Barclays reached an agreement to remain in its Canary Wharf HQ until at least 2039. This is a major boost for London’s Docklands Financial Centre after other high profile tenants chose to move elsewhere.
The bank has extended its lease for its 32-storey One Churchill Place tower, where it has been based since 2005, by five years. The bank will also pay a minimum of £260mn to Canary Wharf Group in a separate agreement to return its tenancy at 10 Cabot Square.
Alastair blackwell, chief operating office at Barclays Execution Services said in a press release: “Canary Wharf has a great atmosphere to work, and our five-year extension of the lease at One Churchill Place attests to this. The deal to leave 10 Cabot Square will result in “a long-term savings for the bank”, Blackwell added.
The actions of the big banks in London’s docklands financial center have been in the spotlight ever since HSBC decided this summer to move from its 42-storey Canary Wharf headquarters in 2027 when their lease ends, instead choosing a smaller City office.
The rise of hybrid work following the Covid-19 epidemic has reshaped what companies expect from their workspace and led some to reduce the space they have available.
Canary Wharf began diversifying its office tenants, beyond the traditional financial services mainstays. This was done before Covid.
According to CoStar data, the office vacancy rate in Canary Wharf is higher than other London districts, at 14 percent, compared to 11 percent in the City, and 6 percent in the West End.
Credit Suisse employees were informed in September of their move to UBS UK’s head office in City after Credit Suisse was acquired by UBS in early this year. The move is expected to be completed by the end the year.
CWG will sublease 10 Cabot Square to allow it to adapt the building. CWG’s chief investment officer, John Mulqueen said, “We will reposition the building to meet increasing demand for high quality sustainable office and Life Science uses as well as provide an opportunity to add other mixed uses like hotel, education, and leisure.”
Barclays has agreed to pay CWG a sum that is not disclosed to release it from its obligations in the 12-storey building, also known as 5, North Colonnade and formerly home to Barclays Investment Bank. The lease runs until 2032. Since it moved staff to One Churchill Place late last year and vacated its building, the bank has been looking for sub-letters.
CWG stated that proceeds from the deal will allow it to pay off PS263.5mn in debt and the rest of the money will be used for “general corporate purpose”.