JP Morgan, the investment bank, has chosen the City of London ahead of Canary Wharf for its new European headquarters building.

The bank has entered into an exclusivity agreement with developer Hammerson and its partner, the City of London Corporation, to bring forward a redevelopment of St Alphage House on London Wall into 1m sq ft (93,000 sq m) of space.

Hammerson will be the development manager for the project. JP Morgan plans to buy the long leasehold interest in the site from the City of London Corporation prior to construction and will own the building.

A preliminary scheme has been drawn up by architect KPF and KKS Strategy is developing interior designs to JP Morgan's exact specification. It is expected that a planning application will be submitted later this year with an anticipated start on site during 2008.

‘'We are delighted with this agreement and once more to be working with Hammerson on a major development project,’ said Michael Snyder, chairman of the policy committee of the City of London Corporation. ‘This new building and JP Morgan's continued presence in the City will reinforce London's pre-eminent position as Europe's leading financial capital.’

Hammerson and the City of London were advised by Knight Frank in their negotiations with JP Morgan. Jones Lang LaSalle has advised the City of London

in its capacity as owner of St Alphage House. JPMorgan was advised by DTZ.