Citigroup is participating in negotiations to acquire the Canary Wharf headquarters in a deal that is reportedly worth £1.2 billion. It is considered as a major show of confidence in the status of the city of London as a global financial centre.
Citi is aiming to secure the acquisition of the 25 Canada Square skyscraper, which it currently leases, from AGC Equity Partners, its owner, in an attempt to double down on London as its Europe, Middle East and Africa (EMEA) headquarters.
Last October, AGC, a private equity company, brought in CBRE, a broker, as an adviser on a £1.2 billion sale of the 42-storey building. It is believed that Citi is in negotiations to purchase the offices, even though the price tag of the deal has not yet been finalised.
The possible deal was first reported by the Financial Times. It is in line with the strategy of the US investment bank of cutting long-term expenses. In 2016, the company bought back its global headquarters in New York for $2 billion (£1.6 billion).
If the sale continues, Citi will not be renewing the lease on its adjoining offices at 33 Canada Square and will relocate all of its 6,000 London employees into the larger tower.
The acquisition of the building, which has served as the EMEA headquarters of the company since 2001, is the most recent sign of the buoyant commercial property market of London.
Last year, the headquarters of both Goldman Sachs and UBS were acquired for more than £1 billion each, as a decline in the pound has driven an increasing demand for office landmarks in Central London.
The deal for the 1.2m square feet tower would also help in easing the fears of a decline in the status of London as an international financial centre after Brexit.
Citi has insisted that London will continue to be its regional headquarters. It also said that it has no plans to significantly reduce its headcount. As a result of Brexit, the company is creating between 150 and 250 new positions within the European Union which will see approximately 60 members of staff transferred from London.
Last month, however, Michael Corbat, the chief executive of the company, warned that the bank may be doing less business in the capital, and said that it had prepared itself for a possible no-deal Brexit.
The said move comes a year after Citi established its so-called innovation lab at the Wework offices in Moorgate.