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The City of London’s political head has said there are no “deal breakers” for the financial district as it seeks to entice big companies to relocate their headquarters from other parts of the capital or overseas.
Chris Hayward, policy chair at the City of London Corporation, said the authority was “hungry for growth” and would adopt a “flexible” approach in negotiations with developers in an effort to attract companies to the Square Mile.
“I have a policy: there is no such thing as deal breakers,” Hayward told the Financial Times in an interview. “We sit down with the investors, the developers with the potential tenants, and we make things work.”
The City’s efforts to attract big companies come as the commercial property market battles the effects of remote and hybrid working.
Office vacancy rates across London were at a 20-year high by the end of 2023, according to real estate data provider CoStar. The rate in the City almost doubled to 12.1 per cent between the first three months of 2020 and the final quarter of 2023.
To try and boost economic activity in the capital, Transport for London is running a trial that scraps peak fares on Fridays.
Hayward said the City was vying not just with London’s Canary Wharf but with “global competition” from financial centres such as New York, Paris, Frankfurt and Dublin.
He added that in addition to HSBC and law firm Clifford Chance, which are moving from Canary Wharf, the Square Mile was seeing greater interest from companies looking to relocate from other parts of London.
“I’m also now getting interest and inquiries from the West End,” he said, including from hedge funds traditionally based in Mayfair.
Hayward said HSBC’s decision to move into the redeveloped former BT headquarters at Panorama St Paul’s had sparked interest from other developers and investors, including from the US and Asia.
He added that the City, where 11 towers have received planning consent or are under construction, would be “flexible” in finding ways for developers to meet planning requirements to ensure their buildings provide public benefit such as public terraces or community facilities.
“When you get a bank like HSBC they want occupation of the entire building. But that’s not a problem because you can say to any developer: ‘Look, there are other ways of finding community facilities. You can partner with neighbours, you can do things for other bits of the City’.”
Hayward’s office said the developer of the HSBC site had proposed contributing £2mn to St Paul’s Cathedral, including funds to illuminate the cathedral and a café that would provide training to people from disadvantaged communities. The ground floor will include a public walkway with art displays and space will be added for pedestrians in the vicinity.
“I always say to my planning officers: remember . . . these [developers] are our clients, these are the people who are investing, taking the risk investing in our city. And we have to make it work for them,” said Hayward.
Aref Lahham, founder and managing director of Orion Capital Managers, the developer of HSBC’s new headquarters, said the corporation had shown its priority was to win business and was “very open . . . to finding solutions”.
“Most important for the City of London is to be able to attract these top companies back into the City. I think they have that as number one, and then they will work with you to make that happen,” he said, adding that his firm was “looking to do more in the City of London”.
Hayward said the HSBC site would be “the biggest and most prestigious retrofit” in the City so far and that repurposing existing buildings rather than demolishing them was now the “starting point” in the corporation’s approach to planning, reducing developments’ environmental impact.
Describing fears that “the era of the office is dead, post-Covid” as “nonsense”, Hayward said that companies were looking for higher quality offices that would help them reduce their carbon footprint.
But he has moved to broaden the City’s appeal by making it more attractive to tourists and improving its nightlife. “It’s not the sleepy old City of London,” he said.
Additional reporting by Joshua Oliver
