HSBC is set to move its global headquarters to a smaller office in central London after its lease expires, ending two decades in Canary Wharf. The move is a blow to the business district that underlines the growing trend of companies cutting office space as they adapt to the rise of homeworking.
In a memo to staff the bank said on Monday that it expected to relocate to its new office in late 2026 and that its preferred option was Panorama St Paul’s in the City of London, a building that was formerly an office for telecoms group BT and was redeveloped by Orion Capital Managers.
HSBC has had its headquarters in Canary Wharf since 2002, when it moved into its 42-storey Norman Foster-designed offices under then-chair Sir John Bond. The bank spent about $1.2 billion (€1.1 billion) to move retail, business, corporate and investment bankers out of offices scattered across London and integrate them into the single Canary Wharf tower featuring HSBC’s two lions outside its main entrance.
In recent years the group has announced a goal of cutting 40 per cent from its global real estate costs.
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Changes in working patterns since the coronavirus pandemic have left fewer people working full-time in Canary Wharf. In 2021, HSBC’s chief executive Noel Quinn abolished the entire 42nd executive floor of its skyscraper in the east London district and turned the space into client meeting rooms and collaborative spaces. Executives now hot-desk on an open-plan floor two storeys below.
“Our offices were empty half the time because we were travelling around the world,” Quinn said at the time. “That was a waste of real estate.”
The global bank has regularly reviewed whether its headquarters should stay in the UK or move to Hong Kong – which drew the bank into political controversy on the eve of the 2015 general election. The bank announced in September that it would keep its global headquarters in the UK.
HSBC has also been reviewing office space globally. Last year it cut 110 support staff in Switzerland and scaled back its office space in Geneva due to clients withdrawing money from its private bank. It has also relocated its US headquarters to a new Tishman Speyer-developed tower on the west side of Manhattan.
HSBC said the move to a smaller, more central office, which was first reported by the Times, would help it meet its net zero commitments and allow for flexible working. Its current tower is owned by the Qatar Investment Authority, which also co-owns Canary Wharf.
City of London corporation chair Chris Hayward said HSBC’s decision to move headquarters was “a huge vote of confidence for the City”.
It comes as many companies look to downsize to more central offices in an attempt to reduce their carbon footprint and adapt to hybrid working. Law firm Clifford Chance said last autumn that it would move from its Canary Wharf office to a “net zero” building in the City.
French bank Société Générale, which in 2019 took up seven floors of the One Bank Street Canary Wharf skyscraper, chose to sublet some of its office space after the onset of the pandemic led to an increase in remote working.
Office vacancies have risen in London from 5 per cent in March to 9 per cent in May, according to data provider CoStar. However, they are particularly high in Canary Wharf, which had a vacancy rate of more than 10 per cent in May, compared with just 3 per cent in some parts of the West End. – Copyright The Financial Times Limited 2023
