The Sunday Times has reported that global bank HSBC is seeking to relocate its London headquarters to a building “less than half the size” of the space it currently occupies in the capital’s Canary Wharf.
The newspaper reported that property agency Cushman & Wakefield has been tasked with the job of finding the new property.
The news follows an announcement by the bank to its employees last September that it was reviewing its options, and comes two years after HSBC announced it would be cutting its overall London property footprint by around 40%, primarily through a reduction in its support function and head office activities in the wake of the move to hybrid working, with lease breaks acting as the catalyst for enacting the change. HSBC also spoke in 2021 of halving its overall real estate footprint globally “over the long term”.
Workplace consultant Andrew Mawson of Advanced Workplace Associates said that the bank’s high-profile move reflects what his organisation is observing – and that this is “only just the beginning”.
“We think supply will eventually double, and demand will halve,” said Mawson. “That means you’ll have about four times more space than is needed. Governments may need to prime the pump to turn offices into residential units and other uses. New York developers are already turning city towers, now rendered obsolete by remote working, into homes. It will be interesting to see if there’s enough cash for similar office conversions to residential in the UK. It will definitely be a buyers' market. Occupiers with leases expiring over the next two or three years should not be hoodwinked by the agents and landlords into thinking that it's a tight market because rents must now fall.”
At last week’s Workplace Futures conference, another workplace consultant – Tim Oldman of Leesman – also spoke of a 40% reduction in office space, in his case as a guide figure to the likely overall reduction in demand according to figures gleaned from his own company's surveying.