Wednesday’s shock takeover of Canary Wharf Group by the Qatari Investment Authority and Canadian developers Brookfield is the latest twist in the development’s turbulent history. Canary Wharf has changed hands so often that its ancestry is hard to trace.
Many a prospector has run aground on the Wharf. The aircraft warning light that blinks lighthouse-like at the summit of One Canada Square, still Canary Wharf’s tallest building, is a Siren’s call for investors, luring them onto the jagged rocks below.
Paul Reichmann and his Canadian property company Olympia and York were the most famous victims. Hoping to replicate their North American success in London’s desolate East End docklands, the unstoppable force of the Reichmann empire met the immovable objects of a global property slump and the deeply-entrenched prejudice of the City of London, the historic UK financial sector. Canary Wharf bankrupted Olympia and York, sending the development into administration in 1992, creating what looked like the mother of all white elephants on the East End skyline, and setting off years of boardroom battles for control of the development.
There is still a great deal of myth around the Canary Wharf story. Whilst Paul Reichmann and O&Y are rightly credited with building and financing London and Europe’s second largest financial centre, it is rarely acknowledged that they only entered the story as part of a hostile takeover themselves.
The initial stages were even more contentious than the recent history. Gooch Ware Travelstead, US property developer and head of First Boston Real Estate, was behind the original conception. Alongside Reg Ward, the Chief Executive of the London Docklands Development Corporation, a quasi-governmental body established to regenerate East London’s docklands wasteland, Travelstead dared to dream bigger than any of his predecessors.
The gregarious Travelstead was known as “Gee Whizz” by the conservative British establishment, and “Beware Travelstead” by others. Over a two-year period, Travelstead turned the banker Michael Von Clemm’s vague notion that Docklands could become an outpost of the City of London into a full Master Plan, centred around three tall towers, complete with planning permission and proposed transport connections to the City.
Reg Ward, “a dreamer with both feet planted firmly in the air”, did not try to talk Travelstead down. In fact, he escalated the American’s ambitions, helping him to stall for time by keeping the civil service at arms’ length for over two years while Travelstead tried to convince someone, anyone, to leave the City and give life on the Isle of Dogs a try. The work of both figures was key to the emergence of Canary Wharf and should not be forgotten.
Eventually unable to finance the deal, Travelstead was forced to cede control to Olympia and York in July 1987. Yet his Master Plan was barely altered by the Reichmanns, who would bring it to life with their financial might. The Department for the Environment’s legal advisers travelled to the US to meet Olympia and York to establish whether the developers were adequately financed to deal with the British government on such a high-profile development. They returned aghast, claiming that they had been sent with the wrong brief. The real question, they said, was whether the British government was big enough to be dealing with Olympia and York.
Olympia and York was thought by many to be too big to fail – and yet fail it did. The Canary Wharf project itself, however, had a momentum of its own and, today, its future looks strong. Major new developments are planned within and outside the Canary Wharf estate, with a Crossrail station at Canary Wharf to open soon.
This week’s takeover confounded expectations. After a three-month standoff, shareholders in Songbird, which owns the majority of the financial district, sold up at 350p a share, despite repeatedly claiming that the £2.6bn bid undervalued the development. Sir George Iacobescu, Canary Wharf Group Chairman, told The Times yesterday, “They’ve seen the future – and got it for a song.”
It will be fascinating to see how the seemingly-unsinkable Qatari Investment Authority fares on the rocky shores of the Wharf in years to come. Whilst it seems that nothing can stop the onward progress of Canary Wharf, it has a habit of drowning those who seek to control it.
Jack Brown is a PhD candidate at Queen Mary University of London, and Visiting Research Fellow at King’s College, London. He is working on a history of Canary Wharf and Docklands.Reuse content