This content is from: Corner Office
For Sale: Canary Wharf
One Canada Square — the centerpiece of London’s redeveloped dockyards — made Canary Wharf into an ultra-tight commercial real estate market, one its owners look to capitalize on.
In 1981 the U.K. government found itself saddled with a dilapidated spread of dockyards in the East End of London — the husks of a long-gone shipping hub.
Commercial activity at the West India Docks — once the busiest in the world — had dwindled to almost nothing by 1980, and the government seized the land in hopes of revitalization.
Within a decade, skyscraper One Canada Square began rising on site, a global icon now synonymous with Canary Wharf.
Land no one wanted has become a precious commodity.
Qatar Investment Authority and Canadian investment group Brookfield Property Partners acquired the majority of the financial district in 2015 for £2.6 billion (then $3.9 billion), buying out shareholders in management company Canary Wharf Group (CWG). The estate has thrived in recent years due to a shortage of nearby commercial real estate, and that tight supply looks set to continue. Canary Wharf has only one building under construction, according to a report by estate agents Knight Frank. And 1 Bank Street — which will add 700,000 square feet of prime office space — will not be completed until 2019.
Other sites could be built upon, the report said, but CWG’s management team is reluctant without a tenant agreed to in advance. CWG did not respond to a request for comment.
Those looking to snap up a piece of the Wharf had an opportunity in March, when part-owner Brookfield asked property agents Jones Lang LaSalle to sell 20 Canada Square. Oil giant BP and media group McGraw Hill occupy the 556,000-square-foot office block. It produces a 5.25 percent net investment yield, according to Knight Frank, for a capital value of £720 per square foot. Not bad for a former ward of the state.