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Barclays has reached a deal to stay in its Canary Wharf headquarters until at least 2039, in a boost to London’s docklands financial centre after other high-profile tenants opted to move elsewhere.
The bank has agreed a five-year lease extension on its 32-storey tower at One Churchill Place, its base since 2005. It will also pay at least £260mn in a separate deal to hand its tenancy of a second building, 10 Cabot Square, back to Canary Wharf Group (CWG).
Alastair Blackwell, chief operating officer at Barclays Execution Services, said in a statement: “Canary Wharf is a fantastic place to work and our five-year lease extension at One Churchill Place is testament to that.” The deal to exit 10 Cabot Square would deliver “a long-term cost saving for the bank”, he added.
The moves of big bank tenants in London’s iconic docklands financial centre have been under the spotlight since HSBC this summer decided to leave its 42-storey headquarters when the lease expires in 2027, after more than two decades in Canary Wharf, in favour of a smaller office in the City.
Office landlords across global cities are facing a daunting transition as the rise of hybrid working following the Covid-19 pandemic reshapes what companies want from their workspace, and leads some to reduce their space.
Canary Wharf has been working to add more residential properties on the estate, boost its food and retail offering and diversify the mix of office tenants beyond its traditional mainstays in financial services since before Covid.
Office vacancy rates in Canary Wharf remain higher than in other London districts at about 14 per cent, compared with 11 per cent in the City and 6 per cent in the West End, according to data from CoStar.
Credit Suisse staff were told in September that they would begin to move from Canary Wharf to UBS’s UK head office in the City following the takeover of Credit Suisse by UBS earlier this year, with the move due to finish by the end of the year.
CWG will take a sublease of 10 Cabot Square, allowing it to work on adapting the building. “We will reposition 10 Cabot Square to meet the increasing demand for high-quality sustainable office and life science uses, as well as providing an opportunity to add mixed uses such as hotel, education and leisure,” said John Mulqueen, chief investment officer at CWG.
Barclays will pay CWG an undisclosed sum to be released from its obligations at the 12-storey building also known as 5 North Colonnade, formerly home to Barclays investment bank. Its lease there runs until 2032. The bank had been seeking sub-letters since it vacated the building late last year, moving staff to One Churchill Place.
CWG said the proceeds of the deal would allow it to repay £263.5mn of debt, with the remainder being used for “general corporate purposes”.
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