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Citigroup is on course to spend more than £1bn refurbishing the Canary Wharf tower, a sign of the huge costs associated with upgrading old skyscrapers as banks try to push their employees back to the office.

The US bank launched the refit of the 42-storey building at 25 Canada Square in 2022, when it was reported that the cost can be more than £100mn.

People close to the project say the figure is unrealistic, however, and that the projected cost has reached more than £1bn. Another person familiar with the project said the £100m figure was inaccurate and had not been publicly confirmed by Citi.

The cost of refitting the nearly 25-year-old skyscraper is 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 price tag for the project, which will be completed in 2026, marks a major investment by Citi to improve the quality of the workspace in London as banks. reluctant workers back to the offices.

But it also comes as Citi undergoes a turnaround under chief executive Jane Fraser, who is under pressure to cut costs and boost the bank’s profits.

The price also highlights the costs of breathing life into aging skyscrapers at a time when many towers, both in Canary Wharf and other centers around the world, need extensive renovations.

Canary Wharf Group (CWG), the owner of the docklands, is planning a radical change of the HSBC tower when the bank leaves in 2027, for the building’s owner, the Qatar Investment Authority.

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

Citi’s ambitious designs for its project include punching out floors and adding new stairs to create multilevel “villages” for different teams.

The center of the tower features a triple-height “winter garden”, with several client gardens entertaining space above. There is also a lot of work to update the mechanical systems and the facade.

Citi considered demolishing and rebuilding the tower before launching the project, but decided to go ahead with the renovation because reusing the existing structure was more sustainable, albeit more expensive.

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

Morgan Stanley is also about to start a renovation of the Canary Wharf building, but will receive £150 million towards the cost from CWG as part of a deal to extend its lease by a decade.

The JPMorgan tower, which it acquired after the collapse of Lehman Brothers, is also in line to be renovated.

Citi declined to comment.