London’s Canary Wharf is trying to revamp its image after the banks bailed out

London's Canary Wharf is trying to revamp its image after the banks bailed out

Built some 40 years ago, the gleaming skyscrapers of London’s eastern skyline are the headquarters of the world’s largest banks and home to thousands of their office workers.

But when the working week begins these days, the towers of Canary Wharf fall silent and nearby restaurants empty – a result of the shift to remote working during the pandemic which has caused office markets around the world to collapse and vacancy encouraged rate hikes. As companies adjust to hybrid work, many are reducing their physical footprint.

HSBC became the latest, recently announcing it would leave its long-term headquarters in Canary Wharf at the end of 2026 and move its 8,000 staff to a smaller site in London’s central banking district, about three miles west. Its departure, along with several other companies, has fueled speculation about the future of the district.

The move comes as the owners of the 128-acre financial services centre, Canary Wharf, are looking to reactivate it, adding more accommodation, building laboratories to attract life-sciences groups and hosting cultural shows and activities. are giving His vision, which has become even more important because of the pandemic, is to make the district A place to live, work and play – and not just for bankers,

There is evidence that the effort is bearing fruit. Now, the high-rise buildings are filled with residents who walk their dogs along the district’s waterways. Grassy areas between office towers have been turned into makeshift outdoor cinemas, and swimmers dare the waterways between the glass buildings. Many life-science start-ups and healthcare companies have arrived and traffic at Canary Wharf railway station on weekends in June is almost double what it was before the pandemic.

“It would be naïve to think that Canary Wharf hasn’t been thinking about tackling this issue for a long time,” said Alexander Jan, chief economic adviser at the London Property Alliance, an advisory group for property investors and developers. “They are in a very strong position to be able to adapt.”

Skeptics were once unsure whether the district would be able to survive. A deserted dockyard until the 1980s, when developers and businessmen saw the potential for huge offices, Canary Wharf suffered a commercial real estate crash in the 1990s, with the bankruptcy of its first developers, Olympia and York, in 1992, and the London Fierce competition ensued with the oldest banking district in the U.S. before being bought by investment group Brookfield Property Partners and Qatar’s Sovereign Wealth Fund in 2015.

Canary Wharf Group declined to comment on HSBC’s departure. But the stress it is facing has also affected downtown districts in cities such as Chicago, New York, Houston and San Francisco, as landlords struggle to lease vacant office space. The value of commercial real estate in the United States fell by $506.3 billion over the three years ending in 2022. an estimated,

This has put many landlords in conflict with lenders, who are less willing to lend to owners of office buildings, at a time when rising interest rates have increased the cost of borrowing.

The UK capital is also facing similar difficulties, albeit to a lesser extent. Commercial real estate values ​​have declined in the city, but the office vacancy rate in central London is up 8.4 per cent in the first three months of 2023, according to Real estate subsidiary of French bank BNP ParibasAccording to real estate consultant Knight Frank, and 17.3 percent in Canary Wharf. By comparison, Lower Manhattan had a record 25.6 percent vacancy rate over the same period, according to real estate firm Colliers.

Canary Wharf Group, which owns about 40 per cent of the land and its development, will have to deal with the difficulties ahead. In a May report, credit rating firm Moody’s downgraded Canary Wharf Group’s debt, citing a troubled market, an upcoming £1.4 million debt refinance and pressure to sell assets at a discount.

In response to the downgrade, the group said it was in a “strong financial position”, calling the report a reflection of the wider market and adding that it has net assets of 3.6 billion pounds, or $4.7 billion.

Apart from HSBC, other departures include clifford prospectan international law firm, Who Flexible space requirements have been cited as reasons for relocating to the central London office in 2028. There is the possibility that more could follow – the recent acquisition of Credit Suisse by Swiss banking group UBS, and reports of upcoming layoffs have raised questions over its tenancy at its Canary Wharf tower.

Clifford Chance, UBS and Credit Suisse declined to comment.

But even if more companies leave, analysts say companies from other areas – perhaps which would otherwise be priced out of central London – will eventually take their place.

“I would be surprised if this was the beginning of some kind of end,” said Anthony Travers, professor of public policy at the London School of Economics and Political Science. He noted that many companies saw prestige in maintaining their base in city centres. ,

Others agreed and said the HSBC tower had a cachet that would attract other businesses.

Kanav Gupta, an architect who works in the district, said, “It’s an iconic building on the London skyline – it doesn’t necessarily mean it will go away.” “A demon goes – there is always something that takes its place.”

One of Canary Wharf’s key bets, in a city that is grappling with a short supply of housing, is a 23 Acres Housing District It is within walking distance of skyscrapers where 2,300 residences are under construction, which analysts say could help the developer hedge against the effects of remote working. The group has indicated that making the area more livable is one of its priorities, including adding schools and shops, as well as more greenery and opportunities to connect to the water.

Megan Jones, 28, was the first of 3,400 residents in the district after it opened to residents three years ago. Initially, the district was like a ghost town on weekends, he said. But on a recent Friday, when she went for a walk with her husband and child, the music and noise of the bar caught her by surprise. “It’s definitely a lot busier than before,” she said. “We love it.”

Another bet is to attract businesses in the FLUSH life sciences and health care sector, which have filled vacant office space across North America for lab use. canary wharf official have said His strategy is to make the district one of Europe’s leading centers for the life sciences.

biotech companies, New Companies in the Sector, Government health care agencies have already set up camps. But Canary Wharf’s next milestone will be a 22-storey life-sciences building, expected to be completed in 2024, that will hopefully create a European life-sciences discovery – an ambition shared by British elected officials Jeremy Hunt, Chancellor of the Exchequer,

In some ways, the long-term strategy appears to be working. According to the agency that oversees Transport for London, the number of visitors to Canary Wharf during the most recent June working week matched pre-pandemic levels. In one weekend, traffic jumped 181 percent from pre-pandemic levels.

Traffic has increased significantly with the opening of a new rail service, the Elizabeth Line, which links the district to central London and Heathrow Airport. Shoby Khan, chief executive of Canary Wharf Group, who inserted A £150 million rail line development, the Elizabeth Line has been called a “game-changer”.

David Janczyk, general manager of the Big Easy, a restaurant in Canary Wharf, said that in restaurants, office workers still dominate midday meal service. “The main thing we realized after the pandemic is that Thursday is the new Friday,” he said. That said, the weekend is still busy, with some diners coming in for lunch from outside London.

Nevertheless, Londoners accustomed to seeing Canary Wharf as a white-collar hub are still unwilling to spend more time there than necessary. Jordan Croucher, an IT worker, who said that despite accessible transportation to the rest of the city, he was relocating farther south to seek more parks and be closer to friends. “I’ve tried it, and it’s not for me,” he said.

And Jenna Greenidge, 39, who recently was meeting friends for drinks after work on a Friday, said Canary Wharf is a place to start the night but not end it. “There’s a little bit of a human touch that’s still missing,” he added.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

16 + = 17