Nomura Office Relocation to Invoke Insurance Payout for Canary Wharf
The 350,000 square feet office space at Canary Wharf, which was formerly the Lehman Brothers headquarters, is currently occupied by Nomura. The Japanese company had bought the European properties of the investment bank when it had collapsed at the onset of recession.
Nomura, whose new office space would be close to 550,000 sq ft of high spec office interiors at the Watermark Place development, which is located in the City, has already signed an agreement in which the moving terms have been finalized. This office relocation, which will bring them closer to their clientele, will also help Nomura in its attempt to be recognized as one of the major players in the financial world.
Canary Wharf will invoke an insurance payment of $224m due to Nomura’s exit. In this way, their rental losses will be covered in the wake of the departure. Canary wharf, because of this insurance, has up to five years to find a new tenant. If they fail, they will have to start incurring the loss of regular rental income.
The property could face a decline in rental rates if it is unable to find a tenant for some time - a scenario that could harm its long term prospects significantly.
The insurance payout will assuage fears that Canary Wharf will face heavy losses with Nomura’s exit, but it does not mean that the problems will disappear.