London's Canary Wharf plans low-rise future

Fri Mar 22, 2013 6:29am EDT
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By Tom Bill

LONDON (Reuters) - London's Canary Wharf district is turning to smaller office blocks, apartments and street-level shops for its next phase of development as the financial crisis brings the era of the bank-branded skyscraper to an end.

The plan relates to a 20-acre site called Wood Wharf which is adjacent to the main estate and aims to tap into demand from "creative industries" like fashion, technology and the media, said Songbird Estates, the majority owner of Canary Wharf Group, alongside its full-year results on Friday.

"We have the space to cater for these different types of companies," said Canary Wharf Group company secretary John Garwood. "In Shoreditch there is not a lot of spare space," he said, referring to the scruffy east London area on the fringe of the traditional City financial district popular among fashion and media tenants.

As part of a plan to become less reliant on the ailing banking sector, this month Canary Wharf opened an area for new technology companies on level 39 of One Canada Square, the area's tallest office block.

Demand from banks for new offices has dried up in the wake of the financial crisis and rents are dropping in some buildings in the City district where floors are still empty.

While developers say the technology and media industries will buoy demand, some have questioned whether it will be enough to plug the gap.

"The residential element of Wood Wharf makes perfect sense given strong demand and rising prices in central London," said Investec analyst John Cahill.

"But you'd have thought technology and media companies would prefer the West End. I can't see it being a driver for Songbird in the way it will be for Great Portland, Derwent London and Workspace," he said, referring to the area of the city popular among tourists and shoppers.   Continued...

The Canary Wharf financial district is seen in east London February 28, 2013. REUTERS/Stefan Wermuth