Citigroup to raise £1bn bill for Canary Wharf Tower upgrade

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Citigroup is set to spend more than £1bn refurbishing its Canary Wharf tower, in a sign of huge costs to upgrade aging skyscrapers as banks try to lure staff back into the office.

In the year In 2022, US Bank began renovating the 42-story building at 25 Canada Square. The cost will be more £100mn

But people close to the project say this figure will never be realized and the proposed cost is in excess of £1bn. Another person familiar with the project said the £100mn figure was incorrect and had not been officially confirmed by the City.

The cost of refurbishing the 25-year-old skyscraper will be close to the £1.2bn City paid to buy the tower in 2019, as part of a strategy to own the office space rather than rent it.

The project’s price tag, due to be completed in 2026, is a major investment by the City of London to improve the quality of its workplace as a bank. cajole reluctant workers Back to the offices.

But Citi is undergoing a turnaround under chief executive Jane Fraser, who is under pressure to cut costs and boost the bank’s profitability.

The price highlights the attention-grabbing cost of breathing life into aging skyscrapers at a time when many towers in Canary Wharf and other centers around the world need major renovations.

Docklands landlord Canary Wharf Group (CWG) is planning. Radical renovation HSBC Tower when the bank vacates the building in 2027 on behalf of the building’s owner, Qatar Investment Authority.

The tower occupied by Clifford Chance could be in line for redevelopment after the law firm’s lease expires in 2028.

Citi’s ambitious designs for the project include punching out floors and adding new levels to create multi-level “villages” for different groups.

The center of the tower features a triple-height “winter garden”, with additional gardens in the client entertaining above. In addition, there will be extensive work to update the mechanical systems and the facade.

Citi had considered knocking down and rebuilding the tower before starting the project, but decided to go ahead with the renovation because it was more sustainable and less expensive to reuse the existing structure.

The Cesar Pelli-designed tower for the bank in Canary Wharf was one of the most expensive property sales in the UK. Since 2019, CWG has reduced the value of its office portfolio by 26 percent, according to company reports.

Morgan Stanley is to begin renovating its Canary Wharf building, but will receive £150mn in CWG costs as part of a deal to extend its lease by ten years.

JPMorgan Tower, which it acquired after the collapse of Lehman Brothers, is also set to be renovated.

CT declined to comment.