Canary Wharf's transformation from planning disaster to London's second business district

Abstract

The idea that the world's global financial centers could accommodate second purpose-built central business districts owes it genesis to London's Canary Wharf. Accessible by the Jubilee Underground Line and the Docklands Light Rail system (and after 2022, by London Crossrail), Canary Wharf is a 97-acre mixed-use redevelopment project located five miles east of the City of London atop London's great late 19th and early 20th century ship docks. Initially conceived of as a less-expensive high-rise "back-office" district for the City of London's height-constrained banks and financial institutions, Canary Wharf was developed in the late 1980s at the behest of Prime Minister Margaret Thatcher by Olympia and York (O&Y), a Canadian real estate developer. After five years of planning and construction, Canary Wharf opened in 1991 amidst a severe economic downturn, sending O&Y into bankruptcy. As the market recovered, Canary Wharf prospered, and today, with more than 16M square feet of office space, 300 shops and restaurants, and a growing supply of housing, Canary Wharf is recognized around the world as a British icon. Canary Wharf demonstrates many of the advantages of mega-project development and some glaring disadvantages. In terms of advantages, Canary benefited from the streamlined planning and approval process put in place following the UK Government's establishment of the London Docklands Development Corporation (LDDC) in 1981. The fact that Canary Wharf was designated as an Enterprise Zone allowed O&Y to pass on property and business tax savings to potential tenants. Canary Wharf also benefitted from O&Y's having built similar speculative development projects in Toronto and New York City, and its eagerness to take on risk. On the disadvantage side, O&Y's predilection for risk-taking led it to significantly over-estimate office demand and to not prepare itself for foreseeable market downturns. Nor was O&Y adequately prepared for the slowness with which the UK Government would deliver on its promised public transport investments. Even as the London office market improved, Canary Wharf continued to suffer in the popular mind because of its insular character and the fact that it generated few public or financial benefits for the distressed communities that surrounded it. This reputation damage was not undone until Prime Minister Tony Blair's "New Labour" government ordered the LDDC to pursue social regeneration as vigorously as economic revitalization.