LONDON's beleaguered five million square foot Canary Wharf project had turned the corner and was expected to be three quarters let by the end of the year, according to Sir Peter Levene, the development's chairman and chief executive officer. Sir Peter was in Hong Kong recently looking for prospective tenants, and to discuss development of the remaining 7.5 million sq ft site, situated in the heart of the London Docklands area. 'A year ago, I never would have said that we would be discussing new construction at Canary Wharf,' said Sir Peter, who has only been at the helm of the project for just over 12 months. Until that time the project was the butt of ridicule among the international investment and real estate community, who said the project would never be a success. Canary Wharf's image as an emerging business and finance centre had been badly tarnished when it was associated with one of the largest real estate company failures ever. The fortunes of the massive project were further hurt with the onset of the recession in Britain, and letting dried up. Canary Wharf was forced into administration in May of 1992 and was only rescued when shareholding banks, including HSBC Holdings, agreed to defer payments until 2007. Sir Peter said it had been 'one hard slog' to convince the public, prospective tenants, and investors that Canary Wharf had a future and that it could put the tough times behind it. But slowly and surely the fortunes of Canary Wharf had turned around, he said. 'Last year we had less than 50 per cent of the space let,' he said of the five million sq ft prime office development. 'Now, with a number of tenancies under negotiation, we will be three quarters let very soon.' Canary Wharf recently had signed up a number of large tenants who took out almost 800,000 sq ft. These lettings included Morgan Stanley and BZW Investment Bank. Another potential tenant was negotiating for 500,000 sq ft, which would make it the largest such deal ever negotiated in London. With some potential tenants requiring very large floor plates, Sir Peter said this would prompt discussion about getting new construction underway. In addition to trading floors, Sir Peter was equally optimistic about restaurants and shops, which he said were finding a renewed sense of vigour at Canary Wharf. 'We used to have 15 shops and now that has increased to 45, and the restaurants are doing very good business,' he said. Canary Wharf also had the largest health club in Europe. Sir Peter said there had been a shift in people's perception about the project. 'People like us now. We have our house in order,' he said. A number of problems which plagued the development since its inception, mainly finance and administration, had been solved. 'The fact we now have 11 international banks as shareholders gives a lot of people a sense of security about Canary Wharf,' he said. Transportation links to and from the City also had been improved thanks to the Limehouse Tunnel, which enabled the trip to be done in a fraction of the time it once took. The Docklands Light Rail system also was running more efficiently, with a commuter train every four minutes, and the Jubilee MTR extension costing GBP1.8 billion (about HK$22 billion) would be ready by the end of 1998. About 12,000 to 13,000 people worked at Canary Wharf, which was developing a reputation as a newly emerging business district and mini Fleet Street, housing three major daily newspapers. By the end of the year as many as 20,000 people would be working in Canary Wharf, said Sir Peter. The present development had space for 26,000 and when the full 12.5 million sq ft was developed, more than 70,000 people were expected to live and work there. Sir Peter said a few Hong Kong developers were interested in building the future residential component of the development. While he didn't think many Hong kong companies would want to rent space at Canary Wharf, he said some mainland companies might be interested -particularly if they wanted to increase trade links with the rest of Europe. Sir Peter said he was not surprised by the turnaround in the fortunes of Canary Wharf, but only by the speed with which it happened.
