JP Morgan's Bear buy fuels London real estate fears
LONDON (Reuters) - JP Morgan's (JPM.N) cut-price takeover of rival Bear Stearns BSC.N has thrown open the U.S. bank's London office requirements at a time when tenant demand in Europe's premier financial centre appears vulnerable.
"It's the question we're all asking ourselves," said one leading London property broker, on condition of anonymity.
"Do they (JP Morgan) need a bigger headquarters or a smaller one?" he said.
Job cuts in London's key financial services industry are increasing as the global credit crunch bites.
Lehman Brothers LEH.N last week announced the latest wave of investment bank job cuts, with London seen likely to shoulder some of a planned 5 percent worldwide staff reduction.
Some think tanks predict 10,000 job losses in London in the next year. In terms of office space, that is roughly three times the equivalent of London's landmark "Gherkin".
JP Morgan said last May that it was in talks with the City of London and developer Hammerson (HMSO.L) over a proposed new 1 million square foot European headquarters in London's City financial district.
An agreement has yet to be finalized.
Further east in Canary Wharf -- London's second financial district -- the steel husk of another unfinished tower bears testimony to the plans Bear Stearns had to consolidate its London-based workforce in one building.
JPMorgan is now in line to inherit the 300,000 square foot Canary Wharf development at 5 Churchill Place, which is due to complete in mid-2009.
JP Morgan declined to comment on its plans or whether a decision was imminent.
A second London office broker agent said the Bear Stearns takeover was unlikely to derail JP Morgan's London City office blueprint, because Bear Stearns's unfinished building could yet be sublet to third party.
But for others it may not be that simple.
"There's a lot of work to be done in terms of their portfolio of buildings in London, future headcount, and what that means in terms of future property strategy should they wish to dispose of anything," said a third office broker.
LETTINGS SO FAR Continued...
