Shrinking Barclays Said in Talks to Cut London Office Spaceby
Barclays Plc, the lender cutting about 1,200 investment-bank jobs, is in talks to sublease office space in London’s Canary Wharf financial district to the U.K. government, three people familiar with the talks said.
The bank may lease about 300,000 square feet (27,900 square meters) of space at the 10 South Colonnade building to the government, the people said, asking not to be identified because the talks are private. A spokesman for Barclays, whose main headquarters is at the 1 Churchill Place tower in the same district, declined to comment.
The government regularly evaluates proposals from the market, but doesn’t comment on any commercial negotiations, a spokesman for the Cabinet Office said.
Barclays Chief Executive Officer Jes Staley wants the bank to reduce the amount of real estate it owns and leases this year to generate “tremendous savings,” he said on March 1. Rents for the best space in Canary Wharf were about 45 pounds a square foot at the end of last year, compared with 70 pounds in the City of London financial district, according to data compiled by broker Colliers International Group Inc.
The Barclays talks may become part of a wider by lenders trend in London. “All major investment banks will revisit staffing levels, which may not only dilute demand but lead to consolidation and the release of secondhand space," said Guy Gratham, a research director at Colliers.
Thomson Reuters Corp. agreed to sublease workspace in the Canary Wharf district that is currently occupied by Bank of America Merrill Lynch, the provider of financial data and news said this month. Thomson Reuters competes with Bloomberg LP, the parent of Bloomberg News.
The U.K. plans to save 2 billion pounds over the next 10 years by selling underused historic buildings and moving workers to less expensive office space. The government plans to cut the number of offices it uses in central London from 181 in 2010 to about 20 by 2025.