What to do with a 45-Story skyscraper and no tenants
Two bronze lions, each sitting atop eight lucky coins, flank the entrance to the HSBC Tower in London’s Canary Wharf, meant to bring prosperity and good luck to the bank and roughly 8,000 workers inside its global headquarters.
But the building’s fortunes are changing — much for the worse — with the bank relocating in 2027 after more than two decades in the Norman Foster-designed tower. Its new home will be a space roughly half the size in the City of London.
Without its tenant, the landlord at Qatar’s sovereign wealth fund may struggle to find an employer needing so much space. But it’s not alone, and many property investors are facing a similar dilemma. In a post-pandemic world, the 45-story tower may become a 200-meter-tall conundrum representing the challenges ahead in cities worldwide as companies downsize for hybrid work.
The outlook for these buildings has gotten so bad that some investors are snapping up these empty carcasses for demolition, betting the land they sit on is now worth more than the structure itself. That newly vacant plot could then be redeveloped for high-rise housing, much needed in developed and emerging cities. New York City recently rolled out a plan to change zoning rules for Midtown Manhattan to allow more offices to be converted to apartments.
The most logical outcome could be a conversion — with the tower turned into accommodation for students or others, rather than torn down.
That might seem to be a convenient solution to three urban problems. First, long-term demand for office space has been decimated by the pandemic, with London estimated to have the equivalent of 60 Gherkins of empty office space last year. Secondly, because the UK’s housing crisis totals some 4.3 million units, according to the Centre for Cities, the average house in England costs more than 10 times the average salary. Lastly, landlords are being urged to reuse or recycle buildings rather than demolish, due to the heavy carbon footprint of the construction industry.
Success stories include Parker Tower, a 1960s concrete office block in London’s Covent Garden, which after thorough renovation and a new façade, has now been converted into homes. Another example is Leon House in Croydon, a 20-story Brutalist office block that was turned into 263 flats.