(Bloomberg) -- When Martin Williams worked in the Canary Wharf outpost of steak chain Gaucho, it wasn’t uncommon for a large table of deal-makers to rack up a lunch bill of £5,000 ($6,016) or more.
That was before the financial crisis, which led to a sharp cut in corporate entertainment budgets. Today, the lunch service is often tables of two spending £25 for a quick starter and main course.
“The whole of the estate used to be quite male dominated and City-focused,” said Williams, who left to start his own chain before returning as chief executive of a combined group. “Now you’ve got more diverse businesses working there — tech, design companies. It’s become younger and more female.”
There’s another big difference: Saturdays have turned into one of Gaucho’s busiest days.
Attracting tourists, families and shoppers to Canary Wharf in the evenings and weekends has become a mission to transform the City’s second financial district into a 24-hour village. Rooftop bars, parks and even a school have been built across the campus, with more blocks of high-rise flats springing up.
“We’ve created a residential community that didn’t exist four years ago,” said Shobi Khan, Canary Wharf Group Plc’s chief executive.
Read More: London’s Canary Wharf Is Looking at a New Future Beyond Banks
Reinventing Canary Wharf is a matter of survival. During Covid, it was forced to negotiate a covenant waiver on its retail and construction loans. Brookfield Property Partners LP, which owns Canary Wharf Group, lodged a quarterly filing in September which wrote-down its stake in the company by $231 million.
The Square Mile has been winning leases even with its higher rents. Clifford Chance LLP, the Magic Circle law firm which moved its headquarters to Canary Wharf in 2003, is swapping the docklands for the City when its lease expires in 2028.
Last month, HSBC Holdings Plc hired Cushman Wakefield Plc to review its options, after the bank’s chief operating officer John Hinshaw told staff last year that he was undertaking a review of the “best future location in London for our global headquarters.” Deutsche Bank AG looked closely at the Wharf but decided to stay in the City.
Origins
Canary Wharf, the creation of Canadian property tycoon Paul Reichmann, began 35 years ago. Then-prime minister Margaret Thatcher wanted to transform the dilapidated area into a collection of towers that would allow London to threaten New York as a financial center.
In 1990, in the face of bitter opposition from locals, the first skyscraper, One Canada Square, rose out of the docks. At 244 meters, it was Britain’s tallest building for two decades until the Shard was built in 2010.
The site’s first tenant, State Street, arrived in 1991 and Morgan Stanley, HSBC and Citigroup followed. However, Canary Wharf went bankrupt in the 1992 property crash with Reichmann managing to buy back the site with the help of investors. The company was listed on the London Stock Exchange in 1999. In 2015, it was taken private.
After emerging from the pandemic, when its more than 800,000 daily commuters slowed to a trickle, Canary Wharf is spreading east. Bolstered by the introduction of the Elizabeth Line rail service last year, Khan is now seeking to promote the Wharf as a 24-hour destination.
The early signs show promise. Entertainments venue group Broadwick Live, the owner of the Printworks in Surrey Quays, is moving into the East Wintergarden conference center and wants to open a larger venue.
Brad Thompson, Broadwick’s group managing director, has swapped his flat in London’s trendy Hackney for a rented apartment in Canary Wharf’s new One Park Drive tower — where two bedroom flats are listed for about £1.2 million. “Prior to living here, you thought it must be a bit of a ghost town at the weekend,” said Thompson, 42.
Life Sciences
Financial firms still account for 55% of Canary Wharf’s rental income but that is gradually falling, as entertainment, tech firms and residential increase. Khan is also pushing into life sciences, with ambitions of creating a cluster.
However, that dream requires pharmaceutical companies, university spin-outs and academics to choose Canary Wharf over two of the world’s most prestigious universities — Cambridge and Oxford.
It also pits Canary Wharf against King’s Cross, with its direct train line to Cambridge, and White City, which is relatively close to Imperial College.
In December, Canary Wharf Group and Kadans Science Partner BV, a real estate developer, announced a joint venture to build a 23-storey building to house life sciences companies and laboratory space.
“Scientists are people too, and guess what — they like nice restaurants, nice bars, and nice homes, all the same things that people who work at Facebook or Google like,” said James Sheppard, a managing director at Kadans Science Partner.
Sheppard said there’d been early interest from US companies. And Genomics England, which is owned by the UK government, has moved in. Chris Wigley, CEO of Genomics England, said: “In Oxford, Cambridge it’s really difficult to get lab space, or frankly any space. So having the ability to grow here is really important.”
Still, it’s too early to say whether Canary Wharf will compete with more established rivals. It needs a large research institution to anchor the development — yet to be secured. And the building won’t open for another four years.
Shopping
Khan said it was going to be a “long winter,” with further lay-offs at big companies hurting demand for office space. But the early efforts to diversify are paying off. Figures from Transport for London showed that a record number of people traveled into Canary Wharf in November and December. It also showed that midweek travel was back to pre-pandemic levels, while evening visitors between 4 p.m. and 10 p.m. were 50% higher than the same week in 2019.
According to Khan, fewer than 3% of Canary Wharf’s shops are vacant. The area’s branch of upmarket supermarket Waitrose “is the number one grocery store in the entire country, in terms of sales,” he said proudly. Canary Wharf may be changing, but some things stay the same.
©2023 Bloomberg L.P.
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