Citigroup is close to signing a €100 million deal to buy a new office site in the heart of Dublin in a significant boost to the scale of its European headquarters as banks beef up their presence across the EU following Brexit.
The US bank, which this year announced it would hire 300 additional staff in Ireland for roles in risk, audit, finance, technology and operations, has been shopping for a suitable site after it outgrew its office and put it up for sale six months ago.
It is finalising the deal for a 300,000sq ft office space in the Dublin docklands, home to the headquarters of tech companies including Google, Amazon and Meta, according to several people familiar with the matter.
The new office is expected to cost about another €200 million on top of the purchase price of the land, real estate sources say.
The deal could close as soon as this month, said the sources. The site is almost a third larger than Citi’s 230,000sq ft Dublin site. “This process is still ongoing and we have no updates at this time,” Citi said in a statement.
Two people with knowledge of the bank’s plans for the Irish business said the need for a larger office in Dublin was due to plans for organic growth of the business, not relocations from London. Ireland’s commercial property market is recovering strongly, despite the State’s high costs.
Since Brexit, global banks have bolstered their operations in Paris, Frankfurt, Amsterdam and Dublin, shifting hundreds of billions of dollars in assets from London. About 7,000 jobs have been relocated from London to the EU, despite initial predictions of tens of thousands of moves.
However, the longer-term hit to London will be the hires made in locations other than the UK capital.
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Citi, which has had a presence in Ireland since 1965, employs more than 2,500 people in the State and made Dublin its European headquarters in 2016 in the run-up to Brexit. It oversees operations in 22 countries from the Irish capital.
Citi recently narrowed its search down to the last big undeveloped docklands site, jointly owned by Ireland’s Ronan Group and Fortress Investment Group of the US.
Ronan Group, which has built large offices for companies including Salesforce and Facebook, declined to comment.
According to industry sources, Citi also has the right of first refusal on a further 130,000sq ft on the same site should it decide to expand. It put its existing 230,000sq ft Dublin office up for sale for €120 million.
Wall Street and City of London investment banks are under pressure from the European Central Bank to increase the staff and capital they commit to financial markets in the euro zone rather than rely on operations outside the bloc. In May, ECB head of supervision Andrea Enria warned that “empty shell structures... are a very real concern”.
Citi’s decision to boost its office footprint in Dublin is at odds with moves made by other global lenders to reduce office space as more staff work from home. Swiss bank UBS and Société Générale of France have sublet floors in their London headquarters in response to staff taking a more flexible approach to office work.
Citi has bolstered its three main EU hubs in Dublin, Frankfurt and Paris since Britain’s vote to leave the bloc in 2016, but has made clear it intends to maintain a large operation in London.
Citi’s biggest European operations are still in London, where it employs 9,000. The bank is in the process of giving its 42-storey Canary Wharf London headquarters a £100 million upgrade as part of a three-year overhaul of 25 Canada Square. Citi bought the skyscraper for £1.2 billion in 2019 as part of a global strategy to own, not rent, its biggest office buildings to save costs.
Citi will not renew the lease at 33 Canada Square when it expires in five years, consolidating all staff in the main tower.
Separately, Citi’s UK country officer, James Bardrick, told Bloomberg that the bank intended to hire 400 more staff for its Belfast office, which employs 3,700 people and is the city’s largest financial services employer.
— Copyright The Financial Times Limited 2022