“It’s not your father’s Canary Wharf.”
Shobi Khan isn’t wrong. In fact, the chief executive of Canary Wharf Group is downplaying the scale and pace of change at the east London estate. By the time some of the most recent initiatives launched by the company start to bear fruit, it might look very different to even the Canary Wharf of a few years ago.
That can’t happen soon enough. All city business districts have had to rethink their purpose and adapt their offering since the onset of the Covid-19 pandemic in early 2020. But for Canary Wharf, a neighbourhood still best known for towering office blocks and financial services tenants, the existential questions have arguably been even more pressing.
The Brookfield and QIA-owned company reported underlying pretax profit last year of £52m, down by more than a third on 2020.
Not that Khan talks in terms of challenges. He moved from the US to join the company in late 2019, taking over the chief executive post from Sir George Iacobescu. Since then, the former president of General Growth Properties has steered the company and the estate through the pandemic with a focus on what he calls its “evolution”. And the residential towers, new restaurants and bars, increasingly green public realm and targeted tenants are all part of that journey, he says in an interview on the 30th floor of the group’s estate headquarters.
“A lot of people are used to, in their mind, [the estate] when they were here five, 10 years ago,” Khan says.
“We’re on Canary Wharf 3.0,” he adds. “Canary Wharf 1.0 started 30 years ago. They built an amazing estate, great infrastructure, fantastic buildings. Then Canary Wharf 2.0 started eight years ago with the next evolution of Wood Wharf and building residential. At the end of 2020 and the beginning of 2021 was the first time people could actually live on the estate.”
And now for 3.0. “We’ve got an unbelievable roster of food and beverage that opened up, great amenities,” Khan says. “And so now in this third phase we really are just evolving. We’ve got the fastest electric go karts here. Paddle boarding is coming here. Padel tennis is coming here. Hotels, schools. We’ve really created a mixed-use, vibrant community where you can actually live, work, play and thrive.”
On track
With so much changing, Khan’s concern now is ensuring people know just how different Canary Wharf is from the estate of five or 10 years ago. Crossrail should help. We speak about a week before the Elizabeth Line is set to open, and Khan hopes the public will be surprised to discover that getting to the estate is not the trek they might once have thought.
“It dispels that misperception that we’re so far away when we’re not,” he says.
“Having that connection does two main things. One is the connection to Heathrow – being able to get to Heathrow in 39 minutes on a direct, proper train with Wi-Fi will be fabulous. And then there’s the connection to the east, because that’s where all the growth is happening. To be able to have two ways of accessing that for us will be great. And obviously getting to Paddington and to Liverpool Street will be phenomenal as well.”
Khan adds: “It’s great for London and a game-changer for Canary Wharf.”
More change – at least in terms of the estate’s landscaping – will come from a tie-up confirmed last month with the Eden Project, the charity behind the eponymous clay pit-turned-tropical-biome in Cornwall.
“I think if Covid did anything, it put a spotlight on health and wellbeing,” Khan says. “We’re going to be trying to add to that in terms of our 20 acres of parks and five kilometres of boardwalk.”
The charity will first develop a “green spine” running through the centre of the estate, introducing a new element of biodiversity to the area comprising new parks and gardens, bridges, boardwalks and floating pontoons. Phase two will be South Dock, where the group wants to create a boardwalk giving access to kayaking and other activities, while phase three will be a revamp of Montgomery Square.
“Canary Wharf has been recycling with no waste since 2009,” Khan says. “We’ve been buying green energy since 2012. It’s continuing that evolution but saying, knowing what we know about the amazing boardwalks at Wood Wharf, how do we incorporate that water into the main estate? That’s the vision of enlivening the middle dock and south dock where people can now rent kayaks and hopefully go swimming and paddle boarding.”
A biodiversity push will only go so far in mitigating the environmental impact of the built environment, Khan knows. But everything helps.
“We are where we are,” he says. “We’ve got to do our best to help with the mitigating factors that we can, whether it be to renovate buildings or to build new buildings with ESG credentials and BREEAM Outstanding and so forth. So you’re just constantly looking at how to get better. And I think it’s everybody’s task and responsibility to do what they can now.”
London vs the world
To the north of the estate the company is bringing on another partner to offer its own expertise on a new initiative. Canary Wharf Group has struck a joint venture with lab developer Kadans Science Partner to work on what the pair claim will be Europe’s largest commercial lab, a 22-storey, 750,000 sq ft scheme at the North Quay site.
The chance to create a new life sciences hub for the capital excites Khan: “You look at the amazing universities that London has and you see the kind of talent that’s generated here. Then you see what the [Francis] Crick [Institute] has done in terms of innovation. Then you look, as the government’s dictated, at where health and life sciences is going and wanting to be a science superpower. And then you compare London to markets like Boston or San Francisco or San Diego, and you see the starkness in the demand and supply imbalance.”
A life sciences drive is an obvious strategy for a company like Canary Wharf Group, Khan adds. With the ability to create homes for staff, new lab space, all the necessary amenities and improved transportation links, “It was like a logical step that there’s an industry growing dramatically, a demand and supply imbalance, and we can provide [what] those companies need.”
Of course, other companies will be trying to provide that too. But Khan denies that he sees schemes such as British Land’s Canada Water as a rival for life sciences tenants.
“London needs millions and millions of square feet of this space to attract world-class talent and companies, just given all the opportunities that are out there,” he adds. “I think it’s competition of London versus Boston versus San Francisco. And I agree with the government’s vision of it. We need to be a science superpower and we need to track that.”
Open doors
Neither the estate’s traditional office occupiers nor the agents eagerly drumming up fees should feel left out – Canary Wharf might be focusing more on a mix of uses than a decade ago, but its workplaces are still very much a core offering. The group has joined the growing list of landlords to introduce a flexible office product – MadeFor, revealed earlier this year. And a vote of confidence doesn’t come much louder than investment bank Citi’s decision to launch a reported £100m refurbishment of its 42-storey Citi Tower.
“All businesses have realised they need the office,” Khan says. “The market chatter in July 2020 when we were in lockdown – that the office would go and everyone would be on Zoom – they’ve realised that’s not feasible. But that space inside of it, every company is trying to figure that out as we speak. And I think it will take several years as each company and industry figures out what’s right for their culture.”
The list of questions is long. “How much collaboration space should we have? How much should we have for technology, video and so forth? How much should we have for meeting rooms? How much do we need for quiet space?” Khan says.
“It will be based on what that industry is and what the culture of the company is. But they realised that they need that space, they need to bring in the talent, they need to mentor the next generation, they need to collaborate, they need the creativity. And that’s not going to happen by video.”
Canary Wharf Group itself has been figuring out answers to those same questions, introducing more collaboration space and surveying teams in its different divisions to understand how they want to work. The office is open-plan, with Khan a quintessentially accessible chief executive.
“I have a workstation just like everybody else,” he says. “I want to have an open-door policy. So you just walk right in – there’s no door, literally and figuratively. I firmly believe that we’re all in this together, one for all and all for one.”
That kind of collaboration will be more necessary than ever as the company navigates the challenges of its next normal. Bring on Canary Wharf 4.0.
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