HSBC to Leave Canary Wharf for BT’s Former City Office

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(Bloomberg) — HSBC Holdings Plc is planning to leave its Canary Wharf headquarters and downsize to a smaller office in the City of London, the latest sign of how a shift to flexible work is reshaping demand for offices. 

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The lender, which launched a review in September, said its preferred option is BT Group Plc’s former head office near St Paul’s, according to a memo seen by Bloomberg News. The bank said it “will now begin more detailed discussions on a potential lease, with the intention to move in late 2026.”

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HSBC has been looking for alternatives to its Docklands skyscraper as it looks to a more flexible workspace and adapts to the post-pandemic cityscape, according to a memo sent last year by the bank’s chief operating officer John Hinshaw. The lease on its current 1.1 million square foot headquarters is due to expire in 2027. 

Orion Capital Management, a private equity firm, is redeveloping the former BT headquarters on Newgate Street to provide about 570,000 square feet (52,955 square meters) of office space. The Times of London reported the move earlier. 

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The UK lender has resided in the 45-story 8 Canada Square property since 2002, when it was completed by Canary Wharf Group. The building is now owned by Qatar’s sovereign wealth fund, which bought it for about £1.1 billion ($1.4 billion) in 2014.

Read more: HSBC’s London Office Shortlist Includes Former Goldman Sachs HQ

HSBC’s decision also comes after Moody’s downgraded Canary Wharf Group’s debt deeper into junk territory last moth. The decision to leave the east London financial district is a blow for Qatar and Brookfield, joint owners of Canary Wharf Group, which had drawn up plans for a new development in a bid to persuade HSBC to stay. The lender is the latest in a series of long-standing occupiers to leave or downsize their offices in Canary Wharf. 

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Law firm Clifford Chance signed a deal to vacate in favor of a building in the City of London, while Citigroup Inc. is shrinking from two buildings to one. The future of Credit Suisse’s Canary Wharf headquarters also remains uncertain following its takeover by UBS Group AG. 

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Canary Wharf Group has been attempting to lure life sciences companies to the area as financial firms retreat. It is also building thousands of homes as it looks to inject life into the area outside of office hours. 

However, the future of the original office estate remains uncertain, with substantial investment required to upgrade and improve the environmental performance of the older glass and steel towers to make them attractive to tenants against a backdrop of anemic demand. A pair of office buildings in the district have been put into receivership after their Chinese owner failed to repay the loans secured against them. 

(Updates with details.)

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