What Canary Wharf did next…
This week I had the privilege of catching up with friends and clients at our annual drinks event in Paris.
It got me thinking about the nature of the modern financial hub and how the status of different cities has evolved in recent years.
One city’s loss is another’s gain
The general sentiment from across the channel that Paris has been the big beneficiary of finance jobs post-Brexit, ahead of Dublin, Frankfurt, Amsterdam, and others. As many of our clients have pointed out, this is due to a number of factors, including:
Size - it’s big enough to hold a big influx of people
Culture - enough said here
Presence of international schools
The Eurostar
The last one is interesting. London is still important - anyone who relocates to the continent needs to be able to regularly travel back to the Big Smoke. From nearly every other city that involves a plane, airport security, and all the hassle that comes with flying (not to mention a large carbon footprint). However, thanks to the Eurostar London<>Paris day trips are incredibly easy.
Reports from the ground are that Paris has definitely gotten a more international feel to it over the past few years. People say it’s, “nothing yet like London, but it’s definitely changed.”
A steady stream
Before the Brexit vote, I think the expectation was that if “Leave” won, there would be an immediate mass exodus of finance talent to Europe.
That obviously didn’t pan out. However, the initial trickle has turned into a steady stream – one that seems to be picking up momentum. Initially it was just a single token coverage person who moved over. Now entire DCM/syndicate/sales teams are operating from Paris, and those jobs aren’t being replaced in London.
What next for London?
Tech jobs now make up a significant proportion of the employment sector in London, while banking jobs have flatlined. 23% of all roles advertised in London in 2021 were in the digital sector, up from 19% in 2019. To put that in perspective, financial services accounts for around 27% of employment in London, a number that hasn’t changed for several years.
You can see it in the makeup of London just walking around the city – tech (and fintech) companies are sprouting up everywhere, and that’s changing the type of talent and the vibe on the street.
Of course, software is just one type of tech, but it’s a bold and smart move to lean into other tech sectors where the UK has a competitive advantage. One such sector is Life Sciences. So I found it interesting (and exciting) to read this week that Canary Wharf is diversifying into this area. Canary Wharf Group (CWG) recently submitted plans for a huge life sciences campus – a 823,000 sq ft, 23-storey tower block that would rank amongst the largest laboratories in Europe and cost £500 million to develop.
CWG (owned by the Qatar Investment Authority and Brookfield Property Partners) is wagering that lab space will have a better run than financial services. That’s a bold and exciting bet.
The benefits of co-location
The benefits of co-location can be debated in some industries such as software (though I’m still a pro-office type of person). But they are indisputable in harder sciences such as biotech.
My mom comes from the biotech industry and my childhood was spent in two of the US’ major biotech clusters – San Francisco/Palo-Alto and Boston/Cambridge. The knowledge agglomeration within Oxford/Cambridge/London is just as powerful as the two American epicentres, and there is an important link between what goes on within university labs and the ability to transfer that into a commercial enterprises.
The limiting reagent is lab space. With lab space in such short supply in the UK, Canary Wharf’s move is astute.
With Brexit rebalancing financial services (and maybe some other professional services) towards the continent, I wouldn’t be surprised to see the industrial fabric of Canary Wharf – and London as a whole – continuing to evolve. Maybe a few more lab coats and a few less suit jackets?