Not yet and maybe never “back to normal”: Canary Wharf plans for social distancing at work

June 15, 2020

3 min read

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What's going on here?

Canary Wharf is making changes to its 1.5m sq. metres (m²) of office and retail space to reflect social distancing guidance, in preparation for a gradual return to work of its 125,000 business occupants.

What does this mean?

On 11 May, the UK government unveiled its back to work rules. Guidance was given to employers to get their businesses back up and running and their workplaces operating safely. There were 8 guides each allocated to different types of workplace, such as offices, factories, restaurants, shops and vehicles. Each guide follows identical policies: to work from home where possible, maintain 2m social distancing, reduce face-to-face contact, clean the workplace regularly and keep good hygiene. Implementing these in practice at Canary Wharf has led to creating one-way routes, limiting lift capacities, removing soft furnishings, installing new signage and sanitiser stations, and making doors sensor-operated.

What's the big picture effect?

Canary Wharf is the secondary business district of London and houses the HQs of big banks and financial services companies including HSBC, JPMorgan Chase and Barclays. It also houses the HQ of magic circle law firm Clifford Chance and the London office of New York-based firm Skadden. The pandemic has caused a massive shift in their working practices since only 2.5% of the district’s employees, mostly IT staff, remained there during the crisis. 

With social distancing policies in place, Howard Dawber, MD of strategy at Canary Wharf, predicts that a maximum of 50% of its workforce can return to work. The office tower at One Canada Square, for instance, would be “well within tolerances”, but only when based on the expected lower occupancy levels. Businesses will, therefore, be forced to use a flexible working structure for many employees, and continue to rely heavily on remote working, as long as the guidance remains in place.

A wider issue concerns the future of workspaces and workplaces. While Canary Wharf’s business tenants may be looking at reconfiguring or expanding their workplaces in the short-term, they may use much less of it in the long-term. Sure, as Dawber argues, businesses will always need a central hub. But, as Jes Staley, chief executive of Barclays says, using big, expensive city offices as workplaces may be “a thing of the past”. Even now, businesses looking for new offices are seeking about 75% of the space they were previously, to accommodate more remote working.

Even with restrictions relaxed, the return to physical spaces will be “slow and gradual”, states Knight Frank, a property consultancy. While the district expects 10-20% of its workers to already be returning, it has only seen a small increase in them doing so. A more permanent shift to remote working is likely to depend on whether the rise in video-conferencing remains popular once Covid-19 guidelines are relaxed or ended.

An increased (short-term) or reduced (long-term) need for office space will likely see business tenants negotiate with their landlords over their lease terms. Tenants will want to pay less rent and perhaps occupy less space. In order to retain tenants, landlords are likely to offer softer rent-free incentives and increased flexibility. This flexibility may include terms allowing the tenants to sublet or assign their leases to other businesses. As shown by McDonald’s (to see our article on that, click here). However, it is unlikely that commercial tenants can cancel their leases on the basis of forced workplace closures.

All businesses with physical locations are being forced to change the design of their workplaces in light of this government guidance. The more interesting question is whether the nature of work itself will change by flexible, agile and remote working becoming more prevalent in employment.

Report written by Arun Allen

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