City outrage at being sold down the river

Corporation of London rounds on Canary Wharf as cheap rents entice financial institutions to Docklands. Paul Rodgers reports

A FURIOUS row has broken out between the Corporation of London and Canary Wharf in the wake of the decision by investment bank BZW to shift some of its operations from the City to Docklands.

The corporation, the local authority for the City, has accused Canary Wharf management of breaching a gentlemen's agreement not to poach financial institutions.

Michael Cassidy, chairman of the corporation's policy committee, said Sir Peter Levene, the Canary Wharf chairman, assured him in September that the investment bank's £200m move was a one-off that would not be repeated. "On that basis I accepted it," he said. "But now they are targeting precisely that market."

Sir Peter denied the charge, saying his agents respond to requests from clients, but do not solicit them. "There's no way we're going after companies to persuade them to move out of the Square Mile," he said. "That's rubbish. I had a very clear understanding with Michael Cassidy and we have kept to that understanding in every way."

But property agents, including one acting for Canary Wharf, said the low rents were attracting a number of potential clients. "Canary Wharf is doing exactly what any developer would do who had a partly let development," said one.

Four organisations now looking for new premises could end up in Docklands: the futures and options market Liffe, ABN Ambro, Deutsche Bank and Westdeutsche LB. The European Bank for Reconstruction and Development is also considering a move out of the City to cheaper premises. Canary Wharf already hosts Credit Suisse, Morgan Stanley and Bear Stearns.

Docklands' advantages are low rents and large floor plates. It is the only London district with vacant offices of more than 100,000 square feet. The City has only two top grade premises with more than 30,000 sq ft available, but boasts better communications and transport links.

To counter Docklands' attractions, Mr Cassidy wants to relax the City's planning procedures; 50 large developments are awaiting consent. But banks burdened with an estimated £32bn in bad loans from the last property boom are reluctant to back new developments, even if they do get approval.

Nick Baucher, a partner with chartered surveyor Hillier Parker, suggested many listed sites in the City should be opened for development.

"Some of those buildings should be knocked down despite the screams of English Heritage," he said. "And a lot of the rest should be converted to livelier uses."

Many landlords shy away from turning older buildings into restaurants or shops, preferring to leave them vacant rather than write down their book value.

Sir Peter and Mr Cassidy will meet after Easter to settle their differences. Both want their districts to complement each other, and Mr Cassidy hopes to draw up a protocol about which businesses should be located where.

He views London Docklands as an appropriate location for back-office operations, including the settlement departments, but not for front offices such as trading floors.

But Sir Peter said it was not his place to tell customers that they cannot move certain departments. "It's up to the client to decide," he said.

Research commissioned by the corporation shows that clustering financial institutions in a tight geographical area is a key element in the City's success in the global market.

Mr Cassidy pointed to a report by the City Research Project which found that Wall Street has suffered from having up to a third of its financial institutions move to cheaper premises in mid-town Manhattan and outlying boroughs.

Squaring off against the Square Mile

Docklands The City

Average rent per square foot £15 less holiday £35

Total office space (sq ft) 13m 81.5m

British Rail Stations 0 7

Underground/ DLR stations 4 11

Travel time from Waterloo 30 minutes 4 minutes

Fibre-optic networks 1 4

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Supporting role: at the Supreme Court, Rhodes was accompanied by a famous friend, the actor Benedict Cumberbatch
booksPianist James Rhodes on the extraordinary legal battle to stop the injunction of his memoirs
Arts and Entertainment
Jesuthasan Antonythasan as Dheepan
filmDheepan, film review
Sport
Steven Gerrard scores for Liverpool
sport
News
peopleComedian star of Ed Sullivan Show was mother to Ben Stiller
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?