The value of Canary Wharf’s office blocks slumped again last year as the London finance hub continued to struggle.
The office estate owned by Canary Wharf Group (CWG) fell in value by 4.1 per cent, or £180million, to £4.2billion in 2024, according to its latest accounts.
It wasn’t as steep a decline as the previous year when the value dropped by £954million,
owing to the widespread use of hybrid working arrangements following the Covid pandemic – which battered demand for business properties.
The latest fall in value highlighted the challenge facing Canary Wharf as it looks to redefine itself and move away from its reputation as a bank- focused finance hub.
The group, which is owned by Canadian property investment giant Brookfield and Qatar’s sovereign wealth fund, has seen some high-profile tenants, including HSBC and law firm Clifford Chance, move their offices away from the estate.
Vacancies: The office estate owned by Canary Wharf Group fell in value by 4.1%, or £180m, to £4.2bn in 2024, according to its latest accounts
As a result, CWG has focused on attracting residents and retailers to broaden the appeal of the area beyond being just a workspace for bankers.
While the value of its office blocks declined during the year, the company reported that its
portfolio of retail properties increased by 0.9 per cent to £1.2billion – although residential property values dropped 7.2 per cent to £208million.
Overall, the value of the entire estate fell by 1.2 per cent during the year to £6.8billion.
Despite the slower decline in the value of its offices, the firm reported that more of them are now lying empty, with occupancy rates falling to 88.2 per cent last year from 91.1 per cent in 2023.
While more workers return as the effects of the pandemic recede, London’s office market is continuing to struggle as some companies cut back on space to save costs.
The Docklands area, which includes Canary Wharf, has the highest office vacancy rate in the city at around 19 per cent – a figure that is expected to increase further as large tenants, such as investment banks, decamp to other locations.
While CWG is continuing to pivot away from offices, they still make up the majority of its portfolio, equivalent to nearly 63 per cent of its total value.
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