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Citigroup is on track to spend more than £1bn on repairs to its Canary Wharf tower, an indication of the huge costs involved in modernizing aging skyscrapers at a time when banks are trying to get their staff back to their offices.
The US bank launched the renovation of the 42-storey building at 25 Canada Square in 2022, when it was reported that… The cost will be more than 100 million pounds sterling.
However, people close to the project said that this figure was completely unrealistic, and that the expected costs amounted to more than £1 billion. Another person familiar with the project said the £100 million figure was inaccurate and had not been publicly confirmed by Citibank.
The cost of renovating the nearly 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 its office space rather than rent it.
The price tag for the project, due for completion in 2026, represents a significant investment by City in improving the quality of London's workspace as banks. Flattery to reluctant workers Back to the offices.
But it also comes as City undergoes a turnaround under CEO Jane Fraser, who is under pressure to cut expenses and boost the bank's profitability.
The price also highlights the high costs of breathing life into old skyscrapers at a time when many tower blocks, both in Canary Wharf and other centers around the world, need major repairs.
Canary Wharf Group (CWG), the owner of the wharf lands, plans to create… Radical renewal For the HSBC Tower when the bank leaves in 2027, on behalf of the building's owner, the Qatar Investment Authority.
The tower occupied by Clifford Chance could also be up for renovation after the law firm's lease expires in 2028.
Citi's ambitious designs for the project include hacking away at floors and adding new stairs to create multi-level “villages” for different teams.
The center of the tower will contain a triple-height “winter garden”, with more gardens in the client’s entertainment space above. There will also be extensive work to modernize the mechanical and interface systems.
Citi considered demolishing the tower and rebuilding it before launching the project, but decided to go ahead with the renovation because reusing the existing structure was more sustainable, albeit much more expensive.
The purchase of the Cesare Pelli-designed tower, which was built for the bank by Canary Wharf, was one of the most expensive property sales ever in the UK. CWG has written down the value of its office portfolio by 26 percent since 2019, the company reports.
Morgan Stanley is also about to embark on a refurbishment of the Canary Wharf building, but will receive a £150m charge for the cost from CWG as part of a ten-year lease extension deal.
The JPMorgan Tower, which it took over after the collapse of Lehman Brothers, is also in the process of being renovated.
City declined to comment.
