Canary Wharf suffers £180m slump amid struggle to recover from home working

Nearly £200m has been wiped off the value of Canary Wharf’s office buildings as the financial district continues to struggle with the impact of working from home.

Canary Wharf Group (CWG), which owns and manages most of the Docklands area of east London, said the value of its offices fell to £4.25bn in the 12 months to December, down from £4.34bn a year earlier.

A further £85m was also spent on investment, which increased the overall office losses to £180m.

This came after office occupancy rates fell from 91pc to 88.2pc in 2024, which led to rental income sliding by 9.3pc to £224.7m.

Bosses blamed the drop-off on high interest rates and the continued slowdown in the property market, while also claiming that global political uncertainty contributed to “slow” corporate decision-making.

While still a significant decrease in value, the pace of decline has slowed from last year, when nearly £1bn was wiped off CWG’s offices.

The group still faces financial pressures after a string of companies announced plans to abandon their Canary Wharf offices to relocate to other parts of the capital.

The latest tenant to confirm its departure was State Street, the US bank that is understood to be buying a new office in the City.

Other major firms leaving Canary Wharf for the City include HSBC, Moody’s and Clifford Chance, as businesses attempt to shrink their office footprints to cope with the rise of hybrid working.

However, the exodus from the district has eased over the past year, with the likes of Citi, Morgan Stanley and Barclays all agreeing to stay.

Fintech companies Zopa and Revolut have also confirmed plans to move into new offices in the district.

Meanwhile, State Street’s existing headquarters at 20 Churchill Place is owned by US investment group Brookfield Asset Management, which bought the building for around £250m in 2021.

Brookfield also jointly owns Canary Wharf Group with the Qatar Investment Authority. The pair agreed to inject almost £1bn in new equity last year as part of a deal to refinance its debt.

In a bid to ramp up its appeal to visitors, CWG has undertaken a series of initiatives, including adding more green space, flats, shops, restaurants and leisure venues.

It is also building a tower with labs for commercial life sciences companies.

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