Barclays is to stay put in its 1 million-square-foot Canary Wharf headquarters One Churchill Place until at least 2039 in a major lift to London’s Docklands financial centre after recent exits by some major tenants.
It is also paying at least £263 million in a separate deal to hand its tenancy of another building on the estate, 10 Cabot Square, back to Canary Wharf Group, which intends to reposition it, potentially for life sciences.
Canary Wharf Group Investment Holdings, the landlord owned by Brookfield and the Qatar Investment Authority sovereign wealth fund, announced that a subsidiary of CWGIH will amend its lease arrangements with Barclays Bank at 10 Cabot Square and take a sub-lease over these premises. The proceeds will be used to redeem £263.5 million of notes under the existing commercial mortgage backed securities securitisation, with the remainder being used for general corporate purposes. Following the transaction, 10 Cabot Square will no longer be secured under the securitisation. The move was confirmed in a bondholder update yesterday.
In a separate transaction, Barclays Execution Services is extending the lease of its UK headquarters at One Churchill Place by five years to 2039, underlining its long-term commitment to the district, the parties said.
John Mulqueen, chief investment officer, CWG, said in a statement: “Businesses want their offices close to a range of leisure and amenities to help attract and retain talent. Canary Wharf is a 15 minute city with access to great transport links, access to 16.5 acres of parks and a wide range of amenities and cafes, bars and restaurants. We will reposition 10 Cabot Square to meet the increasing demand for high-quality sustainable office and life science uses, as well as providing an opportunity to add mixed uses such as hotel, education and leisure.”
Alastair Blackwell, chief operating officer, Barclays Execution Services, said: “After announcing our intention to exit 5 North Colonnade in 2021, I am pleased we have reached this agreement with CWG which delivers a long-term cost saving for the bank. Canary Wharf is a fantastic place to work and our 5-year lease extension at One Churchill Place is testament to that.”
Alongside the major office district, Canary Wharf is home to over 3,500 residents with over 310 shops including over 70 restaurants, cafes and bars.
The moves of major bank tenants at the east London financial centre have been in the news since HSBC announced this year it was leaving its 42-storey headquarters when the lease expires in 2027 and relocating to a smaller office in the City. Credit Suisse's staff were told in September that they would begin to move from Canary Wharf to UBS’s UK head office in the City following the takeover of Credit Suisse by UBS.
Office vacancy rates in Canary Wharf remain higher than in other London districts at about 14%, compared with 11$in the City and 6 per cent in the West End, according to CoStar data.
Barclays Bank said in June 2021 it would consolidate its investment banking staff out of the circa 500,000 square feet it occupied in 5 North Colonnade into its nearby headquarters at Canary Wharf.
The British bank said it would vacate 5 North Colonnade by the end of 2022 and planned to renovate its 32-storey One Churchill Place building to accommodate staff as part of what it termed a long-term review of its property footprint.
Barclays is understood to be preparing to invite pitches for corporate real estate advise across its global estate.
Global banks have been scaling back their real estate occupation in recent years, with Barclays notably focused on creating a "campus" model of office in areas such as Glasgow and the North West of England.
In 2018, Barclays opened a campus in Whippany, New Jersey, bringing together its operations and technology staff from across the Americas.