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  1. Property
June 29, 2023

Why Canary Wharf faces its toughest challenge yet

Spear's 500 Live: The pandemic has brought long-lasting change to the capital’s property market, say experts

By Will Wainewright

London property still holds immense cachet internationally, but changing working practices since the pandemic have dented areas like Canary Wharf, according to an expert panel.

Flexible working means companies are increasingly attracted to areas in central London that offer nightlife and restaurants as well as office space, notably the West End, said Ed Jackson, head of UK acquisitions in direct real estate at Pictet Alternative Advisors.

Jackson was among the property industry experts on a panel discussion entitled ‘London’s still London’, which was presented in association with Unica Capital. The session was part of the agenda at Spear’s 500 Live, the premier live event for private client professionals, held on 28 June at the Savoy.

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Canary wharf property: Unica Captial's
Michala Chatel, head of investor relations at Unica Capital, described Canary Wharf as a ‘ghost town’ at weekends / Image: Aidan Synnott Photography

[See also: Wardian Canary Wharf: An oasis in the heart of the city]

London still hot property but Canary Wharf braces for biggest test  

HSBC’s decision to vacate its 45-storey docklands tower, its global HQ for two decades, by 2027 was a sign that Canary Wharf has ‘lost some of its lustre,’ said Jackson.

The bank is likely to move into BT’s former headquarters near St Paul’s Cathedral. It comes on the heels of other moves, with law firm Clifford Chance leaving the Wharf for the City.

‘[Canary Wharf] is a ghost town from Friday night to Monday morning,’ said Michala Chatel, head of investor relations at Unica Capital.

More residential development could help the Wharf become livelier at weekends and restore some appeal post-pandemic, Chatel said.

But central districts are seeing much more interest. ‘Central London will always attract and re-attract and get people back in,’ she added.

‘Pockets like [Canary Wharf] will take a very long time to rebound. It is in a complicated position right now,’ said Jackson, whereas areas like the West End, which offer ‘mixed amenity’ are doing incredibly well.

HSBC Canary Wharf
HSBC is leaving its Canary Wharf HQ of 20 years for central London / Image: Getty

[See also: The man who’s changing the face of Canary Wharf]

How London is developing post-pandemic and post-Brexit

Nick Whitten, head of EMEA and UK residential and living research at JLL, said London’s population is now above its pre-Covid level after the temporary pandemic exodus.

Vacancy rates are also down to pre-Covid levels, while Heathrow passenger numbers are higher, demonstrating the city is moving on from the pandemic. But London underground usage is at 85-90 per cent of former levels due to workers spending less time in the office.

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‘London is a unique city, we should be proud of it, but we need to be internationally competitive,’ said John James, managing director, Soho Estates. ‘We have to invest and promote London to make it attractive.’

The panel agreed that Brexit and the pandemic have blighted London’s progress, allowing other financial centres catch up.

James called Covid a blip; ‘but it is a blip which could kill anyone of us.’ More than half (56 per cent) of Soho Estates tenants were hospitality businesses, so it had an outsized impact.

Jackson said international investors see London as a store of wealth and that inward capital flows continue to be strong. But he thinks London property’s peak came before the 2016 referendum on EU membership.

‘Since then we have suffered as a city’ due to highly-skilled blue-collar talent moving overseas, a reduction in trade and gaps in hospitality recruitment, he said.

[See also: Spears 500 Live 2023 – Leading economist Kevin Gardiner slams ‘false narrative’ around UK financial outlook]

London’s unlikely property hotspots: Hendon and Brentford

Jackson identified the key opportunity as residential development, particularly commuter suburbs in north-west London like Hendon. The change of use from industrial to residential presented good investment opportunities.

JLL’s Nick Whitten does not see foresee a UK house price crash despite the rapid rise in interest rates. Seven-tenths of UK property is owned outright without a mortgage and repayments ‘are not rising enough to put people in a position to sell their homes,’ he noted.

Canary Wharf property challenge: Brentford is on the up thanks to its Premier League football club
Brentford is on the up thanks to its Premier League football club / Image: Getty

[See also: Hitting new heights: a tour of Canary Wharf’s One Park Drive]

Whitten added; ‘If you want an outside opportunity, we have seen a lot of interest in car parks… Buying a car park and repurposing it.’ He highlighted opportunities in ‘forgotten areas’ of west London like Brentford. ‘Don’t underestimate the power of the Premier League.’

Threats on the horizon go beyond the gloomy outlook for property in Canary Wharf. ‘We have a fundamental under-supply of housing in London – that is the main threat to the city,’ said Whitten.

‘The debt coming due in 2024 is going rattle the property market,’ added James.

Watch the full session ‘Property: London’s still London’


Spear’s 500 Live 2023 was held at The Savoy in central London. The event was presented in association with Archax, the Charities Aid Foundation, HCA Healthcare UK, Henley & Partners, St. James’s Place Private Clients, and Unica Capital.

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