London’s Canary Wharf Attracts More Office Tenants
UNITED KINGDOM – Office space in London, particularly in Canary Wharf, is recovering from the doldrums caused by the COVID-19 pandemic, reported Money Week on Monday afternoon (28 February, SGT).
As a matter of fact, more tenants are moving in Canary Wharf, an integrated development with about one million sq ft of commercial space.
Societe Generale came in 2020 and the European Bank for Reconstruction and Development (EBRD) will do so this year, “plus half a dozen smaller tenants in the last year”, revealed Howard Dawber, Managing Director of strategy at Canary Wharf Group (CWG), which owns the mega development.
American banking behemoth Citigroup is investing £100 million to refurbish the 200-metre tower it acquired in Canary Wharf for £1.2 billion in 2019. That building will be used as its headquarters for Europe, Middle East, and Africa (EMEA).
Aside from that, CWG is adding 5 million sq ft of new commercial space to its existing 21 million sq ft. This mainly consists of smaller buildings with “state-of-the-art” office space of 100,000 sq ft to 200,000 sq ft, in a bid to compete with the More London project close to Tower Bridge. This kind of commercial space is anticipated to entice smaller occupiers, and includes specialised buildings intended for tech firms and those from the life-sciences sectors.
However, not all of London’s office properties are thriving. While there is good demand for new or refurbished, flexible space that is well located and has good amenities, office rents of small, poorly located, outdated tertiary commercial space have declined. Although the take-up for tertiary space could pick up as central London returns to normalcy, it’s not advisable to invest in such commercial properties.
CWG, which is 50:50 owned by Qatar’s sovereign wealth fund and Canadian-listed Brookfield Asset Management, has also shifted outside of its core area in recent years. It developed the Walkie-Talkie building in the city and the former HQ of Shell on the South Bank, which was once voted as the ugliest building in all of London.