial institutions moving abroad to avoid higher tax regimes and greater regulation.

Other European countries have courted London's financial community. After blaming the credit crisis on "freewheeling Anglo-Saxon financiers", French President Nicolas Sarkozy has reportedly begun a charm offensive, offering tax breaks to bankers in the City if they agree to move to Paris.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Sport
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
football
News
Lars Andersen took up archery in his mid thirties
video
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project