Canary Wharf faces major setback as Nomura plans move to City

Nomura, the Japanese broking firm which bought Lehman Brothers' UK operations, is in exclusive talks to move from Canary Wharf back to the City of London.

It is said to be in talks to take on Watermark Place, a new office building on the banks of the Thames near Cannon Street station.

The 11-storey office block is owned by Oxford Properties, which is a joint venture between a Canadian pension fund and Swiss bank UBS.

The deal would be the largest property transaction in the Square Mile for almost five years and would be viewed as a major blow to Canary Wharf. Nomura has been growing rapidly with the takeover of Lehman Brothers and recent extra recruitment boosting its staff from 1500 to more than 4000 in less than a year.

Most of its staff work in the old Lehman building. Watermark Place has space for about 5000 people.

The Japanese firm, which used to be next to St Paul's Cathedral, wants to return to the City because it believes it will be better for clients and staff. Chief executive Kenichi Watanabe is keen for the bank to be seen as a traditional City institution.

Watermark Place includes three large trading floors and an outdoor roof terrace overlooking the river.