Citigroup will undertake a three-year overhaul of its London skyscraper costing more than £100m, in what the bank has described as a vote of confidence in the City of London after Brexit and the future of the office post-pandemic.
The bank on Wednesday told its 9,000 London staff about the project, which will require them to relocate until 2025 while the work is completed. The Wall Street lender bought the 200-metre high, 42-storey tower at 25 Canada Square in Canary Wharf for £1.2bn in 2019 as part of a global strategy to own, not rent, its major office buildings to save costs.
“London’s position in Citi’s global framework and strategy is undiminished and is actually growing,” said David Livingstone, the bank’s Europe, Middle East and Africa head. “It is a major project and a real commitment to the city and our staff. It will sort us out for the next 25 years . . . A tower in London is a valuable physical asset.”
Reflecting its more international footprint than many Wall Street lenders, many of Citi’s top global executives sit in London, along with about 2,000 traders. Paco Ybarra, head of the division that houses the investment and transaction banking operations, is based in the UK as are Manolo Falco and Andrew Morton, co-head of investment banking and co-head of markets respectively.
“London remains perfectly positioned from a timezone point of view, in addition to the professional services sector and rule of law,” he added. “All of those things are still very conducive to locating our regional headquarters here.”
Citi said it had added more than 1,000 jobs in London since Brexit, taking the total to 9,000. It also hired 1,000 people in Belfast last year, making it the biggest bank in Northern Ireland with 3,200 employees.
By contrast, it has created only a few hundred new roles in Europe since Brexit, only 60 of which were staff relocated from London.
However, more staff could move pending the results of the European Central Bank’s “desk-mapping” exercise, which will exert more pressure on lenders to relocate key staff inside the EU.
Citi’s announcement is a boon for Canary Wharf. Faced with the twin challenges of Brexit and Covid-19 — which left it almost deserted for months on end — the east London office district is attempting a reinvention.
Chief executive Shobi Khan envisages a more liveable area that will draw people other than commuters but the transition will take years and the area is still reliant on the 120,000 financial services employees who used to commute daily.
Livingstone said the refurbishment plans were under way before the pandemic struck in March 2020 but that the experience had re-emphasised the need for a more flexible design.
“As our CEO has confirmed we are an office-based organisation, we want all our people in the majority of the time, at least three days a week,” Livingstone said. The new flexibility of two days working elsewhere is “a dividend for our people”.
During work on the 1.2m square-foot skyscraper, staff will be relocated to Citi’s adjoining 18-floor, 33 Canada Square office as well as temporary space leased elsewhere in Canary Wharf.
Citi will not renew the lease at 33 Canada Square when it expires in five years, consolidating all staff in the main tower.
Livingstone said the bank had considered demolishing and rebuilding the structure but decided to refurbish instead partly because it would avoid the release of more than 100,000 tonnes of embodied carbon — the CO2 emitted to produce a building — which the bank estimates is the equivalent of running 21,739 family cars for a year.
It reflects an industry-wide push to rein in emissions from buildings as workplaces come under increasing scrutiny. Citi has pledged to reach “net zero” emissions by 2030 and claims that under normal operations the building will emit zero carbon.
The renovation will also reduce water consumption by a fifth and install a new “greywater” recycling system, which reuses water from basins and showers in toilets and urinals.