Credit Agricole SA has chosen a Canary Wharf office building currently occupied by Morgan Stanley as its preferred option for a new London headquarters, according to two people with knowledge of the matter.
The French bank is negotiating a lease for about 150,000 square feet (14,000 square meters) at 25 Cabot Square with U.S. real estate firm Hines Global REIT Inc., which owns the building, the people said, asking not to be named because the information is private.
The deal hasn’t been finalized and Credit Agricole could revert to its other short-listed option of subleasing space from Citigroup Inc. at 25 Canada Square in Canary Wharf, the people said. Spokesmen for Credit Agricole, Hines, Morgan Stanley and Citigroup declined to comment.
Banks are seeking to cut costs by moving to cheaper locations and using buildings more efficiently, broker CBRE Group Inc. said in a report last week. Credit Agricole is currently based in the City of London district where rents for the best space are about 70 pounds ($101) per square foot, compared with 39 pounds per square foot in Canary Wharf, according to broker Knight Frank LLP.
Morgan Stanley sold 25 Cabot Square to Hines for 225 million pounds in 2014 with an agreement to lease back half the 450,000 square feet of space for 15 years and half for three years with an option to extend, according to two people with knowledge of the matter. The U.S. bank will remain in part of the building, the people said.
The building is part of a $5.5 billion portfolio of property currently being offered for sale by Hines Global REIT, a person with knowledge of the matter said in May.