Barclays Drops Nearly $1B to Buy Its London HQ

British lender Barclays is the latest joining the local movement that prioritizes office ownership over leasing.

The financial institution agreed to buy its global headquarters at One Churchill Place in London’s Canary Wharf for £750 million ($993 million), Bloomberg reported. Canary Wharf Group, a joint venture of Brookfield and Qatar Investment Authority, sold the property’s control through a 999-year ground lease.

The deal for the 1-million-square-foot property breaks down to $993 per square foot. It cements Barclays’ ownership of a space it’s occupied for two decades and was set to continue to lease through 2039.

Barclays chief executive officer CS Venkatakrishnan said in a statement that the purchase would provide “long-term certainty” for the company, as well as increased flexibility for its London operations.

More major financial institutions are buying into the idea of owning their London office holdings, a shift partially pushed by accounting rules that force companies to recognize the entire liability of long term rental obligations on their balance sheets.

Last year, JPMorgan Chase was reported to be considering building London’s largest office building, spanning more than 2 million square feet, at its Riverside South site in Canary Wharf, designed by Foster + Partners. This proposal is not finalized, as JPMorgan is also exploring options like refurbishing its 25 Bank Street office or relocating elsewhere in London.

Blackstone is considering selling its Cargo office building at 25 North Colonnade, also in Canary Wharf, having previously attempted a sale two years ago. The property was purchased by Blackstone in 2014 for approximately $220 million (£165 million) and subsequently upgraded with a £100 million investment.

It was expected to be the first significant transaction of an income-producing office building in Canary Wharf since 2021, though Barclays appeared to beat it to the punch.

Meanwhile, Barclays is planning a renovation of its Times Square headquarters at 745 Seventh Avenue, where construction is set to conclude in 2030.

The project is expected to cost at least $1 billion and will involve updating trading floors, technology and adding various amenities for the 12,000 staffers.

— Holden Walter-Warner