Citigroup is footing the £1bn bill for the Canary Wharf tower development

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Citigroup is set to spend more than £1bn refurbishing its Canary Wharf tower, a sign of the huge costs involved in refurbishing old floors as banks try to push their staff back into the office.

Bank of America began renovating the 42-story building at 25 Canada Square in 2022, when it was reported that the cost may be more £100mn.

People close to the project have said that the number has not been realistic, however, and that the estimated cost has reached more than £1bn. A person familiar with the project said the £100mn figure was inaccurate and had not been publicly confirmed by Citi.

The cost of refurbishing the nearly 25-year-old skyscraper will be close to the £1.2bn Citi paid to buy the tower in 2019, as part of a strategy to own rather than rent its office space.

The purchase price of the project, which is due to be completed in 2026, marks a major investment by Citi to improve the quality of its London operations as a bank. reluctant workers back to the office.

But it also comes as Citi is being transformed under chief executive Jane Fraser, who is under pressure to cut costs and increase the bank’s profits.

The price also highlights the huge cost of breathing in the elderly at a time when many towers, Canary Wharf and other centers around the world, need major upgrades.

Canary Wharf Group (CWG), the owner of the port, plans to radical renewal of the HSBC tower when the bank leaves in 2027, on behalf of the building’s owner, the Qatar Investment Authority.

The tower occupied by Clifford Chance could also be in line for renewal after the law firm’s lease expires in 2028.

Citi’s big plans for its project include digging up the ground and adding new stairs to create multi-level “villages” for different groups.

At the center of the tower will be a triple-height, multi-garden “winter garden” in the customer’s delight at the top. There will also be a lot of work to update the mechanical systems and the facade.

Citi considered demolishing and rebuilding the tower before starting the project, but decided to go ahead with the renovation because using the existing building was sustainable, even though it was very expensive.

The sale of the tower designed by César Pelli, built for the bank by Canary Wharf, was one of the most expensive property sales ever in the UK. CWG has marked the value of its office work by 26 percent since 2019, according to company reports.

Morgan Stanley is also about to start the renovation of its Canary Wharf building, but will receive £150mn in costs from CWG as part of a deal to extend its ten-year lease.

JPMorgan Tower, which it acquired after the collapse of Lehman Brothers, is also in line for renovation.

Citi declined to comment.