Perhaps taking a leaf out of its Asian clients' playbook, Citibank wants to own rather than rent landmark buildings. A decision that might become extremely popular.
Citibank is effecting a change of strategy that could well be inspired by the big bets its Asian clients are putting on real estate – the U.S. bank is launching a bid to buy the marquee assets it has been renting thus far.
As part of the change, the bank is negotiating for the iconic 25 Canada Square in London's Canary Wharf from Middle East-backed private equity group AGC Equity Partners, according to a story in the «Financial Times».
Another Trophy Asset
If it went through, the deal would be an important sentiment boost for real estate in the U.K. that has languished over Brexit uncertainty. It would also mean Citi – one of the largest private banks in Asia – is putting its money where it advises clients to put theirs.
The attempt to acquire its London headquarters follows on from Citi's successful acquisition of another trophy asset – its New York global headquarters in downtown Tribeca for $2 billion in 2016.
Will Clients Follow Suit?
The move was supposedly part of chief executive Michael Corbat's drive to make the bank leaner since it was supposed to save it a significant amount of money in rent.
Will clients follow suit? It is in fact likely that inspiration for Citi's strategy came from its UHNW clients who have been buyers of super-prime commercial real estate for some time now.
Extremely Popular Amongst Asian Clients
Deals syndicated in Asia by Citi as well as rivals such as UBS and Deutsche Bank offering stakes in high-profile commercial property in London and New York have been extremely popular amongst Asian clients.
