QIA drops radical redevelopment plans as London offices heat up again

Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), is revising plans to overhaul HSBC’s 45-storey headquarters in London’s Canary Wharf, as a global rebound in office demand encourages companies to bring staff back on-site, two sources told Reuters.

QIA is now considering retaining up to 80% of the skyscraper as office space once HSBC vacates the building in 2027. The fund, which acquired the tower for £1.1 billion in 2014, had previously examined more radical redevelopment options, including leisure, entertainment, education facilities and even a theatre.

The shift reflects stronger-than-expected demand for quality office space, as well as cost considerations, the sources said. Keeping the tower predominantly as offices would lower redevelopment costs, though plans remain fluid and will depend on future tenant requirements.

QIA has brought in property veteran George Iacobescu, former chairman of Canary Wharf Group, to advise on the overhaul, including sustainability upgrades across its UK assets. The revised project is expected to maintain the exterior design proposed in 2023.

The redevelopment is being closely watched across the real estate sector, as landlords seek ways to modernise aging office towers amid changing workplace expectations. 

Canary Wharf, hit hard by the post-pandemic drop in office demand, is seeing gradual improvement: firms including BBVA, the UK Serious Fraud Office, and even HSBC itself have recently taken new space there.

Vacancy rates in the Docklands area have fallen from a peak of 18.6% in March to around 15%, though still above the London-wide average of 10.4%, according to CoStar.

The HSBC tower revamp is expected to cost hundreds of millions of pounds, though the project team is optimistic it will be cheaper than Citi’s US$1.5 billion renovation of its nearby tower. 

QIA may also drop earlier ideas such as an 80-room hotel or temporary serviced-office floors, with a move instead toward conventional leased workspace.

QIA declined to comment.