The Bank of New York Mellon Corporation (BNY Mellon) have decided to postpone their London HQ relocation plans, and will instead extend the lease at their current office space, as they opt for a softer commitment in the run-up to Brexit.
For the past year, the US bank has been drawing up a shortlist of possible new flagship London buildings, including a property in London’s eastern financial district of Canary Wharf, as preparation for a potential move in the early 2020s.
Lease Extension
However, BNY Mellon are now in discussions with landlords at Blackstone, to see if they can extend their current lease beyond its 2023 expiration date at 160 Queen Victoria Street. If they were granted a lease extension, this would not only represent a shorter deal, but a potentially less expensive commitment than a deal to lease a new HQ building. This would also incur relocation costs.
A spokesperson for BNY Mellon explained that the uncertainty surrounding Brexit had been an influencing factor in their decision towards a lease extension, although they did highlight that this was not the only reason.
“We have been exploring our options and having conversations regarding our office requirements in London for a while, but we are not in a position to confirm any details at this time.”
In addition to the City building, BNY Mellon have a 150,000 square foot site in the One Canada Square tower in Canary Wharf. Here, the lease expires in 2022, after it was extended four years ago. The New York-based lenders have been seeking a new London base of around 300,000 square foot.
Banks Brexit Uncertainty
Last year, research conducted by the Financial Times found that the UK’s biggest international banks were set to move around 4,600 jobs from London, in preparation for Brexit. That’s 6% of the total workforce within the City.
BNY Mellon explained last year that they expected to create 20 extra market related jobs in continental Europe as a result of Brexit, since they already have a fully licensed bank in Brussels, from which it can sell its services around the EU.
Following the UK’s departure from the EU, if there is no “implementation period”, The Bank of England warned back in October that: “it is not possible for companies on their own to mitigate fully the risks of disruption to cross-border financial services”.
Some overseas banks have committed to consolidate staff in new London buildings despite the uncertainties.
Last year, Deutsche Bank committed to take at least 469,000 square foot in a new London development due to be completed in 2021, bringing together staff from several London locations. It will, however, transfer hundreds of billions of assets to Frankfurt.
Goldman Sachs are building a new 826,000 square foot HQ, on which it made a sale-and-leaseback deal with Korea’s National Pension Service in August, taking out a 25 year lease.
Leave A Comment