HSBC’s move from Canary Wharf to St Paul’s is a big win for the City and hybrid working
HSBC is set to leave its home of 20 years at 8 Canada Square in Canary Wharf, and relocate to a site near St Paul’s Cathedral previously occupied by BT.
The move, first reported by The Times, is hugely significant in what it says about demand for office space – and not just in London.
HSBC’s existing headquarters in London, to which it moved in 2002, currently houses up to 8,000 employees at peak hours. The new development, Panorama St Paul’s, is roughly half the size.
That reflects the fact that HSBC does not expect as many of its employees to be working in its head office at the same time in future.
It is a clear indicator from one of the biggest employers in the UK financial services sector that hybrid working, where employees work from home for a certain number of days a week and in the office for others, is here to stay.
At odds with others
The decision also puts HSBC at odds with some of the big Wall Street banks that dominate the investment banking landscape. The likes of JPMorgan and Goldman Sachs have been strident in their calls for employees to return to the office in the post-pandemic world.
By contrast, other employers in the Square Mile and Canary Wharf have taken a more flexible approach, with the likes of Lloyds Banking Group telling staff they expect them back in the office for at least two days a week in April this year.
The insurers Aviva and Axa, the asset managers BlackRock and abrdn, and accounting and business services groups such as Deloitte, PwC and EY are all among those who have avoided ordering staff to return to the office five days a week.
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Implications to commercial property and beyond
That approach – and it very much looks to be the dominant one – will have massive implications for the commercial property sector.
It potentially leaves office owners with a surplus of space – even though recent business surveys by the likes of the property services group Savills suggest that demand for office space in central London is currently running at 10% ahead of its 10-year long-term average.
With the City and West End still pretty quiet on Mondays and Fridays – albeit not as quiet as they were during the lockdown period – it will also have implications for shops, bars and restaurants.
There are also implications for the owners of Canary Wharf itself.
The development, one of the most stunning urban regeneration projects achieved anywhere in the world during the last three decades, has been seeking to pivot away from financial services, the sector with which it is most strongly associated, into fields such as life sciences and the creative industries.
It has also begun offering residential space for the first time.
All of that was happening anyway. But the company – jointly owned by the Qatari government and the Canadian investment giant Brookfield – could still have done without HSBC moving on.
Another major Canary Wharf tenant, Credit Suisse, was also looking to sub-let some of its office space even before its rescue in March by local rival UBS.
Canary Wharf’s credit rating was downgraded at the end of last month by Moody’s.
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A run of wins for the City
By contrast, the City of London Corporation – which has slugged it out for decades with Canary Wharf for office tenants – will be cock-a-hoop at luring HSBC back to the Square Mile, particularly as the news comes weeks after Clifford Chance, one of the five “magic circle” law firms, announced it would be moving back to the City from the Wharf when its lease there expires in 2028.
Luring HSBC to its new development – the bank told employees today the site was its “preferred option” – will also be a coup for Orion Capital Partners, the private equity firm, which acquired BT’s old head office at 81 Newgate Street in 2019 and which has been rebuilding it since the latter moved east to Aldgate in 2021.
HSBC, whose lease on the tower expires in 2027, also reportedly considered Evargo Tower, a site being developed to the rear of Fleet Street’s River Court, the 1932 Art Deco building previously occupied by Goldman Sachs and before that, Express Newspapers, whose journalists nicknamed it the “Black Lubyanka”.
Also considered, apparently, was 175 Bishopsgate, the vast building near Liverpool Street station previously occupied by the European Bank of Reconstruction and Development (EBRD).
The opulence of that building, replete with its marble walls, led the EBRD to be nicknamed “the Glistening Bank” – a pun on the old “Listening Bank” slogan of Midland Bank, which ironically was later bought by HSBC.
To add to the irony, the EBRD has since moved to Canary Wharf.
Moving from a symbolic home
HSBC’s existing home has been symbolic to the bank for many years.
Designed by the award-winning architect Sir Norman Foster, it brought together employees from around 20 HSBC and Midland Bank sites dotted across the City of London, including the striking blue glass building at 10 Lower Thames Street and the neighbouring (and less glamorous) St Magnus House; the now-demolished Mariner House on Pepys Street near Tower Hill; Fountain House on Fenchurch Street; Watling Court on the corner of Cannon Street and Bow Lane and, most famous of all, the beautiful old Midland Bank Group headquarters at 27 Poultry, which is now a hotel and member’s club christened – in a nod to its architect Sir Edwin Lutyens – The Ned.
To that extent, the now 45-storey building was a big commitment on HSBC’s part, following its acquisition of Midland in 1992.
At its completion it was the second-biggest building in Europe – after Canary Wharf’s flagship first tower at nearby 1 Canada Square – and has continued to break records since.
When HSBC sold it in 2007, to the Spanish company Metrovacesa, it was the first building in the UK to change hands for more than £1bn.
The buyer ran into difficulty during the financial crisis and, in December 2008, HSBC bought it back – making a reported £250m profit on the original deal.
The following year, HSBC sold the building on to South Korea’s national pension service, again at a profit. The tower has been owned since 2014 by the Qatar Investment Authority.
Since then, it has also been at the heart of the perpetual debate at HSBC over whether or not to retain its global headquarters in the UK or move to Hong Kong, something it reviews on a triennial basis.
There was once a time when this seemed almost inevitable and that day may still come.
For now, though, the only move on the cards appears to be four-and-a-half miles west from Canary Wharf.
Business
Major milestone in Post Office scandal as first Capture conviction referred to Court of Appeal
The first Post Office Capture conviction has now been formally referred to the Court of Appeal, marking a major milestone in the IT scandal.
The Criminal Cases Review Commission (CCRC) made the decision to refer the case of sub-postmistress Patricia Owen back in July.
Mrs Owen was convicted of theft by a jury in 1998, based on evidence from the faulty IT software Capture.
She was given a suspended prison sentence and fought to clear her name afterwards – but died in 2003.
Capture software was used in 2,500 branches between 1992 and 1999.
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The first Capture conviction was sent for appeal in July
It is the first time a conviction based on Capture – the predecessor to the Horizon system at the centre of the wider Post Office scandal – has reached the Court of Appeal.
It comes after Sky News revealed that a damning report into Capture, which could help overturn convictions, had been unearthed after nearly 30 years.
An investigation found the Post Office knew about the report at the time and continued to prosecute sub-postmasters based on Capture evidence.
Mrs Owen’s family submitted an application to the CCRC in January 2024 – her case has now been referred on the grounds that her prosecution was an “abuse of process”.
A ‘touchstone case’ for victims
Lawyers have said that if Mrs Owen is exonerated posthumously in the Court of Appeal, it may “speed up” the handling of others.
The CCRC is also continuing to investigate more than 30 other “pre-Horizon” convictions.
CCRC chair, Dame Vera Baird, also told Sky News in the summer it could be a “touchstone case” for other victims.
Juliet Shardlow, Mrs Owen’s daughter, has been fighting to clear her mother’s name for years.
She told Sky News the family were “so pleased” her case had finally been referred.
“This has been a very long journey for us as a family and we can now see the light at the end of the tunnel,” she said.
“It’s just sad that mum isn’t here to see it.
“The good news is that once mum’s case is heard in the High Court, it will pave the way for all the other Capture victims.”
The Post Office has previously said it is “determined that past wrongs are put right and continue to support the government’s work in this area as well as fully co-operate with the Criminal Cases Review Commission”.
Business
UK suffers blow in bid to become minerals superpower – as it’s snubbed by its own leading firm
Britain’s hopes of becoming a critical minerals superpower have been dealt a severe blow after one of its leading companies abandoned its plans to build a rare earths refinery near Hull.
Pensana had pledged to build a £250m refinery on the banks of the Humber, to process rare earths that would have then been used to make magnets for electric cars and wind turbines.
The plant promised to create 126 jobs and was due to receive millions of pounds of government funding.
However, Sky News has learnt that Pensana has decided to scrap the Hull plant and will instead move its refining operations to the US.
Pensana’s chairman, Paul Atherley, said the company had taken the decision after the Trump administration committed to buying rare earths from an American mine, Mountain Pass, at a guaranteed price – something no government in Europe had done.
“That’s repriced the market – and Washington is looking to do more of these deals, moving at an absolute rate of knots,” he said.
“Europe and the UK have been talking about critical minerals for ages. But when the Americans do it, they go big and hard, and make it happen. We don’t; we mostly just talk about it.”
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The decision comes at a crucial juncture in critical minerals and geopolitics. China produces roughly 90% of all finished rare earth metals – exotic elements essential for the manufacture of many technology, energy and military products.
Last week, Beijing imposed restrictions on the exports of rare earths, prompting Donald Trump to threaten further 100% tariffs on China.
Pensana had been seen as Britain’s answer to the periodic panics about the availability of rare earths. The site at Saltend Chemicals Park was chosen by the government to launch its critical minerals strategy in 2022.
Visiting for the official groundbreaking, the then business and energy secretary Kwasi Kwarteng said: “This incredible facility will be the only one of its kind in Europe and will help secure the resilience of Britain’s supplies into the future.”
He pledged a government grant to support the scheme. That grant was never received because Pensana never built its plant.
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Paul Atherley and Kwasi Kwarteng at a groundbreaking ceremony for the plant in July 2022. Pic: Pensana
Mr Atherley said he is optimistic about another project he’s involved with, to bring lithium refining to Teesside through another company, Tees Valley Lithium.
But, he said, rare earth processing is far more complex, energy-intensive and expensive, making it unviable in the UK, for the time being.
The decision is a further blow for Britain’s chemicals industry, which has faced a series of closures in recent months, including that of Vivergo, a biofuels refiner based in the same chemicals park where Pensana planned to locate its refinery.
Producers warn that Britain’s record energy costs – higher than most other leading economies – are stifling its economy and triggering an outflow of businesses.
The mastermind of a £5bn Chinese investment fraud was found with a device containing £67m of cryptocurrency in a secret pocket of her jogging bottoms when she was arrested after years on the run, a court has heard.
Prosecutors are setting up a compensation scheme after Yadi Zhang, 47, conned around 128,000 Chinese investors into fraudulent wealth schemes between 2014 and 2017.
Zhang, who is also known as Zhimin Qian, admitted money laundering charges after police discovered more than 61,000 Bitcoin, now worth more than £5bn, in digital wallets, in the UK’s biggest ever cryptocurrency seizure.
She arrived in the UK on a false St Kitts and Nevis passport in September 2017 before coming to the attention of police after trying to buy some of London’s most expensive properties.
Zhang rented a £17,000-a-month house in Hampstead, north London. Pic: CPS
Zhang vanished after police raided her £5m six-bedroom rented house near Hampstead Heath in north London in 2018, but was finally arrested in York last year.
In written legal arguments, Martin Evans KC representing the Director of Public Prosecutions Stephen Parkinson, said a ledger and passwords were found in a purpose-made concealed pocket in the jogging bottoms she was wearing.
She revealed the access code for two wallets during interviews in prison, leading investigators to cryptocurrency worth around £67m.
The stash has been added to the £5bn Bitcoin hoard, which has reportedly been earmarked by Chancellor Rachel Reeves to help plug the hole in the public finances.
The fortune is at the centre of a High Court battle between the UK government and thousands of Chinese victims, who want to recover their investment and say it should reflect the huge rise in the value of Bitcoin.
Law firm Fieldfisher, which is representing around 1,000 victims, said some have lost their life savings and many are old and vulnerable.
The court heard the DPP is also setting up a compensation scheme for the victims not represented in court, although no further details have been given.
The judge, Mr Justice Turner, will make orders on the case at a later date.
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Zhang pleaded guilty to charges of possessing criminal property and transferring criminal property on or before the 23 April 2024 last month and is in custody awaiting sentencing in November.
Jian Wen, 43, was jailed for six years and eight months last year after being found guilty of one count of money laundering between October 2017 and January 2022 relating to 150 Bitcoin, now worth around £12.5m.
Jian Wen. Pic: CPS
Her trial heard that Wen, who previously worked in a Chinese takeaway, was not involved in the alleged fraud but acted as a “front person” to help disguise the source of the money.
The court heard how the two women travelled the world, spending tens of thousands of pounds on designer clothes, jewellery and shoes.
Seng Hok Ling, 47, is said to have replaced Wen as Zhang’s “butler”, organising helpers and booking Airbnbs, including in Scotland, for the fugitive while she was on the run.
Seng Hok Ling. Pic: Met Police
Police found Zhang after carrying out surveillance of Ling and seized assets including encrypted devices, cash, gold and cryptocurrency.
Ling, a Malaysian national from Matlock in Derbyshire, pleaded guilty at Southwark Crown Court to entering into a money laundering arrangement with Zhang on or before 23 April 2024 and will be sentenced alongside her.
Prosecutors said Zhang masterminded a scam in China, before converting the money into cryptocurrency to get it out of the country.
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