New HQ plans under threat at JP Morgan
CANARY Wharf is in danger of being left with a yawning gap in its skyline in the years to come if JP Morgan decides to pull its plans to move into new headquarters under construction on the banks of the Thames.
The future of the Riverside South building was cast into doubt again at the weekend as it emerged JP Morgan has held talks with Mayor of London Boris Johnson over its concerns that London is on course to lose its standing as a world-class financial hub.
Fears over a punishing regulatory regime for banks, uncompetitive tax rates for high earners and the impact of the new government’s austerity measures have led the bank once more to question the development of its new HQ, on which above-ground construction has yet to commence.
JP Morgan bought the site from the Canary Wharf Group (CWG) in 2008 for £237m. If it pulls out of the Lord Rogers-designed project at this late stage, CWG will be entitled to payment for work already completed, as well as a contractual £76m break fee.
If JP Morgan chooses to abandon the project entirely, Riverside South is expected to lie dormant until another large tenant appears on the scene, since CWG will not build above ground level on a speculative basis.
JP Morgan has a loose deadline of the end of the year to make a decision. Yet property industry sources insisted the bank had “options” apart from exiting the development entirely. “2008 was a very tumultuous time for the property market and the original deal was built to give a degree of flexibility to both developer and occupier,” one said, adding that the original internal area figure of 1.9m sq ft could yet be substantially downsized.