Like the doomed canary of coalmine fame, London’s second financial district had fallen off its perch. In the tough post-pandemic recovery years of the early 2020s, the gleaming towers of Canary Wharf stood like abandoned steel and glass mausoleums as a succession of big-name occupiers announced they were to quit Docklands for the City.
First, in 2022, Magic Circle law firm Clifford Chance said the new era of hybrid working meant it did not need the acres of office space it leased for its increasingly working-from-home solicitors at the 10 Upper Bank Street skyscraper, and would move to smaller premises in the City.
Then the following year, in an even more symbolically damaging move, HSBC said it would shift its global headquarters out of the 45-storey skyscraper at 8 Canada Square where its name was visible for miles around. Others moving out and decamping to the City included ratings agency Moody’s and US bank State Street.
In Monty Python terms, London’s biggest regeneration project, a 1980s Thatcherite dream of a financial services citadel rising from the ashes of derelict docklands, was if not yet stone dead, certainly pining for the fjords.
As recently as last September, the finances of a project that had already gone bust once — previous owners Olympia & York collapsed in 1992 — looked on shaky foundations when Canary Wharf Group bonds were downgraded deep into junk territory.
But what a difference a year makes. Last week data from analysts CoStar showed just how far Canary Wharf has come in a remarkable revival that has slipped largely under the radar.
Businesses are returning to Canary Wharf in their droves
Tenants have flocked back to a district that once looked in terminal decline. This year is set to be the strongest for office leasing for a decade, with 800,000 sq ft forecast to be signed by the end of the year. The vacancy rate in CWG office space is now down to just six per cent.
An extraordinary about-turn by HSBC sums up what has happened. In September, Britain’s biggest bank revealed it had overestimated the work-from-home phenomenon and needed more space after all — back in Canary Wharf.
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It has now signed a new 15-year lease for 210,000 sq ft over 11 storeys at 40 Bank Street after foreseeing a chronic shortage of desk space at its new downsized headquarters near St Paul’s, which is due to open in 2027. Other recent headline lettings include Visa’s reported negotiations to move its European headquarters from Paddington to Canary Wharf and Spanish bank BBVA’s decision to expand its space to 60,000 sq ft and extend its lease at One Canada Square until 2035.
Perhaps the most satisfying new leasing was the decision by fintech giant Revolut to base its global headquarters in the YY London. The company took 113,000 sq ft over four floors on a 10-year lease with staff moving in last May.
It was a big move for a company that started out a decade ago with two hot desks for founders Nikolay Storonsky and Vlad Yatsenko at the Level39 tech incubator high up the One Canada Square skyscraper. Perhaps just as importantly, blue-chip Canary Wharf occupiers including Barclays, Citibank, Fitch, JP Morgan and Morgan Stanley have all decided to stay put.
We may never know what deals were done to persuade them to stick around. But Canary Wharf Group’s shareholders, Canadian investor Brookfield Property Partners and the Qatar Investment Authority, which bought the business for £2.6 billion in 2015, have deep pockets, take a long-term view and can afford to take the hit.
Patrick Scanlon, senior director of market analytics at CoStar, said: “The availability of relatively affordable, very high-quality office stock has led to an upswing of interest from occupiers across London. There have been significant deals with incumbent tenants, either renewing their leases or taking on overflow space. Additionally, there have been new entrants relocating to Canary Wharf from the City, Southbank and West End.”
So, for now, the flight out of Canary Wharf has stopped. And at the same time footfall through the 128-acre estate has surged. It reached 72 million last year, having fallen to 20 million during the Covid years of 2020 and 2021. This year’s footfall is tracking around five to six per cent up, suggesting about 76 million will pass through in 2025, well above the 49 million recorded in 2019 immediately before the pandemic. Even on a Friday, footfall is only about 15 to 18 per cent down on 2019 levels. One reason for this is Canary Wharf’s transformation from windswept and poorly connected office canyon district to a retail, eating out and residential destination that 3,500 people call home, served by the Elizabeth Line, Jubilee Line and soon-to-be modernised Docklands Light Railway.
CWG’s chief executive, Shobi Khan, bridles slightly at the suggestion that this reinvention was a hurried response to the pandemic. He tells the Standard: “Really it’s been an evolution, it’s a misconception that we did all this stuff because of the pandemic. The residential started in 2014, it was always planned to be a residential neighbourhood. Covid put us on a lower growth trajectory but now we’re back to higher growth.”
Canary Wharf has changed beyond all recognition
As a timely example of how Canary Wharf has changed beyond all recognition, he points to the official launch this week of the Troubadour Theatre, which opened with the world premiere of the stage adaptation of The Hunger Games.
Khan also highlights the four new hotels at Canary Wharf and the six-lane, 50-metre floating lido coming to Eden Dock next year.
There has also been a huge step-up in the quality of retail and dining options. There are now about 300 shops, restaurants and bars, with 125,000 sq ft leased to independent business and restaurants.
Last year, Canary Wharf was even named the UK’s number-one retail destination by analysts Green Street, after attracting lettings from brands such as Diptyque and Office Shoes. New restaurants include modern Turkish concept Nora, Roe and Lina Stores.
Back in the early days of 2008, Canary Wharf was almost entirely dedicated to office space, with just four per cent retail. Today offices make up 83 per cent and that will come down to 75 per cent by 2028.
According to Khan, that proportion will continue to fall as Canary Wharf becomes a fully fledged community and its residential population grows, perhaps one day passing the 11,600 who live in its great rival, the City.
The skyscrapers of Docklands will never be everybody’s ideal of community but its reinvention is a remarkable post-pandemic success story for London. For now at least the Canary has risen from the ashes of Covid and is flying high again.
