US investment bank JPMorgan has ditched plans to establish its European headquarters in the City of London and has opted to move to the Canary Wharf financial district instead.
JPMorgan entered into exclusive talks with property developer Hammerson in May last year over the construction of a 90,000 square metre office on the site of the St Alphage House building, which is owned by the City of London Corporation.
The new building was expected to consolidate JPMorgan's investment banking operations in one location and house 5200 investment bankers. The facility was to feature four trading floors, each measuring 72,000 square feet - making them the largest in London.
But in a statement today, Hammerson says it has been advised that the US bank is "terminating discussions" on the development.
"It has become clear that the building that JPMorgan is looking to build and occupy cannot be accommodated on the St Alphage site," says the statement.
Canary Wharf Group says it has now entered into exclusive discussions and signed a heads of terms with the bank about building the headquarters.
The developer says the proposed site at Canary Riverside South will allow JPMorgan to consolidate operations from several existing buildings in London and will provide accommodation for future growth.
The decision to opt for a Canary Wharf site will be a bitter blow for the Square Mile, London's traditional financial centre. The original move to opt for the City was seen as a surprising victory over Canary Wharf, which houses many investment banks including Citigroup, Barclays, Lehman Brothers and Morgan Stanley.