Clouds gather over Canary Wharf

Massimo suburbanstudio at
Sat Nov 15 00:17:22 GMT 2008

On an simple physical term, an area of 2m sq ft is equal to something
like, 2600 homes , 70 sqm each...


Clouds gather over Canary Wharf

By Daniel Thomas and Chris Hughes in London

Canary Wharf is facing the threat of rapidly emptying office blocks
as big corporate tenants review their property needs after the wave
of bank mergers triggered by the financial crisis.

Nearly 2m sq ft of office space in the Docklands financial centre
– or more than 10 per cent of the district – is in danger of being
deserted as demand for new space falls across London.

“It could become pretty lonely in some buildings,” one leading property 
agent said.
“It is inevitable that we will see more empty buildings as Canary Wharf 
is the area
that is most exposed to the financial sector.”

The biggest question mark hangs over the fate of the former Lehman 
Brothers headquarters.
The recently refurbished European headquarters of Nomura, which acquired 
parts of Lehman
after the bank collapsed in September, are near St Paul’s Cathedral in 
the City, London’s
traditional financial centre. Lehman’s Canary Wharf offices are three 
times as big as those of Nomura.

Sadeq Sayeed, executive vice-chairman of Nomura International, gave a 
strong hint that Lehman
would make the move when he quipped at his first staff meeting after the 
acquisition that it had taken
him much longer to get to work at Canary Wharf that morning than his 
usual commute to St Paul’s.

Bank of America, which is based in Canary Wharf, is also considering a 
move to the City headquarters of Merrill Lynch, which it took over in 

In addition to these moves, there is a risk of so-called “grey space” at 
Canary Wharf, as occupiers sub-let unneeded space.

While not an immediate problem for Canary Wharf’s owners, this skews 
vacancy levels – currently less than 4 per cent – and drags down 
property values.
Citigroup, one of Canary Wharf’s tenants, is looking to sub-let more 
than 100,000 sq ft of space.

Deals are still being struck at Canary Wharf, however, and talks 
continue to rehouse JPMorgan in a new skyscraper on the estate.
Canary Wharf declined to comment.

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