HSBC to move global headquarters from Canary Wharf to City of London to cut costs amid shift to hybrid working

Bank will move to smaller offices in the City of London ahead of its lease expiring in 2027
HSBC move comes as more staff adopt hybrid working, bank seeks to meet its future net zero carbon commitments

Banking & finance

Chad Brayin London

Published: 6:14pm, 26 Jun 2023

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HSBC plans to move out of its long-time headquarters in London’s Canary Wharf and downsize to smaller offices in the City of London as it looks to cut costs as more of its staff embrace hybrid working.

The bank, which is one of Hong Kong’s three currency-issuing lenders, plans to move to the Panorama St Paul’s in the traditional hub of London’s finance industry in the Square Mile before the lease on its Canary Wharf offices expire in 2027.

The London-based bank began a strategic review of its corporate headquarters offices in September, focusing in part on flexible work spaces and its plans to meet future net-zero greenhouse gas commitments through sustainable design.

An HSBC spokesperson confirmed the bank’s plans on Monday after the Times newspaper reported the headquarters shift earlier in the day.

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HSBC’s global headquarters has been located at 8 Canada Square, a 45-storey high-rise in Canary Wharf, since 2002. The Qatar Investment Authority, a sovereign wealth fund, acquired the building for £1.1 billion (US$1.4 billion) in 2014.

Panorama St Paul’s is being developed on the former site of BT Group’s headquarters on Newgate Street and is set to offer 556,000 square feet of office space with views of St Paul’s Cathedral. It is about 4 miles from HSBC’s current offices.

The site, being redeveloped by private equity firm Orion Capital Managers, will feature restaurants, health and wellness facilities, landscaped terraces and roof gardens. Orion is touting its environmental credentials, saying it will save 120,000 trees by retaining and reusing 70 per cent of the building’s existing structure.

Offices at Canary Wharf in London in August 2020. Photo: EPA-EFE

HSBC, which traces its roots to Hong Kong and Shanghai, moved its headquarters to Britain after acquiring Midland Bank in 1992.

However, it has faced pressure from some retail investors in Hong Kong to shift its headquarters back to the city as it found itself caught in the middle of geopolitical tensions between the West and China and after its chief regulator in the UK urged it to suspend its dividend in 2020 to ensure it could support the UK economy during the pandemic.

HSBC decided to keep its home in London in 2016 after conducting a review of its headquarters location.

The decision to downsize HSBC’s offices comes as more businesses in Britain have adopted hybrid and flexible working policies following the coronavirus pandemic and have looked to save costs by reducing their office space.

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HSBC said two years ago that it planned to reduce its office space globally by 40 per cent as more staff worked from home for part of the week.

American banking rival Citigroup is in the process of refurbishing its 42-storey office tower at 25 Canada Square in Canary Wharf and plans to consolidate its staff from two buildings into that tower.

Law firm Clifford Chance plans to leave its Canary Wharf offices when its lease expires in 2028 and downsize to a smaller office space in the City of London.

The shifting office market as more firms adopted flexible working policies has hit the commercial real estate market.

In May, Moody’s Investor Services cut the debt rating for Canary Wharf Group, the property developer owned by the Qatar Investment Authority and Canada’s Brookfield, deeper into junk territory, citing the “difficulty operating and funding environment for real estate companies”.

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