Canary Wharf proposes £500mn lab project to reinvent financial hub

Canary Wharf Group has laid out plans to build one of the largest commercial labs in Europe, accelerating efforts to reinvent the financial services hub in east London district as a buzzing commercial and residential neighbourhood.

The landlord is developing a 22-storey, 750,000 square foot block split between wet labs and offices, which it hopes will ultimately be the anchor for a thriving life sciences cluster in east London.

The company is partnering with Kadans Science Partner, a specialist Dutch developer, on the project, which is expected to cost at least £500mn to build according to people with knowledge of the matter.

The project, due to complete in 2026, is a key part of CWG chief executive Shobi Khan’s vision to transform the area and attract a wider array of tenants.

The Wharf had changed from “what the old guard knew it as”, said Khan. The financial district envisaged 30 years ago as a rival to the City of London was giving way to a mixed use neighbourhood with more leisure activities and homes, he added.

“We’re down to 50 per cent financial services [tenants] and we’re broadening out to health and life sciences now. This is a city within a city,” he said.

Last month, the Financial Times revealed that the company was looking at turning as much as a fifth of its portfolio into flexible office space — a radical departure from the traditional model of signing long leases on large buildings to financial services firms.  

About 120,000 people regularly worked at Canary Wharf before the pandemic, which stemmed the flow of workers to the area and starved local businesses of income. Khan said the number of people currently commuting in was at a pandemic high, but he would not give a figure.

A number of landlords and institutions are investing in life sciences, confident that a focus on healthcare and scientific research — intensified by the pandemic — will keep demand for lab space rising.

Kadans itself was bought by Axa IM Alts, a division of French fund group Axa Investment Managers, in 2020. The group has since committed to spend around €2bn expanding the business.

US funds Blackstone and Brookfield, which are among the largest investors in UK real estate, both have large life sciences investments.

CWG is competing against more established clusters as it attempts to foster a life sciences hub in east London. Oxford, Cambridge and the area around King’s Cross in north London already have acres of lab space and are anchored by top universities and research facilities. Those areas, nicknamed the “golden triangle”, have attracted the bulk of recent investment into life sciences property in the UK.

Michel Leemhuis, chief executive of Kadans, said he was unbothered by those rivals. “We’re used to starting a new development speculatively, and our experience is that it is fully occupied as soon as it is finished . . . the size of the building [in Canary Wharf] on its own is big enough to create its own ecosystem,” he said.